Last updated on March 23rd, 2023 at 07:13 pm
Title 46 – Shipping–Volume 9
CHAPTER IV – FEDERAL MARITIME COMMISSION
SUBCHAPTER A – GENERAL AND ADMINISTRATIVE PROVISIONS
PART 500 [RESERVED]
PART 501 – THE FEDERAL MARITIME COMMISSION – GENERAL
Subpart A – Organization and Functions
§ 501.1 Purpose.
This part describes the organization, functions, and the delegation of authority within, the Federal Maritime Commission (“Commission”).
§ 501.2 General.
(a) Statutory functions. The Commission regulates common carriers by water and other persons involved in the oceanborne foreign commerce of the United States under provisions of title 46, subtitle IV of the United States Code and other applicable statutes.
(b) Establishment and composition of the Commission. The Commission was established as an independent agency by Reorganization Plan No. 7 of 1961, effective August 12, 1961, and is composed of five Commissioners (“Commissioners” or “members”), appointed by the President, by and with the advice and consent of the Senate. Not more than three Commissioners may be appointed from the same political party. The President designates one of the Commissioners to serve as the Chairman of the Commission (“Chairman”).
(c) Terms and vacancies – (1) Length of terms. The term of each member of the Commission is five years and begins when the term of the predecessor of that member ends (i.e., on June 30 of each successive year).
(2) Removal. The President may remove a Commissioner for inefficiency, neglect of duty, or malfeasance in office.
(3) Vacancies. A vacancy in the office of any Commissioner is filled in the same manner as the original appointment. An individual appointed to fill a vacancy is appointed only for the unexpired term of the individual being succeeded.
(4) Term limits – (i) Commissioners initially appointed and confirmed before December 18, 2014. When a Commissioner’s term ends, the Commissioner may continue to serve until a successor is appointed and qualified.
(ii) Commissioners initially appointed and confirmed on or after December 18, 2014. (A) When a Commissioner’s term ends, the Commissioner may continue to serve until a successor is appointed and qualified, limited to a period not to exceed one year.
(B) No individual may serve more than two terms, except that an individual appointed to fill a vacancy may serve two terms in addition to the remainder of the term for which the predecessor of that individual was appointed.
(d) Quorum. A vacancy or vacancies in the Commission shall not impair the power of the Commission to execute its functions. The affirmative vote of a majority of the members of the Commission is required to dispose of any matter before the Commission. For purposes of holding a formal meeting for the transaction of the business of the Commission, the actual presence of two Commissioners shall be sufficient. Proxy votes of absent members shall be permitted.
(e) Meetings; records; rules and regulations. The Commission shall, through its Secretary, keep a true record of all its meetings and the yea-and-nay votes taken therein on every action and order approved or disapproved by the Commission. In addition to or in aid of its functions, the Commission adopts rules and regulations in regard to its powers, duties, and functions under the shipping statutes it administers.
§ 501.3 The Commission’s organizational components and their functions.
(a) Office of the Chairman of the Federal Maritime Commission – (1) General. The Chairman is the chief executive and administrative officer of the Commission. In addition, the Chairman, as “head of the agency,” has certain responsibilities under Federal laws and directives not specifically related to shipping.
(2) Management and supervision. The Chairman provides management direction to the Office of Equal Employment Opportunity, Office of the Secretary, Office of the General Counsel, Office of the Administrative Law Judges, and Office of the Managing Director. Subject to the approval of the Commission, the Chairman appoints the heads of the major organizational units, which include the Office of the Secretary, Office of the General Counsel, Office of the Administrative Law Judges, Office of the Managing Director, Bureau of Trade Analysis, Bureau of Certification and Licensing, Bureau of Enforcement, and Office of Consumer Affairs and Dispute Resolution Services. The Chairman appoints or designates and oversees the Director, Office of Equal Employment Opportunity, who advises and assists the Chairman, the Commissioners, and other principal officers of the Commission in carrying out their responsibilities relative to Titles VI and VII of the Civil Rights Act of 1964 (as amended), other laws, Executive orders, and regulatory guidelines affecting affirmative employment and the processing of equal employment opportunity (EEO) complaints.
(b) Commissioners. The members of the Commission, including the Chairman, implement various shipping statutes and related directives by rendering decisions, issuing orders, and adopting and enforcing rules and regulations governing persons subject to the shipping statutes.
(1) The Office of Inspector General (OIG) reports to and is under the general supervision of the Commissioners. The OIG is an independent and objective oversight office created within the Commission that conducts audits and investigations relating to the programs and operations of the Commission and recommends policies designed to promote economy, efficiency, and effectiveness in the administration of, and to prevent and detect waste, fraud, and abuse in, such programs and operations.
(2) [Reserved]
(c) Office of the Secretary. The Office of the Secretary is responsible for the preparation, maintenance and disposition of the Commission’s official files and records; overseeing the Commission’s website; and managing the Commission’s library and related services. The Office of the Secretary also administers the Commission’s Freedom of Information Act, Privacy Act, and Government in the Sunshine Act responsibilities, with the Secretary serving as the Freedom of Information Act and Privacy Act Officer.
(d) Office of the General Counsel – (1) General. The Office of the General Counsel provides legal services to the Commission and to the Commission staff, and manages the Commission’s international affairs functions.
(2) Designated Agency Ethics Official. The Designated Agency Ethics Official and Alternate are agency employees in the Office of the General Counsel formally designated to coordinate and manage the ethics program and serve as the Commission’s designee(s) to the Office of Government Ethics on such matters.
(e) Office of Administrative Law Judges. The Office of Administrative Law Judges holds hearings and renders initial decisions in adjudicatory proceedings as provided in 46 U.S.C. chapters 401-413 and 441 and other applicable laws, and other matters assigned by the Commission, in accordance with the Administrative Procedure Act and the Commission’s Rules of Practice and Procedure in part 502 of this chapter.
(f) Office of the Managing Director – (1) General duties of the Managing Director – (i) Chief Operating Officer. The Managing Director is responsible to the Chairman for the management and coordination of Commission programs managed by the Director of Enterprise Services; Office of Budget and Finance; Office of Consumer Affairs and Dispute Resolution Services; Office of Human Resources; Office of Information Technology; Office of Management Services; Bureau of Certification and Licensing; Bureau of Trade Analysis; Bureau of Enforcement; and the Commission’s Area Representatives, as more fully described in paragraphs (f)(2) and (3) of this section, and thereby implements the regulatory policies of the Commission and the administrative policies and directives of the Chairman.
(ii) Administrative direction. The Managing Director provides administrative direction to all organizational components, except for the OIG.
(2) General duties. The Office of the Managing Director interprets and administers governmental policies and programs in a manner consistent with Federal guidelines, including those involving financial management, human resources, information technology, and procurement. The Office of the Managing Director is responsible for directing and administering the Commission’s training and development function.
(3) Management and supervision. Other officers and offices under the management direction of the Managing Director are as follows:
(i) Director, Enterprise Services. The Director, Enterprise Services (D/ES) is the Commission’s Chief Financial Officer (CFO) and has responsibility for internal and external communications relating to the budget and financial management. The D/ES works with the Directors, Office of Budget and Finance, Office of Human Resources, Office of Information Technology, and Office of Management Services, to manage the day-to-day administrative operations of the Commission.
(ii) Office of Budget and Finance. The Office of Budget and Finance administers the Commission’s financial management program, including fiscal accounting activities, fee and forfeiture collections, and payments, and ensures that Commission obligations and expenditures of appropriated funds are proper.
(iii) Office of Consumer Affairs and Dispute Resolution Services. The Office of Consumer Affairs and Dispute Resolution Services has responsibility for developing and implementing the Alternative Dispute Resolution Program, responds to consumer inquiries and complaints, and coordinates the Commission’s efforts to resolve disputes within the shipping industry. The Office reviews existing and proposed legislation and regulations for impact on the shipping industry and its consumers and recommends appropriate policies and regulations to facilitate trade.
(iv) Office of Human Resources. The Office of Human Resources plans and administers a complete personnel management program.
(v) Office of Information Technology. The Office of Information Technology administers the Commission’s information technology (“IT”) program under the Paperwork Reduction Act of 1995, as amended, as well as other applicable laws that prescribe responsibility for operating the IT program.
(vi) Office of Management Services. The Office of Management Services administers a variety of management support service functions of the Commission.
(vii) Bureau of Certification and Licensing. The Bureau of Certification and Licensing, through the Office of Transportation Intermediaries, has responsibility for reviewing applications and triennial renewals for Ocean Transportation Intermediary (“OTI”) licenses, and maintaining records about licensees and registrations, managing all activities with respect to evidence of financial responsibility for OTIs, and for developing and maintaining all Bureau databases and records of OTI applicants, licensees, and registrations. In addition, the Bureau of Certification and Licensing has responsibility for reviewing applications and renewals for certificates of financial responsibility with respect to passenger vessels, reviewing requests for substitution of alternative forms of financial protection, managing all activities with respect to evidence of financial responsibility for passenger vessel owner/operators, and for developing and maintaining all Bureau databases and records of passenger vessel owner/operators.
(viii) Bureau of Trade Analysis. The Bureau of Trade Analysis reviews agreements and monitors the concerted activities of ocean common carriers and marine terminal operators, reviews and analyzes service contracts, monitors rates of government-controlled carriers, reviews carrier published tariff systems, responds to inquiries or issues that arise concerning service contracts or tariffs, and is responsible for competition oversight and market analysis.
(ix) Bureau of Enforcement. The Bureau of Enforcement conducts investigations and recommends enforcement action, and provides legal support related to enforcement to other Commission offices. The Bureau of Enforcement also: Participates as trial counsel in formal Commission proceedings when designated by Commission order, or when intervention is granted; negotiates informal compromises of civil penalties subject to the prior approval of the Commission; prepares and presents compromise agreements for Commission approval; and represents the Commission in proceedings and circumstances as designated.
(x) Area Representatives. Area Representatives represent the Commission within their respective geographic area; act as a liaison between the Commission and interested parties such as members of the shipping industry, state and local governments, and members of the public; furnish to interested persons information, advice, and access to Commission public documents; receive and resolve informal complaints, in coordination with the Director, Office of Consumer Affairs and Dispute Resolution Services; investigate potential violations of the shipping statutes and the Commission’s regulations; and provide assistance to the various bureaus and offices of the Commission, as appropriate and when requested.
Subpart B – Delegation and Redelegation of Authorities
(a) Authority and delegation. The provision at 46 U.S.C. 46106 authorizes the Commission to delegate, by published order or rule, any of its functions to a division of the Commission, an individual Commissioner, an administrative law judge, or an employee or employee board, including functions with respect to hearing, determining, ordering, certifying, reporting, or otherwise acting as to any work, business, or matter. The Commission delegates specific authorities to the delegatees designated in §§ 501.12 through 501.17, subject to the limitations prescribed in this section.
(b) Temporary redelegation. When the head of a bureau or office is absent or incapacitated, they may temporarily redelegate their authorities to subordinate personnel under their supervision and direction or to another bureau or office head for the period of their absence or incapacitation.
(c) Redelegation. Other than temporary redelegations under paragraph (b) of this section, and subject to the limitations in this section, the delegatees may redelegate their authorities to subordinate personnel under their supervision and direction only if this subpart is amended to reflect such redelegation and notice thereof is published in the
(d) Exercise of authority; policy and procedure. The delegatees and redelegatees shall exercise the authorities delegated or redelegated in a manner consistent with applicable laws and the established policies of the Commission, and shall consult with the General Counsel where appropriate.
(e) Exercise of delegated authority by delegator. Under any authority delegated or redelegated, the delegator (Commission), or the redelegator, respectively, shall retain full rights to exercise the authority in the first instance.
(f) Review of delegatee’s action. The delegator (Commission) or redelegator of authority shall retain a discretionary right to review an action taken under delegated authority by a subordinate delegatee, either upon the filing of a written petition of a party to, or an intervenor in, such action; or upon the delegator’s or redelegator’s own initiative.
(1) Petition. Petitions for review of actions taken under delegated authority shall be filed within ten (10) calendar days of the action taken:
(i) If the action for which review is sought is taken by a delegatee, the petition shall be addressed to the Commission pursuant to § 502.94 of this chapter.
(ii) If the action for which review is sought is taken by a redelegatee, the petition shall be addressed to the redelegator whose decision can be further reviewed by the Commission under paragraph (f)(1)(i) of this section, unless the Commission decides to review the matter directly, such as, for example, if the redelegator is incapacitated.
(2) Discretionary review. The vote of a majority of the Commission less one member (e.g., two Commissioners if there are a total of four or five sitting Commissioners; one Commissioner if there are a total of three or fewer sitting Commissioners) shall be sufficient to bring any delegated action before the Commission for review under this paragraph (f).
(g) Action – when final. Should the right to exercise discretionary review be declined or should no such review be sought under paragraph (f) of this section, then the action taken under delegated authority shall, for all purposes, including appeal or review thereof, be deemed to be the action of the Commission.
(h) Conflicts. Where the procedures set forth in this section conflict with law or any regulation of this chapter, the conflict shall be resolved in favor of the law or other regulation.
§ 501.12 Delegation to the General Counsel.
(a) Authority to classify carriers within the meaning of 46 U.S.C. 40102(9) except where a carrier submits a rebuttal statement pursuant to § 565.3(b) of this chapter.
(b) Authority to review for legal sufficiency all adverse personnel actions, procurement activities, Freedom of Information Act matters, Privacy Act matters, and requests for testimony by employees and production of official records in litigation and other administrative actions, pursuant to part 503, subpart E, of this chapter.
§ 501.13 Delegation to the Secretary.
(a) Authority to approve applications for permission to practice before the Commission and to issue admission certificates to approved applicants.
(b) Authority to extend the time to file exceptions or replies to exceptions, and the time for Commission review, relative to initial decisions of administrative law judges and decisions of Special Dockets Officers.
(c) Authority to extend the time to file appeals or replies to appeals, and the time for Commission review, relative to dismissals of proceedings, in whole or in part, issued by administrative law judges.
(d) Authority to establish and extend or reduce the time:
(1) To file documents either in docketed proceedings or relative to petitions filed under part 502 of this chapter, which are pending before the Commission itself; and
(2) To issue initial and final decisions under § 502.61 of this chapter.
(e) Authority to prescribe a time limit for the submission of written comments with reference to agreements filed pursuant to 46 U.S.C. chapter 403.
(f) Authority, in appropriate cases, to publish in the
(g) Authority to prescribe a time limit less than ten days from the date published in the
§ 501.14 Delegation to and redelegation by the Managing Director.
(a) Authority to adjudicate, with the concurrence of the General Counsel, and authorize payment of, employee claims for not more than $10,000.00, arising under the Military and Civilian Personnel Property Act of 1964 (31 U.S.C. 3721) and the Federal Tort Claims Act (28 U.S.C. 1346(b), 2671-2680).
(b) Authority to determine that an exigency of the public business is of such importance that annual leave may not be used by employees to avoid forfeiture before annual leave may be restored under 5 U.S.C. 6304.
(c)(1) Authority to classify all positions GS-1 through GS-15 and wage grade positions.
(2) The authority under paragraph (c)(1) of this section is redelegated to the Director, Office of Human Resources.
§ 501.15 Delegation to the Chief Financial Officer.
(a) Authority to approve, certify, or otherwise authorize those actions dealing with appropriations of funds made available to the Commission including allotments, fiscal matters, and contracts relating to the operation of the Commission within the laws, rules, and regulations set forth by the Federal Government.
(b) Authority, in the absence or preoccupation of the Managing Director, to sign travel orders, non-docketed recommendations to the Commission, and other routine documents for the Managing Director, consistent with the programs, policies, and precedents established by the Commission or the Managing Director.
§ 501.16 Delegation to and redelegation by the Director, Bureau of Certification and Licensing.
(a) In relation to OTI licenses:
(1) Authority to approve or disapprove applications for OTI licenses; issue or reissue or transfer such licenses; and approve extensions of time in which to furnish the name(s) and ocean transportation intermediary experience of the managing partner(s) or officer(s) who will replace the qualifying partner or officer upon whose qualifications the original licensing was approved;
(2) Authority to issue a letter stating that the Commission intends to deny an OTI application unless, within 20 days, applicant requests a hearing to show that denial of the application is unwarranted; deny applications where an applicant has received such a letter and has not requested a hearing within the notice period; and rescind, or grant extensions of, the time specified in such letters;
(3) Authority to revoke the license of an OTI upon the request of the licensee;
(4) Authority to, upon receipt of notice of cancellation of any instrument evidencing financial responsibility, notify the licensee in writing that its license will automatically be suspended or revoked, effective on the cancellation date of such instrument, unless new or reinstated evidence of financial responsibility is submitted and approved prior to such date, and subsequently order such suspension or revocation for failure to maintain proof of financial responsibility;
(5) Authority to revoke the ocean transportation intermediary license of a non-vessel-operating common carrier not in the United States for failure to designate and maintain a person in the United States as legal agent for the receipt of judicial and administrative process;
(6) Authority to approve changes in an existing licensee’s organization; and
(7) Authority to return any application which on its face fails to meet the requirements of the Commission’s regulations, accompanied by an explanation of the reasons for rejection.
(8) The authorities contained in paragraphs (a)(3) and (4) of this section are redelegated to the Director, Transportation Intermediaries, in the Bureau of Certification and Licensing.
(b) In relation to Certificates:
(1) Authority to approve applications for Certificates (Performance) and Certificates (Casualty) for passenger vessels, evidenced by a surety bond, guaranty, escrow agreements, or insurance policy, or combination thereof; and issue, reissue, or amend such Certificates;
(2) Authority to issue a written notice to an applicant stating intent to deny an application for a Certificate (Performance) and/or (Casualty), indicating the reason therefor, and advising applicant of the time for requesting a hearing as provided for under § 540.8(c) or § 540.26(c) of this chapter; deny any application where the applicant has not submitted a timely request for a hearing; and rescind such notices and grant extensions of the time within which a request for hearing may be filed;
(3) Authority to issue a written notice to a certificant stating that the Commission intends to revoke, suspend, or modify a Certificate (Performance) and/or (Casualty), indicating the reason therefor, and advising of the time for requesting a hearing as provided for under § 540.8(c) or § 540.26(c) of this chapter; revoke, suspend or modify a Certificate (Performance) and/or (Casualty) where the certificant has not submitted a timely request for hearing; and rescind such notices and grant extensions of time within which a request for hearing may be filed;
(4) Authority to revoke a Certificate (Performance) and/or (Casualty) which has expired, and/or upon request of, or acquiescence by, the certificant; and
(5) Authority to notify a certificant when a Certificate (Performance) and/or (Casualty) has become null and void in accordance with §§ 540.8(a) and 540.26(a) of this chapter.
(c) Authority to approve amendments to escrow agreements filed under § 540.5(b) of this chapter when such amendments are for the purpose of changing names of principals, changing the vessels covered by the escrow agreement, changing the escrow agent, and changing the amount of funds held in escrow, provided that the changes in amount of funds result in an amount of coverage that complies with the requirements in the introductory text of § 540.5 of this chapter.
(d) Authority to grant requests to substitute alternative financial responsibility pursuant to § 540.9(l) of this chapter based upon existing protection available to purchases of passenger vessel transportation by credit card by an amount up to fifty (50) percent of the passenger vessel operator’s highest two-year unearned passenger revenues.
§ 501.17 Delegation to and redelegation by the Director, Bureau of Trade Analysis.
(a) Authority to determine that no action should be taken to prevent an agreement or modification to an agreement from becoming effective under 46 U.S.C. 40304(c), and to shorten the review period under 46 U.S.C. 40304(c)(1) and (e)(1), when the agreement or modification involves solely a restatement, clarification, or change in an agreement which adds no new substantive authority beyond that already contained in an effective agreement. This category of agreement or modification includes, for example, the following: A restatement filed to conform an agreement to the format and organization requirements of part 535 of this chapter; a clarification to reflect a change in the name of a country or port or a change in the name of a party to the agreement; a correction of typographical or grammatical errors in the text of an agreement; a change in the title of persons or committees designated in an agreement; or a transfer of functions from one person or committee to another.
(b) Authority to grant or deny applications filed under § 535.407 of this chapter for waiver of the form, organization, and content requirements of §§ 535.401 through 535.406 of this chapter.
(c) Authority to grant or deny applications filed under § 535.504 of this chapter for waiver of the Information Form requirements in subpart E of part 535 of this chapter.
(d) Authority to grant or deny applications filed under § 535.705 of this chapter for waiver of the reporting requirements in subpart G of part 535 of this chapter.
(e) Authority to determine that no action should be taken to prevent an agreement or modification of an agreement from becoming effective under 46 U.S.C. 40304(c)(1) for all unopposed agreements and modifications to agreements which will not result in a significant reduction in competition. Agreements which are deemed to have the potential to result in a significant reduction in competition and which, therefore, are not covered by the delegation in this paragraph (e) include but are not limited to:
(1) New agreements authorizing the parties to collectively discuss or fix rates (including terminal rates).
(2) New agreements authorizing the parties to pool cargoes or revenues.
(3) New agreements authorizing the parties to establish a joint service or consortium.
(4) New equal access agreements.
(f) Authority to grant or deny shortened review pursuant to § 535.605 of this chapter for agreements for which authority is delegated in paragraph (e) of this section.
(g) Subject to review by the General Counsel, authority to deny, but not approve, requests filed pursuant to § 535.605 of this chapter for a shortened review period for agreements for which authority is not delegated under paragraph (e) of this section.
(h) Authority to issue notices of termination of agreements which are otherwise effective under the Shipping Act of 1984, after publication of notice of intent to terminate in the
(1) Requested by the parties to the agreement;
(2) Deemed to have occurred when it is determined that the parties are no longer engaged in activity under the agreement and official inquiries and correspondence cannot be delivered to the parties; or
(3) Deemed to have occurred by notification of the withdrawal of the next to last party to an agreement without notification of the addition of another party prior to the effective date of the next to last party’s withdrawal.
(i) Authority to determine whether agreements for the use or operation of terminal property or facilities, or the furnishing of terminal services, are within the purview of 46 U.S.C. chapter 403.
(j) Authority to request controlled carriers to file justifications for existing or proposed rates, charges, classifications, rules, or regulations, and to review responses to such requests for the purpose of recommending to the Commission that a rate, charge, classification, rule, or regulation be found unlawful and, therefore, requires Commission action under 46 U.S.C. 40704(b)-(e).
(k) Authority to recommend to the Commission the initiation of formal proceedings or other actions with respect to suspected violations of the shipping statutes and rules and regulations of the Commission.
(l)(1) Authority to approve for good cause or disapprove special permission applications submitted by common carriers, or conferences of such carriers, subject to 46 U.S.C. chapter 405, for relief from statutory and/or Commission tariff requirements.
(2) The authority under this paragraph (l) is redelegated to the Director of Agreements, Service Contracts, and Tariffs, in the Bureau of Trade Analysis.
(m)(1) Authority to approve or disapprove special permission applications submitted by a controlled carrier subject to the provisions of 46 U.S.C. chapter 407 for relief from statutory and/or Commission tariff requirements.
(2) The authority under this paragraph (m) is redelegated to the Director of Agreements, Service Contracts, and Tariffs, in the Bureau of Trade Analysis.
(n)(1) The authority to accept, deny, or deactivate a Form FMC-1 submitted by ocean common carriers, non-vessel-operating common carriers, conferences, and marine terminal operators under parts 520 and 525 of this chapter.
(2) The authority under this paragraph (n) is redelegated to the Director of Agreements, Service Contracts, and Tariffs, in the Bureau of Trade Analysis.
(o) Authority contained in part 530 of this chapter to approve, but not deny, requests for permission to correct clerical or administrative errors in the essential terms of filed service contracts.
(p) Authority to require Monitoring Reports from, or prescribe alternative periodic reporting requirements for, parties to agreements under § 535.702(c) and (d) of this chapter.
(q) Authority to require parties to agreements subject to the Monitoring Report requirements in § 535.702(a)(2) of this chapter to report their agreement commodity data on a sub-trade basis pursuant to § 535.703(d) of this chapter.
PART 502 – RULES OF PRACTICE AND PROCEDURE
Subpart A – General Information
§ 502.1 Scope of rules in this part.
The rules in this part govern procedure before the Federal Maritime Commission, hereinafter referred to as the “Commission,” under the Merchant Marine Act, 1920, Merchant Marine Act, 1936, Shipping Act of 1984, as amended by the Ocean Shipping Reform Act of 1998, Administrative Procedure Act, and related acts, except that subpart R of this part does not apply to proceedings subject to sections 7 and 8 of the Administrative Procedure Act, which are to be governed only by subparts A to Q inclusive, of this part. They shall be construed to secure the just, speedy, and inexpensive determination of every proceeding. To this end, all persons involved in proceedings conducted under the rules of this part shall be required to consider at an early stage of the proceeding whether resort to alternative dispute resolution techniques would be appropriate or useful. [Rule 1.]
§ 502.2 Filing of documents.
(a) Requirement for filing. Documents relating to any matter pending before the Commissioners for decision or to any matter pending before the Commission which is likely to come before the Commissioners for decision, whether or not relating to proceedings governed by this part, must be filed with the Secretary, Federal Maritime Commission. Such documents should not be filed with or separately submitted to the offices of individual Commissioners. Distribution to Commissioners and other agency personnel is handled by the Office of the Secretary to ensure that persons in decision-making and advisory positions receive identical copies of submissions in a uniform and impersonal manner and to avoid the possibility of ex parte communications within the meaning of § 502.11. These considerations apply to informal and oral communications as well, such as requests for expedited consideration.
(b) Date and time of filing. (1) Documents may be hand-delivered at the Commission during normal business hours from 8:30 a.m. to 5 p.m., Monday through Friday.
(2) Except with respect to initial filing of complaints pursuant to §§ 502.62 and 502.63, and claims pursuant to §§ 502.301 and 502.302, the date of filing shall be either the date on which the pleading, document, or paper is physically delivered to the Commission by a party, the date on which a party certifies it to have been deposited in the mail or delivered to a courier, or the date of e-mail transmission.
(c) Place of filing. Except for exhibits filed pursuant to § 502.118(b)(4) and petitions for review of final agency orders served on the Commission pursuant to 28 U.S.C. 2112(a), all documents required to be filed in, and correspondence relating to proceedings governed by this part must be addressed and delivered to “Secretary, Federal Maritime Commission, 800 N. Capitol Street, NW., Washington, DC 20573-0001” or to [email protected].
(d) Service of petition for review of Commission order. Petitions for review of final agency orders served on the Commission pursuant to 28 U.S.C. 2112(a) must be addressed and delivered to “General Counsel, Office of the General Counsel, Federal Maritime Commission, 800 N. Capitol Street, NW., Washington, DC 20573-0001.”
(e) Number of copies. Parties filing documents in proceedings before the Commission or an administrative law judge must file an original, signed document and five (5) copies, and, if possible, a PDF of the document. The PDF document should be sent by e-mail to [email protected] or submitted on an electronic storage device (such as compact disc or USB flash drive).
(f) E-mail transmission of filings. (1) Initial filing of complaints and claims pursuant to §§ 502.62-502.63 and 502.301-502.302 must be accomplished in the traditional manner on paper, rather than by e-mail.
(2) Pursuant to § 502.5 of this subpart, confidential filings must be accomplished in the traditional manner on paper, rather than by e-mail.
(3) If a filing is submitted electronically as a PDF attached to an e-mail, the original, signed document, and five (5) copies must be received by the Secretary within seven working days. The e-mail transmitting the PDF copy of a document must include a certification by the filing party that the electronic copy is a true and correct copy of the paper original, and that the paper signed original and five (5) copies are being filed with the Secretary of the Commission. The e-mail Subject Line must include the docket number of the proceeding and be sent to [email protected].
(g) Filing after announcement of Commission meeting prohibited. No filings relating to matters scheduled for a Commission meeting will be accepted by the Secretary if submitted subsequent to public announcement of the particular meeting, except that the Commission, on its own initiative, or pursuant to a written request, may in its discretion, permit a departure from this limitation for exceptional circumstances. (See § 503.82(e) of this chapter.)
(h) Return of rejected filings. Any pleading, document, writing, or other paper submitted for filing which is rejected because it does not conform to the rules in this part will be returned to the sender.
(i) Continuing obligation to provide contact information. All parties and representatives are under a continuing obligation to provide the Commission and all other parties in a proceeding with accurate and current contact information including a street address, telephone number, and e-mail address.
(j) Form of documents. All papers to be filed under the rules in this part must be clear and legible, dated, show the docket number and title of the proceeding, document title, and include the title, if any, and address of the authorized signer or representative. An original signed in ink must be provided. Text shall appear on only one side of the paper and must be double spaced except that quotations of fifty or more words should be single-spaced and indented on the left and right without quotation marks. The paper must be strong and durable, of letter size (8
(k) Discovery materials excluded from filing requirement. (1) The following discovery requests and responses must not be filed with the Secretary until they are used in the proceeding, or the Commission or presiding officer orders filing:
(i) Notice and transcript of depositions;
(ii) Interrogatories;
(iii) Requests for documents or tangible things or to permit entry onto designated land or other property;
(iv) Requests for admission; and
(v) Expert witness reports.
(2) The party that served the notice of deposition or discovery papers must preserve and ensure the integrity of original transcripts and discovery papers for use by the Commission or the presiding officer. A party that wants to use any part or all of discovery requests and responses in the proceeding must include the part or all of the documents in an appendix to be filed with the motion or other paper that refers to those documents. A party filing an appendix exceeding 100 pages should file an original and two (2) copies on paper and, if possible, also file such appendix by e-mail or on an electronic storage device. [Rule 2.]
§ 502.3 Compliance with rules or orders of Commission.
Persons named in a rule or order shall notify the Commission during business hours on or before the day on which such rule or order becomes effective whether they have complied therewith, and if so, the manner in which compliance has been made. [Rule 3.]
§ 502.4 Authentication of rules or orders of Commission.
All rules or orders issued by the Commission in any proceeding covered by this part shall, unless otherwise specifically provided, be signed by the Secretary of the Commission in the name of the Commission. [Rule 4.]
§ 502.5 Documents containing confidential materials.
Except as otherwise provided in the rules of this part, all filings that contain information for which confidential treatment is sought or information previously designated as confidential pursuant to §§ 502.13, 502.141(j)(1)(vii), 502.208, or any other rules of this part, or for which a request for protective order pursuant to § 502.141(j) is pending, are subject to the following requirements:
(a) Two versions of filings. Two versions of documents must be filed if a document:
(1) Contains information previously designated by the Commission or presiding officer as confidential; or
(2) Contains information for which confidential treatment is sought. Except as specified below, both versions must be filed in accordance with the requirements of § 502.2.
(i) Confidential version. The confidential filing must include a cover page marked “Confidential-Restricted.” The specific confidential information must be conspicuously and clearly marked on each page, for example by highlighting or bracing. If confidentiality will end on a date certain or upon the occurrence of an event, this must be stated on the cover, e.g., “CONFIDENTIAL UNTIL [DATE],” or “CONFIDENTIAL DURING JUDICIAL REVIEW.” The confidential version of a document may be provided to the presiding officer by email but should not be filed with the Office of the Secretary by email.
(ii) Public version. Within three business days of filing a confidential version of a filing, a public version must be filed. The public version must indicate on the cover page and on each affected page “Public Version – confidential materials excluded.” The public version must clearly indicate any information withheld, for example with blackout or braces, and its pagination and depiction of text on each page must be identical to that of the confidential version. For example, the confidential filing may read: “On January 1, 2005, complainant entered into a {25} year lease with respondent for a monthly rent of {$1,000}.” The public version would read: “On January 1, 2005, complainant entered into a { } year lease with respondent for a monthly rent of { }.” Public versions of confidential filings may be filed with the Secretary and presiding officer by email.
(iii) Exhibits. Confidential information in exhibits should be marked as specified above. If marking within the text is not feasible, individual pages may be replaced in the public version with a page indicating that confidential material is excluded. Entire exhibits should not be excluded, only those pages containing confidential material.
(b) Motion for confidential treatment. If confidentiality is sought for a filing containing information not previously designated as confidential by the Commission or presiding officer, the confidential filing must be accompanied by a motion justifying confidential treatment. This motion must identify the specific information in a document for which protection is sought and show good cause by demonstrating that the information is a trade secret or other confidential research, development, or commercial information pursuant to § 502.141(j)(1)(vii). The burden is on the party that wants to protect the information to show good cause for its protection. A motion is not required for information, including personal privacy and financial account numbers, redacted pursuant to § 502.13, Privacy protection for filings made with the Commission.
(c) Use of confidential information. Confidential treatment afforded by this section is subject to the proviso that any information designated as confidential may be used by the administrative law judge or the Commission if deemed necessary to a decision in the proceeding. [Rule 5.]
§ 502.6 Verification of documents.
(a) If a party is represented by an attorney or other person qualified to practice before the Commission under the rules in this part, each pleading, document or other paper of such party filed with the Commission shall be signed by at least one person of record admitted to practice before the Commission in his or her individual name, whose address shall be stated. Except when otherwise specifically provided by rule or statute, such pleading, document or paper need not be verified or accompanied by affidavit. The signature of a person admitted or qualified to practice before the Commission constitutes a certificate by the signer that the signer has read the pleading, document or paper; that the signer is authorized to file it; that to the best of the signer’s knowledge, information, and belief formed after reasonable inquiry, the filing is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. For a willful violation of this section, a person admitted or qualified to practice before the Commission may be subjected to appropriate disciplinary action.
(b) If a party is not represented by a person admitted or qualified to practice before the Commission, each pleading, document or other paper of such party filed with the Commission shall be signed and verified under oath by the party or by a duly authorized officer or agent of the party, whose address and title shall be stated.
(c) Wherever, under any rules of this part, any matter is required or permitted to be supported, evidenced, established, or proved by the sworn declaration, verification, certificate, statement, oath, or affidavit, in writing of the person making the same (other than a deposition under§ 502.143 or § 502.144), such matter may, with like force and effect, be supported, evidenced, established, or proved by the unsworn declaration, certificate, verification, or statement, in writing of such person which is subscribed by such person, as true under penalty of perjury, in substantially the following form:
(1) If executed without the United States: “I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct.”
(2) If executed within the United States, its territories, possessions, or commonwealths: “I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct.” [Rule 6.]
§ 502.7 Documents in foreign languages.
Every document, exhibit, or other paper written in a language other than English and filed with the Commission or offered in evidence in any proceeding before the Commission under this part or in response to any rule or order of the Commission pursuant to this part, shall be filed or offered in the language in which it is written and shall be accompanied by an English translation thereof duly verified under oath to be an accurate translation. [Rule 7.]
§ 502.8 Denial of applications and notice thereof.
Except in affirming a prior denial or where the denial is self-explanatory, prompt written notice will be given of the denial in whole or in part of any written application, petition, or other request made in connection with any proceeding under this part, such notice to be accompanied by a simple statement of procedural or other grounds for the denial, and of any other or further administrative remedies or recourse applicant may have where the denial is based on procedural grounds. [Rule 8.]
§ 502.9 Suspension, amendment, etc., of rules in this part.
The rules in this part may, from time to time, be suspended, amended, or revoked, in whole or in part. Notice of any such action will be published in the
§ 502.10 Waiver of rules in this part.
Except to the extent that such waiver would be inconsistent with any statute, any of the rules in this part, except §§ 502.11 and 502.221, may be waived by the Commission or the presiding officer in any particular case to prevent undue hardship, manifest injustice, or if the expeditious conduct of business so requires. [Rule 10.]
§ 502.11 Ex parte communications.
(a) No person who is a party to or an agent of a party to any proceeding as defined in § 502.61 or who directly participates in any such proceeding and no interested person outside the Commission shall make or knowingly cause to be made to any Commission member, administrative law judge, or Commission employee who is or may reasonably be expected to be involved in the decisional process of any such proceeding, an ex parte communication relevant to the merits of the proceeding;
(b) No Commission member, administrative law judge, or Commission employee who is or may reasonably be expected to be involved in the decisional process of any agency proceeding, shall make or knowingly cause to be made to any interested persons outside the Commission or to any party to the proceeding or its agent or to any direct participant in a proceeding, an ex parte communication relevant to the merits of the proceeding. This prohibition shall not be construed to prevent any action authorized by paragraphs (e), (f) and (g) of this section;
(c) “Ex parte communication” means an oral or written communication not on the public record with respect to which reasonable prior notice to all parties is not given, but it shall not include requests for status reports or communications regarding purely procedural matters or matters which the Commission or member thereof, administrative law judge, or Commission employee is authorized by law or these rules to dispose of on an ex parte basis;
(d) Any Commission member, administrative law judge, or Commission employee who is or may reasonably be expected to be involved in the decisional process of any proceeding who receives, or who makes or knowingly causes to be made, an ex parte communication shall promptly transmit to the Secretary of the Commission:
(1) All such written communications;
(2) Memoranda stating the substance of all such oral communications; and
(3) All written responses and memoranda stating the substance of all oral responses to the materials described in paragraphs (d)(1) and (d)(2) of this section;
(e) The Secretary shall place the materials described in paragraph (d) of this section in the correspondence part of the public docket of the proceeding and may take such other action as may be appropriate under the circumstances;
(f) Upon receipt of an ex parte communication knowingly made or knowingly caused to be made by a party to a proceeding, the Commission or the presiding officer may, to the extent consistent with the interests of justice and the policy of the statutes administered by the Commission, require the party to show cause why his or her claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of the making of such communication;
(g) An ex parte communication shall not constitute a part of the record for decision. The Commission or the presiding officer may, to the extent consistent with the interests of justice and the policy of the statutes administered by the Commission, consider a violation of paragraph (b) of this section sufficient grounds for a decision adverse to a party who has knowingly caused such violation to occur and may take such other action as may be appropriate under the circumstances. [Rule 11.]
§ 502.12 Applicability of Federal Rules of Civil Procedure.
In proceedings under this part, for situations which are not covered by a specific Commission rule, the Federal Rules of Civil Procedure will be followed to the extent that they are consistent with sound administrative practice. [Rule 12.]
§ 502.13 Privacy protection for filings made with the Commission.
(a) Redacted filings. Unless the Commission or presiding officer orders otherwise, in an electronic or paper filing that contains an individual’s social-security number, taxpayer-identification number, or birth date, the name of an individual known to be a minor, or a financial-account number, a party or nonparty making the filing may include only:
(1) The last four digits of the social-security number and taxpayer-identification number;
(2) The year of the individual’s birth;
(3) The minor’s initials; and
(4) The last four digits of the financial-account number.
(b) Exemptions from the redaction requirement. The redaction requirement does not apply to the following:
(1) The record of an administrative or agency proceeding;
(2) The record of a state-court proceeding;
(3) The record of a court or tribunal, if that record was not subject to the redaction requirement when originally filed; and
(4) A filing covered by paragraph (c) of this section.
(c) Filings made under seal. The Commission or presiding officer may order that a filing be made under seal without redaction. The Commission or presiding officer may later unseal the filing or order the person who made the filing to file a redacted version for the public record.
(d) Protective orders. For good cause, the Commission or presiding officer may by order in a case:
(1) Require redaction of additional information; or
(2) Limit or prohibit a nonparty’s remote electronic access to a document filed with the Commission.
(e) Option for additional unredacted filing under seal. A person making a redacted filing may also file an unredacted copy under seal. The Commission must retain the unredacted copy as part of the record.
(f) Option for filing a reference list. A filing that contains redacted information may be filed together with a reference list that identifies each item of redacted information and specifies an appropriate identifier that uniquely corresponds to each item listed. The list must be filed under seal and may be amended as of right. Any reference in the case to a listed identifier will be construed to refer to the corresponding item of information.
(g) Waiver of protection of identifiers. A person waives the protection of this rule as to the person’s own information by filing it without redaction and not under seal. [Rule 13.]
§ 502.14 Public hearings.
The Commission may call informal public hearings, not required by statute, to be conducted under the rules in this part where applicable, for the purpose of rulemaking or to obtain information necessary or helpful in the determination of its policies or the carrying out of its duties, and may require the attendance of witnesses and the production of evidence to the extent permitted by law. [Rule 141.]
Subpart B – Appearance and Practice Before the Commission
§ 502.21 Appearance.
(a) Parties. A party may appear in person or by an officer, partner, or regular employee of the party, or by or with counsel or other duly qualified representative, in any proceeding under the rules in this part. Any party or his or her representative may testify, produce and examine witnesses, and be heard upon brief and at oral argument if oral argument is granted.
(b) Non-parties. One who appears in person before the Commission or a representative thereof, either by compulsion from, or request or permission of the Commission, shall be accorded the right to be accompanied, represented, and advised by counsel.
(c) Special appearance. An appearance may be either general, that is, without reservation, or it may be special, that is, confined to a particular issue or question. A person who desires to appear specially must expressly so state when entering the appearance, and, at that time, shall also state the questions or issues to which the appearance is confined; otherwise the appearance will be considered general. [Rule 21.]
§ 502.22 Authority for representation.
Any individual acting in a representative capacity in any proceeding before the Commission may be required to show his or her authority to act in such capacity. [Rule 22.]
§ 502.23 Notice of appearance; substitution and withdrawal of representative.
(a) Upon filing of a complaint instituting proceedings or filing of an answer to an order or complaint, the party filing shall notify the Commission of the name(s), address(es), telephone number(s), and email address(es) of the person or persons who will represent the party in the pending proceeding. Each person who appears in a representative capacity in a proceeding must deliver a written notice of appearance to the Secretary stating for whom the appearance is made. Such notice must indicate whether the representative wishes to be notified of notices, orders and decisions by either email or facsimile transmission. All appearances shall be noted in the record. Motions for leave to intervene must indicate the name(s), address(es), telephone number(s), and email address(es) of the person or persons who will represent the intervenor in the pending proceeding if the motion is granted.
(b) A Notice of Appearance should follow the form set forth in Exhibit No. 1 to this subpart.
(c) An attorney must represent in the Notice of Appearance that he is admitted to practice and in good standing. A non-attorney must describe his or her authority to act in such capacity.
(d) If an attorney or other representative of record is superseded, there shall be filed a stipulation of substitution signed both by the attorney(s) or representative(s) and by the party, or a written notice from the party to the Commission with a Notice of Appearance included. Substitution of counsel or representative will not, by itself, be considered good cause for delaying a proceeding.
(e) If an attorney wishes to withdraw from representing a party, and written consent is not obtained, or if the party is not otherwise represented, the withdrawing attorney shall file an appropriate motion seeking permission to withdraw and provide appropriate reasons for making the motion. Such motion will be decided in consideration of the factors and standards set forth in Rule 1.16 of the American Bar Association’s Model Rules of Professional Conduct and by the courts. [Rule 23.]
§ 502.24 Practice before the Commission defined.
(a) Practice before the Commission shall be deemed to comprehend all matters connected with the presentation of any matter to the Commission, including the preparation and filing of necessary documents, and correspondence with and communications to the Commission, on one’s own behalf or representing another. (See § 502.32).
(b) The term “Commission” as used in this subpart includes any bureau, division, office, branch, section, or unit of the Federal Maritime Commission and any officer or employee of such bureau, division, office, branch, section, or unit. [Rule 24.]
§ 502.25 Presiding officer.
(a) Definition. Presiding officer includes, where applicable, one or more members of the Commission or an administrative law judge.
(b) Functions and powers. The officer designated to hear a case shall have the following powers:
(1) Notices of hearing, subpoenas, depositions, pleadings and scope of proceedings. To arrange and give notice of hearing; sign and issue subpoenas authorized by law; take or cause depositions to be taken; rule upon proposed amendments or supplements to pleadings; and, delineate the scope of a proceeding instituted by order of the Commission by amending, modifying, clarifying, or interpreting said order.
(2) Alternative means of dispute resolution and conferences for settlement or simplification of issues. To inform the parties as to the availability of one or more alternative means of dispute resolution, encourage use of such methods, and require consideration of their use at an early state of the proceeding; hold conferences for the settlement or simplification of the issues by consent of the parties or by the use of alternative means of dispute resolution; transmit the request of parties for the appointment of a mediator or settlement judge, as provided by § 502.91; and require the attendance at any such conference pursuant to 5 U.S.C 556(c)(8), of at least one representative of each party who has authority to negotiate concerning resolution of issues in controversy.
(3) Hearings, evidence, procedural requests, motions, oaths and affirmations, and witnesses. To regulate the course of a hearing; prescribe the order in which evidence shall be presented; dispose of procedural requests or similar matters; hear and rule upon motions; administer oaths and affirmations; examine witnesses; direct witnesses to testify or produce evidence available to them; rule upon offers of proof and receive relevant, material, reliable, and probative evidence; act upon motions to intervene; permit submission of facts, arguments, offers of settlement, and proposals of adjustment; and, if the parties so request, issue formal opinions providing tentative evaluations of the evidence submitted; hear oral argument at the close of the testimony.
(4) Time management and other matters. To fix the time for filing briefs, motions, and other documents to be filed in connection with hearings and the administrative law judge’s decision thereon, except as otherwise provided by the rules in this part; act upon petitions for enlargement of time to file such documents, including answers to formal complaints; and dispose of any other matter that normally and properly arises in the course of proceedings.
(5) Exclusion of persons from a hearing. To exclude any person from a hearing for disrespectful, disorderly, or inappropriate language or conduct.
(c) Functions and powers pursuant to Reorganization Plan No. 7 of 1961. All of the functions delegated in subparts A to Q and subpart T of this part, inclusive, to the Chief Judge, presiding officer, or administrative law judge include the functions with respect to hearing, determining, ordering, certifying, reporting, or otherwise acting as to any work, business, or matter, pursuant to the provisions of section 105 of Reorganization Plan No. 7 of 1961. [Rule 147.]
(d) Designation of administrative law judge. An administrative law judge will be designated by the Chief Administrative Law Judge to preside at hearings required by statute, in rotation so far as practicable, unless the Commission or one or more members thereof shall preside, and will also preside at hearings not required by statute when designated to do so by the Commission.
(e) Attachment of functions. In proceedings handled by the Office of Administrative Law Judges, its functions shall attach:
(1) Upon the service by the Commission of a Notice of Filing of Complaint and Assignment of complaint filed pursuant to § 502.62, or § 502.182, or upon referral under subpart T of this part; or
(2) Upon reference by the Commission of a petition for a declaratory order pursuant to § 502.68; or
(3) Upon forwarding for assignment by the Office of the Secretary of a special docket application pursuant to § 502.271; or
(4) Upon the initiation of a proceeding and ordering of hearing before an administrative law judge pursuant to § 502.63.
(f) Unavailability. If the presiding officer assigned to a proceeding becomes unavailable, the Commission, or Chief Judge (if such presiding officer was an administrative law judge), shall designate a qualified officer to take his or her place. Any motion predicated upon the substitution of a new presiding officer for one originally designated shall be made within ten (10) days after notice of such substitution.
(g) Disqualification of presiding or participating officer. Any presiding or participating officer may at any time withdraw if he or she deems himself or herself disqualified, in which case there will be designated another presiding officer. If a party to a proceeding, or its representative, files a timely and sufficient affidavit of personal bias or disqualification of a presiding or participating officer, the Commission will determine the matter as a part of the record and decision in the case. [Rule 25.]
§ 502.26 Attorneys at law.
Attorneys at law who are admitted to practice before the Federal courts or before the courts of any State or Territory of the United States may practice before the Commission. An attorney practicing before the Commission is expected to conform to the standards of conduct set forth in the American Bar Association’s Model Rules of Professional Conduct in addition to the specific requirements of this chapter. [Rule 26.]
§ 502.27 Persons not attorneys at law.
(a)(1) Any person who is not an attorney at law may be admitted to practice before the Commission if he or she is a citizen of the United States and files proof to the satisfaction of the Commission that he or she possesses the necessary legal, technical, or other qualifications to render valuable service before the Commission and is otherwise competent to advise and assist in the presentation of matters before the Commission. Applications by persons not attorneys at law for admission to practice before the Commission shall be made on the forms prescribed therefor, which may be obtained from the Secretary of the Commission, and shall be addressed to the Federal Maritime Commission, Washington, DC, 20573, and shall be accompanied by a fee as required by § 503.50(d) of this chapter.
(2) The application for admission to practice before the Commission by persons not attorneys at law can be downloaded from the Commission’s Web site, www.fmc.gov, or acquired from the Secretary of the Commission and must be accompanied by a fee as required by § 503.43(e) of this chapter. The application should be sent to the Federal Maritime Commission, Washington, DC 20573.
(3) All applicants must complete the following certification:
I. __________________________ (Name) ________________________, certify under penalty of perjury under the laws of the United States, that I have not been convicted, after September 1, 1989, of any Federal or State offense involving the distribution or possession of a controlled substance, or that if I have been so convicted, I am not ineligible to receive Federal benefits, either by court order or operation of law, pursuant to 21 U.S.C. 862.
(b) The Commission, in its discretion, may call upon the applicant for a full statement of the nature and extent of his or her qualifications. If the Commission is not satisfied as to the sufficiency of the applicant’s qualifications, it will so notify him or her by registered mail, whereupon he or she shall be granted a hearing upon request for the purpose of showing his or her qualifications. If the applicant presents to the Commission no request for such hearing within twenty (20) days after receiving the notification above referred to, his or her application shall be acted upon without further notice.
(c) The Commission may deny admission to, suspend, or prohibit any person from practice before the Commission who it finds does not possess the requisite qualifications to represent others or is lacking in character, integrity, or proper professional conduct. Non-attorneys who have been admitted to practice before the Commission may be excluded from such practice only after being afforded an opportunity to be heard.
(d) A non-attorney may not practice before the Commission unless and until an application has been approved.
(e) Paragraph (d) of this section shall not apply, however, to any person who appears before the Commission on his or her own behalf or on behalf of any corporation, partnership, or association of which he or she is a partner, officer, or regular employee. [Rule 27.]
§§ 502.29-502.30 [Reserved]
§ 502.31 Statement of interest.
The Commission may call upon any practitioner for a full statement of the nature and extent of his or her interest in the subject matter presented by him or her before the Commission. [Rule 31.]
§ 502.32 Former employees.
Title V of the Ethics in Government Act proscribes certain activities by certain former Federal employees (18 U.S.C. 207). In summary, as applied to former Commission employees, the restrictions and basic procedures are as follows:
(a) Restrictions. (1) No former Commission employee may represent in any formal or informal appearance or make any oral or written communication with intent to influence a U.S. Government agency in a particular matter involving a specific party or parties in which the employee participated personally and substantially while with the Commission.
(2) No former Commission employee may, within two years of terminating Commission employment, act as a representative in the manner described in paragraph (a)(1) of this section, as to a particular matter which was actually pending under the employee’s official responsibility within one year prior to termination of the employment.
(3) Former senior Commission employees (defined as Commissioners and members of the Senior Executive Service as designated by the Office of Government Ethics under 18 U.S.C. 207(d)(1)) may not, for two years after terminating Commission employment, assist in representing a person by personal presence at an appearance before the Government on a matter in which the former employee had participated personally and substantially while at the Commission.
(4) Former senior Commission employees, as defined in paragraph (a)(3) of this section, are barred for one year from representing parties before the Commission or communicating with intent to influence the Commission, regardless of prior involvement in the particular proceeding.
(b) Prior consent for appearance. (1) Prior to making any appearance, representation or communication described in paragraph (a) of this section, and, in addition to other requirements of this subpart, every former employee must apply for and obtain prior written consent of the Commission for each proceeding or matter in which such appearance, representation, or communication is contemplated. Such consent will be given only if the Commission determines that the appearance, representation or communication is not prohibited by the Act, this section or other provisions of this chapter.
(2) To facilitate the Commission’s determination that the intended activity is not prohibited, applications for written consent shall:
(i) Be directed to the Commission, state the former connection of the applicant with the Commission and date of termination of employment, and identify the matter in which the applicant desires to appear; and
(ii) Be accompanied by an affidavit to the effect that the matter for which consent is requested is not a matter in which the applicant participated personally and substantially while at the Commission and, as made applicable by paragraph (a) of this section, that the particular matter as to which consent is requested was not pending under the applicant’s official responsibility within one year prior to termination of employment and that the matter was not one in which the former employee had participated personally and substantially while at the Commission. The statements contained in the affidavit shall not be sufficient if disproved by an examination of the files and records of the case.
(3) The applicant shall be promptly advised as to his or her privilege to appear, represent or communicate in the particular matter, and the application, affidavit and consent, or refusal to consent, shall be filed by the Commission in its records relative thereto.
(c) Reporting possible violations. Possible violations of section 207 of Title 18 of the United States Code, 18 U.S.C. 207, by the Commission’s former officers and employees are required to be reported to the Attorney General and the Office of Government Ethics, pursuant to the regulations of the Office of Government Ethics at 5 CFR 2641.103(a) and 5 CFR 2638.603.
(d) Partners or associates. (1) In any case in which a former member, officer, or employee of the Commission is prohibited under this section from practicing, appearing, or representing anyone before the Commission in a particular Commission matter, any partner or legal or business associate of such former member, officer, or employee shall be prohibited from (i) utilizing the services of the disqualified former member, officer, or employee in connection with the matter, (ii) discussing the matter in any manner with the disqualified former member, officer, or employee, and (iii) sharing directly or indirectly with the disqualified former member, officer, or employee in any fees or revenues received for services rendered in connection with such matter.
(2) The Commission may require any practitioner or applicant to become a practitioner to file an affidavit to the effect that the practitioner or applicant will not: (i) Utilize the service of, (ii) discuss the particular matter with, or (iii) share directly or indirectly any fees or revenues received for services provided in the particular matter, with a partner, fellow employee, or legal or business associate who is a former member, officer or employee of the Commission and who is either permanently or temporarily precluded from practicing, appearing or representing anyone before the Commission in connection with the particular matter; and that the applicant’s employment is not prohibited by any law of the United States or by the regulations of the Commission. [Rule 32.]
Exhibit No. 1 to Subpart B [§§ 502.23, 502.26, 502.27] of Part 502 – Notice of Appearance
Docket No. __________________________:
Please enter my appearance in this proceeding as counsel for ________________________.
Indicate authority for representation [choose one of the following]:
____ I am an attorney admitted to practice and in good standing before the courts of the State of ______________________.
____ I am admitted to practice before the Commission pursuant to 46 CFR 502.27.
____ I am an officer, director, or regular employee of the party.
I request to be informed of service of notices, orders and decisions in this proceeding by [choose one of the following]:
Subpart C – Parties
§ 502.41 Parties; how designated.
The term “party,” whenever used in this part, includes any natural person, corporation, association, firm, partnership, trustee, receiver, agency, public or private organization, government agency, or unit thereof representing said agency. A party who files a complaint under § 502.62 shall be designated as “complainant.” A party against whom relief or other affirmative action is sought in a proceeding commenced under § 502.62 or § 502.73 or a party named in an order of investigation issued by the Commission shall be designated as “respondent,” except that in investigations instituted under section 11(c) of the Shipping Act of 1984, 46 U.S.C. 41302(a)-(b), 41307(b), the parties to the agreement shall be designated as “proponents” and the parties protesting the agreement shall be designated as “protestants.” A person who has been permitted to intervene under § 502.68 shall be designated as “intervenor.” All parties and persons designated in this section shall be parties to the proceeding. No person other than a party or its representative may introduce evidence or examine witnesses at hearings. [Rule 41].
§ 502.42 Bureau of Enforcement.
The Bureau of Enforcement shall be a party to proceedings upon designation by the Commission or upon leave to intervene granted pursuant to § 502.68. The Bureau’s representative shall be served with copies of all papers, pleadings, and documents in every proceeding in which the Bureau is a party. The Bureau shall actively participate in any proceeding to which it is a party, to the extent required in the public interest, subject to the separation of functions required by section 5(c) of the Administrative Procedure Act. [Rule 42]
§ 502.43 Substitution of parties.
The Commission or presiding officer may order an appropriate substitution of parties in the event of a party’s death, incompetence, transfer of its interest, or other appropriate circumstance. [Rule 43]
Subpart D – Rulemaking
§ 502.51 Initiation of procedure to issue, amend, or repeal a rule.
(a) By petition. Any interested party may file with the Commission a petition for the issuance, amendment, or repeal of a rule designed to implement, interpret, or prescribe law, policy, organization, procedure, or practice requirements of the Commission. The petition shall set forth the interest of petitioner and the nature of the relief desired, shall include any facts, views, arguments, and data deemed relevant by petitioner, and shall be verified. If such petition is for the amendment or repeal of a rule, it shall be accompanied by proof of service on all persons, if any, specifically named in such rule, and shall conform in other aspects to subpart H of this part. Replies to such petition shall conform to the requirements of § 502.69.
(b) By the Commission. The Commission on its own initiative may initiate the issuance, amendment, or repeal of a rule through notice of proposed rulemaking or advanced notice of proposed rulemaking. [Rule 51.]
§ 502.52 Notice of proposed rulemaking.
(a) General notice of proposed rulemaking, including the information specified in § 502.61(c), shall be published in the
(b) Except where notice or hearing is required by statute, paragraph (a) of this section shall not apply to interpretative rules, general statements of policy, rules of agency organization, procedure, or practice of the Commission, or when the Commission for good cause finds (and incorporates the findings and a brief statement of reasons therefor in the rules issued) that notice and public procedure are impracticable, unnecessary, or contrary to the public interest. [Rule 52]
§ 502.53 Participation in rulemaking.
(a) Interested persons will be afforded an opportunity to participate in rulemaking through submission of written data, views, or arguments, with or without opportunity for oral presentation. No replies to the written submissions will be allowed unless, because of the nature of the proceeding, the Commission indicates that replies would be necessary or desirable for the formulation of a just and reasonable rule, except that, where the proposed rules are such as are required by statute to be made on the record after opportunity for a hearing, such hearing shall be conducted pursuant to 5 U.S.C. 556 and 557, and the procedure shall be the same as stated in subpart L of this part. In the event that replies or succeeding rounds of comments are permitted, copies shall be served on all prior participants in the proceeding. A list of participants may be obtained from the Secretary of the Commission.
(b) In those rulemaking proceedings in which respondents are named, interested persons who wish to participate shall file a petition to intervene in accordance with the provisions of § 502.72 [Rule 53.]
(c) Where a formal hearing is held in a rulemaking proceeding, interested persons will be afforded an opportunity to participate through submission of relevant, material, reliable, and probative written evidence properly verified, except that such evidence submitted by persons not present at the hearing will not be made a part of the record if objected to by any party on the ground that the person who submits the evidence is not present for cross-examination.
§ 502.54 Contents of rules.
The Commission will incorporate in any publication of proposed or final rules a concise and general statement of their basis and purpose. [Rule 54.]
§ 502.55 Effective date of rules.
The publication or service of any substantive rule shall be made not less than thirty (30) days prior to its effective date except:
(a) As otherwise provided by the Commission for good cause found that notice and public procedure thereon are impractical, unnecessary, or contrary to the public interest;
(b) In the case of rules granting or recognizing exemption or relieving restriction; interpretative rules; or statements of policy.
(c) Interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice. [Rule 55.]
§ 502.56 Negotiated rulemaking.
The Commission, either upon petition of interested persons or upon its own motion, may establish a negotiated rulemaking committee to negotiate and develop consensus on a proposed rule, if, upon consideration of the criteria of 5 U.S.C. 563, use of such a committee is determined by the Commission to be in the public interest. [Rule 56.]
§ 502.57 Service by parties of pleadings and other documents.
Service on all prior commenters must be shown when submitting comments or replies beyond the initial round on a notice of proposed rulemaking. A list of all participants may be obtained from the Secretary of the Commission.
Subpart E – Private Complaints and Commission Investigations
§ 502.61 Proceedings.
(a) Any person may commence a proceeding by filing a complaint (Rule 62) for a formal adjudication or by filing a claim for the informal adjudication of small claims (subpart S). A person may also file a petition for a rulemaking (Rule 51), for an exemption (Rule 74), for a declaratory order (Rule 75), or for other appropriate relief (Rule 76), which becomes a proceeding when the Commission assigns a formal docket number to the petition.
(b) The Commission may commence a proceeding for a rulemaking, for an adjudication (including Commission enforcement action under § 502.63), or a non-adjudicatory investigation upon petition or on its own initiative by issuing an appropriate order.
(c) Persons entitled to notice of hearings, except those notified by complaint service under § 502.113, will be duly and timely informed of the nature of the proceeding, the legal authority and jurisdiction under which the proceeding is conducted, and the terms, substance, and issues involved, or the matters of fact and law asserted, as the case may be. Such notice will be published in the
(d) In the order instituting a proceeding or in the notice of filing of complaint and assignment, the Commission must establish dates by which the initial decision and the final Commission decision will be issued. These dates may be extended by order of the Commission for good cause shown. [Rule 61.]
§ 502.62 Private party complaints for formal adjudication.
(a) Filing a complaint for formal adjudication. (1) A person may file a sworn complaint alleging violation of the Shipping Act of 1984, 46 U.S.C. 40101 et seq.
(2) Form. Complaints should be drafted in accordance with the rules in this section.
(3) Content of complaint. The complaint must be verified and must contain the following:
(i) The name, street address, and email address of each complainant, and the name, address, and email address of each complainant’s attorney or representative, the name, address, and, if known, email address of each person against whom complaint is made;
(ii) A recitation of the legal authority and jurisdiction for institution of the proceeding, with specific designation of the statutory provisions alleged to have been violated;
(iii) A clear and concise factual statement sufficient to inform each respondent with reasonable definiteness of the acts or practices alleged to be in violation of the law, and a statement showing that the complainant is entitled to relief;
(iv) A request for the relief and other affirmative action sought; and
(v) Shipping Act violation must be alleged. If the complaint fails to indicate the sections of the Act alleged to have been violated or clearly to state facts which support the allegations, the Commission may, on its own initiative, require the complaint to be amended to supply such further particulars as it deems necessary.
(4) Complaints seeking reparation; statute of limitations. A complaint may seek reparation (money damages) for injury caused by violation of the Shipping Act of 1984. (See subpart O of this part.)
(i) Where reparation is sought, the complaint must set forth the injury caused by the alleged violation and the amount of alleged damages.
(ii) Except under unusual circumstances and for good cause shown, reparation will not be awarded upon a complaint in which it is not specifically requested, nor upon a new complaint by or for the same complainant which is based upon a finding in the original proceeding.
(iii) A complaint seeking reparation must be filed within three years after the claim accrues. Notification to the Commission that a complaint may or will be filed for the recovery of reparation will not constitute a filing within the applicable statutory period.
(iv) Civil penalties must not be requested and will not be awarded in complaint proceedings.
(5) Oral hearing. The complaint should designate whether an oral hearing is requested and the desired place for any oral hearing. The presiding officer will determine whether an oral hearing is necessary.
(6) Filing fee. The complaint must be accompanied by remittance of a $288 filing fee.
(7) A complaint is deemed filed on the date it is received by the Commission.
(b) Answer to a complaint. (1) Time for filing. A respondent must file with the Commission an answer to the complaint and must serve the answer on complainant as provided in subpart H of this part within 25 days after the date of service of the complaint by the Commission or the Complainant unless this period has been extended under § 502.67 or § 502.102, or reduced under § 502.103, or unless motion is filed to withdraw or dismiss the complaint, in which latter case, answer must be filed within 10 days after service of an order denying such motion. For good cause shown, the presiding officer may extend the time for filing an answer.
(2) Contents of answer. The answer must be verified and must contain the following:
(i) The name, address, and email address of each respondent, and the name, address, and email address of each respondent’s attorney or representative;
(ii) Admission or denial of each alleged violation of the Shipping Act;
(iii) A clear and concise statement of each ground of defense and specific admission, denial, or explanation of facts alleged in the complaint, or, if respondent is without knowledge or information thereof, a statement to that effect; and
(iv) Any affirmative defenses, including allegations of any additional facts on which the affirmative defenses are based.
(3) Oral hearing. The answer should designate whether an oral hearing is requested and the desired place for such hearing. The presiding officer will determine whether an oral hearing is necessary.
(4) Counterclaims, crossclaims, and third-party complaints. In addition to filing an answer to a complaint, a respondent may include in the answer a counterclaim against the complainant, a crossclaim against another respondent, or a third-party complaint. A counterclaim, a crossclaim, or a third-party complaint must allege and be limited to violations of the Shipping Act within the jurisdiction of the Commission. The service and filing of a counterclaim, a crossclaim, or a third-party complaint and answers or replies thereto are governed by the rules and requirements of this section for the filing of complaints and answers.
(5) A reply to an answer may not be filed unless ordered by the presiding officer.
(6) Effect of failure to file answer. (i) Failure of a party to file an answer to a complaint, counterclaim, crossclaim, or third-party complaint within the time provided will be deemed to constitute a waiver of that party’s right to appear and contest the allegations of the complaint, counterclaim, crossclaim, or third-party complaint to which it has not filed an answer and to authorize the presiding officer to enter an initial decision on default as provide for in 46 CFR 502.65. Well pleaded factual allegations in the complaint not answered or addressed will be deemed to be admitted.
(ii) A party may make a motion for initial decision on default. [Rule 62.]
§ 502.63 Commission enforcement action.
(a) The Commission may issue an Order of Investigation and Hearing commencing an adjudicatory investigation against one or more respondents alleging one or more violations of the statutes that it administers.
(b) Contents of Order of Investigation and Hearing. The Order of Investigation and Hearing must contain the following:
(1) The name, street address, and, if known, email address of each person against whom violations are alleged;
(2) A recitation of the legal authority and jurisdiction for institution of the proceeding, with specific designation of the statutory provisions alleged to have been violated;
(3) A clear and concise factual statement sufficient to inform each respondent with reasonable definiteness of the acts and practices alleged to be in violation of the law;
(4) Notice of penalties, cease and desist order, or other affirmative action sought; and
(5) Notice of the requirement to file an answer and a statement of the consequences of failure to file an answer.
(c) Answer to Order of Investigation and Hearing. (1) Time for filing. A respondent must file with the Commission an answer to the Order of Investigation and Hearing and serve a copy of the answer on the Bureau of Enforcement within 25 days after being served with the Order of Investigation and Hearing unless this period has been extended under § 502.67 or § 502.102, or reduced under § 502.103, or unless motion is filed to withdraw or dismiss the Order of Investigation and Hearing, in which latter case, answer must be filed within 10 days after service of an order denying such motion. For good cause shown, the presiding officer may extend the time for filing an answer.
(2) Contents of answer. The answer must be verified and must contain the following:
(i) The name, address, and email address of each respondent, and the name, address, and email address of each respondent’s attorney or representative;
(ii) Admission or denial of each alleged violation of the Shipping Act;
(iii) A clear and concise statement of each ground of defense and specific admission, denial, or explanation of facts alleged in the complaint, or, if respondent is without knowledge or information thereof, a statement to that effect; and
(iv) Any affirmative defenses, including allegations of any additional facts on which the affirmative defenses are based.
(3) Oral hearing. The answer must indicate whether an oral hearing is requested and the desired place for such hearing. The presiding officer will determine whether an oral hearing is necessary.
(4) Effect of failure to file answer. (i) Failure of a respondent to file an answer to an Order of Investigation and Hearing within the time provided will be deemed to constitute a waiver of the respondent’s right to appear and contest the allegations in the Order of Investigation and Hearing and to authorize the presiding officer to enter a decision on default as provided for in 46 CFR 502.65. Well pleaded factual allegations in the Order of Investigation and Hearing not answered or addressed will be deemed to be admitted.
(ii) The Bureau of Enforcement may make a motion for decision on default.
(d) Pre-enforcement process. (1) Prior to recommending formal enforcement action under this section or informal compromise procedures under § 502.604, the Bureau of Enforcement will advise the person or persons who are the subject of an investigation that:
(i) The Bureau of Enforcement has made a preliminary determination to recommend that the Commission initiate enforcement action against them;
(ii) Identifies the specific violations that the Bureau of Enforcement has preliminarily determined to include in the recommendation; and
(iii) Provides notice that the person may make a written submission to the Bureau of Enforcement concerning the proposed recommendation, including the deadline for the submission and any other relevant information (e.g., how and where to send such statements).
(2) Persons notified of such investigations may submit a written statement to the Bureau of Enforcement setting forth their interests and positions regarding the subject matter of the investigation.
(3) The Bureau of Enforcement will consider any written statements submitted under paragraph (d)(2) of this section when making recommendations to the Commission and will attach such written statements to the Bureau’s recommendations. [Rule 63.]
§ 502.64 Alternative dispute resolution.
(a) Mandatory preliminary conference. (1) Participation. Subsequent to service of a Complaint, parties must participate in a preliminary conference with the Commission’s Office of Consumer Affairs and Dispute Resolution Services (CADRS) as to whether the matter may be resolved through mediation. The preliminary conference may be conducted either in person or via telephone, video conference, or other forum.
(2) Timing. Within fifteen (15) days of the filing of an answer, the parties must contact the Director of CADRS to schedule the preliminary conference. The Director of CADRS or his/her designees will conduct the preliminary conference and may confer with each party separately at any time.
(b) Continued availability of dispute resolution services to resolve procedural and other disputes. Pursuant to subpart U of this part, the parties mutually may agree, at any time prior to the termination of a Commission proceeding, to initiate or reopen a mediation proceeding to explore resolution of procedural or substantive issues.
(c) Proceeding not stayed during dispute resolution process. Unless otherwise ordered by the presiding officer, a mediation proceeding does not stay or delay the procedural time requirements set forth by rule or order of the presiding officer.
(d) Confidentiality. The preliminary conference will be confidential. [Rule 64.]
§ 502.65 Decision on default.
(a) A party to a proceeding may be deemed to be in default if that party fails:
(1) To appear, in person or through a representative, at a hearing or conference of which that party has been notified;
(2) To answer, to respond to a dispositive motion within the time provided, or otherwise to defend the proceeding; or
(3) To cure a deficient filing within the time specified by the Commission or the presiding officer.
(b) When a party is found to be in default, the Commission or the presiding officer may issue a decision on default upon consideration of the record, including the complaint or Order of Investigation and Hearing.
(c) The presiding officer may require additional information or clarification when needed to issue a decision on default, including a determination of the amount of reparations or civil penalties where applicable.
(d) A respondent who has defaulted may file with the Commission a petition to set aside a decision on default. Such a petition must be made within 22 days of the service date of the decision, state in detail the reasons for failure to appear or defend, and specify the nature of the proposed defense. In order to prevent injustice, the Commission may for good cause shown set aside a decision on default. [Rule 65.]
§ 502.66 Amendments or supplements to pleadings.
(a) Amendments or supplements to any pleading (complaint, Order of Investigation and Hearing, counterclaim, crossclaim, third-party complaint, and answers thereto) will be permitted or rejected, either in the discretion of the Commission or presiding officer. No amendment will be allowed that would broaden the issues, without opportunity to reply to such amended pleading and to prepare for the broadened issues. The presiding officer may direct a party to state its case more fully and in more detail by way of amendment.
(b) A response to an amended pleading must be filed and served in conformity with the requirements of subpart H and § 502.69 of this part, unless the Commission or the presiding officer directs otherwise. Amendments or supplements allowed prior to hearing will be served in the same manner as the original pleading, except that the presiding officer may authorize the service of amended complaints directly by the parties rather than by the Secretary of the Commission.
(c) Whenever by the rules in this part a pleading is required to be verified, the amendment or supplement must also be verified. [Rule 66.]
§ 502.67 Motion for more definite statement.
If a pleading (including a complaint, counterclaim, crossclaim, or third-party complaint filed pursuant to § 502.62) to which a responsive pleading is permitted is so vague or ambiguous that a party cannot reasonably prepare a response, the party may move for a more definite statement before filing a responsive pleading. The motion must be filed within 15 days of the pleading and must point out the defects complained of and the details desired. If the motion is granted and the order of the presiding officer is not obeyed within 10 days after service of the order or within such time as the presiding officer sets, the presiding officer may strike the pleading to which the motion was directed or issue any other appropriate order. If the motion is denied, the time for responding to the pleading must be extended to a date 10 days after service of the notice of denial. [Rule 67.]
§ 502.68 Motion for leave to intervene.
(a) Filing. A motion for leave to intervene may be filed in any proceeding.
(b) Procedure for intervention. (1) Upon request, the Commission will furnish a service list to any member of the public pursuant to part 503 of this chapter.
(2) The motion must:
(i) Comply with all applicable provisions of subpart A of this part;
(ii) Indicate the type of intervention sought;
(iii) Describe the interest and position of the person seeking intervention, and address the grounds for intervention set forth in paragraph (c) of this section;
(iv) Describe the nature and extent of its proposed participation, including the use of discovery, presentation of evidence, and examination of witnesses;
(v) State the basis for affirmative relief, if affirmative relief is sought; and
(vi) Be served on existing parties by the person seeking intervention pursuant to subpart H of this part.
(3) A response to a motion to intervene must be served and filed within 15 days after the date of service of the motion.
(c)(1) Intervention of right. The presiding officer or Commission must permit anyone to intervene who claims an interest relating to the property or transaction that is subject of the proceeding, and is so situated that disposition of the proceeding may as a practical matter impair or impede the ability of such person to protect its interest, unless existing parties adequately represent that interest.
(2) Permissive intervention. (i) In general. The presiding officer or Commission may permit anyone to intervene who shows that a common issue of law or fact exists between such person’s interest and the subject matter of the proceeding; that intervention would not unduly delay or broaden the scope of the proceeding, prejudice the adjudication of the rights, or be duplicative of the positions of any existing party; and that such person’s participation may reasonably be expected to assist in the development of a sound record.
(ii) By a government department, agency, or the Commission’s Bureau of Enforcement. The presiding officer or Commission may permit intervention by a Federal or State government department or agency or the Commission’s Bureau of Enforcement upon a showing that its expertise is relevant to one or more issues involved in the proceeding and may assist in the consideration of those issues.
(3) The timeliness of the motion will also be considered in determining whether a motion will be granted under paragraph (b)(2) of this section and should be filed no later than 30 days after publication in the
(d) Use of discovery by an intervenor. (1) Absent good cause shown, an intervenor desiring to utilize the discovery procedures provided in subpart L must commence doing so no more than 15 days after its motion for leave to intervene has been granted.
(2) The Commission or presiding officer may impose reasonable limitations on an intervenor’s participation in order to:
(i) Restrict irrelevant or duplicative discovery, evidence, or argument;
(ii) Have common interests represented by a spokesperson; and
(iii) Retain authority to determine priorities and control the course of the proceeding.
(3) The use of discovery procedures by an intervenor whose motion was filed more than 30 days after publication in the
§ 502.69 Motions.
(a) In any adjudication, an application or request for an order or ruling not otherwise specifically provided for in this part must be by motion. After the assignment of a presiding officer to a proceeding and before the issuance of his or her recommended or initial decision, all motions must be addressed to and ruled upon by the presiding officer unless the subject matter of the motion is beyond his or her authority, in which event the matter must be referred to the Commission. If the proceeding is not before the presiding officer, motions must be designated as petitions and must be addressed to and ruled upon by the Commission.
(b) Motions must be in writing, except that a motion made at a hearing may be sufficient if stated orally upon the record.
(c) Oral argument upon a written motion may be permitted at the discretion of the presiding officer or the Commission.
(d) A repetitious motion will not be entertained.
(e) All written motions must state clearly and concisely the purpose of and the relief sought by the motion, the statutory or principal authority relied upon, and the facts claimed to constitute the grounds supporting the relief requested; and must conform with the requirements of subpart H of this part.
(f) Any party may file and serve a response to any written motion, pleading, petition, application, etc., permitted under this part except as otherwise provided respecting answers (§ 502.62), briefs (§ 502.214), exceptions (§ 502.227), and reply to petitions for attorney fees under the Equal Access to Justice Act (§ 502.503(b)(1)).
(g) Dispositive and non-dispositive motions defined. For the purpose of these rules, dispositive motion means a motion for decision on the pleadings; motion for summary decision or partial summary decision; motion to dismiss all or part of a proceeding or party to a proceeding; motion for involuntary dismissal; motion for initial decision on default; or any other motion for a final determination of all or part of a proceeding. All other motions, including all motions related to discovery, are non-dispositive motions. [Rule 69.]
§ 502.70 Procedure for dispositive motions.
(a) A dispositive motion as defined in § 502.69(g) of this subpart must include a concise statement of the legal basis of the motion with citation to legal authority and a statement of material facts with exhibits as appropriate.
(b) A response to a dispositive motion must be served and filed within 15 days after the date of service of the motion. The response must include a concise statement of the legal basis of the response with citation to legal authority and specific responses to any statements of material facts with exhibits as appropriate.
(c) A reply to the response to a dispositive motion may be filed within 7 days after the date of service of the response to the motion. A reply may not raise new grounds for relief or present matters that do not relate to the response and must not reargue points made in the opening motion.
(d) The non-moving party may not file any further reply unless requested by the Commission or presiding officer, or upon a showing of extraordinary circumstances.
(e) Page limits. Neither the motion nor the response may exceed 30 pages, excluding exhibits or appendices, without leave of the presiding officer. A reply may not exceed 15 pages. [Rule 70.]
§ 502.71 Procedure for non-dispositive motions.
(a) Duty to confer. Before filing a non-dispositive motion as defined in § 502.69(g) of this subpart, the parties must attempt to discuss the anticipated motion with each other in a good faith effort to determine whether there is any opposition to the relief sought and, if there is opposition, to narrow the areas of disagreement. The moving party must state within the body of the motion what attempt was made or that the discussion occurred and whether the motion is opposed.
(b) Response to a non-dispositive motion. A response to a non-dispositive motion must be served and filed within 7 days after the date of service of the motion.
(c) Response replies. The moving party may not file a reply to a response to a non-dispositive motion unless requested by the Commission or presiding officer, or upon a showing of extraordinary circumstances.
(d) Page limits. Neither the motion nor the response may exceed 10 pages, excluding exhibits or appendices, without leave of the presiding officer. [Rule 71.]
§ 502.72 Dismissals.
(a) Voluntary dismissal. (1) By the complainant. When no settlement agreement is involved, the complainant may dismiss an action without an order from the presiding officer by filing a notice of dismissal before the opposing party serves either an answer, a motion to dismiss, or a motion for summary decision. Unless the notice or stipulation states otherwise, the dismissal is without prejudice.
(2) By stipulation of the parties. The parties may dismiss an action at any point without an order from the presiding officer by filing a stipulation of dismissal signed by all parties who have appeared. In the stipulation the parties must certify that no settlement on the merits was reached. Unless the stipulation states otherwise, the dismissal is without prejudice.
(3) By order of the presiding officer. Except as provided in paragraphs (a)(1) and (a)(2) of this section, an action may be dismissed at the complainant’s request only by order of the presiding officer, on terms the presiding officer considers proper. If the motion is based on a settlement by the parties, the settlement agreement must be submitted with the motion for determination as to whether the settlement appears to violate any law or policy and to ensure the settlement is free of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable. Unless the order states otherwise, a dismissal under this paragraph is without prejudice.
(b) Involuntary dismissal; effect. If the complainant fails to prosecute or to comply with these rules or an order in the proceeding, a respondent may move to dismiss the action or any claim against it, or the presiding officer, after notice to the parties, may dismiss the proceeding on its own motion. Unless the dismissal order states otherwise, a dismissal under this subpart, except one for lack of jurisdiction or failure to join a party, operates as an adjudication on the merits.
(c) Dismissing a counterclaim, crossclaim, or third-party claim. This rule applies to dismissals of any counterclaim, crossclaim, or third-party claim.
§ 502.73 Brief of an amicus curiae.
(a) A brief of an amicus curiae may be filed only by leave of the Commission or the presiding officer granted on motion with notice to the parties, or at the request of the Commission or the presiding officer, except that leave must not be required when the brief is presented by the United States or any agency or officer of the United States. The brief may be conditionally filed with the motion for leave. A brief of an amicus curiae must be limited to questions of law or policy.
(b) A motion for leave to file an amicus brief must identify the interest of the applicant and must state the reasons why such a brief is desirable.
(c) Except as otherwise permitted by the Commission or the presiding officer, an amicus curiae must file its brief no later than 7 days after the initial brief of the party it supports is received at the Commission. An amicus curiae that is not supporting either party must file its brief no later than 7 days after the initial brief of the first party filing a brief is received at the Commission. The Commission or the presiding officer must grant leave for a later filing only for cause shown, in which event the period within which an opposing party may answer must be specified.
(d) A motion of an amicus curiae to participate in oral argument will be granted only in accordance with the requirements of § 502.241. [Rule 78.]
§ 502.74 Consolidation of proceedings.
The Commission or the Chief Administrative Law Judge (or designee) may order two or more proceedings which involve substantially the same issues consolidated and heard together.
§ 502.75 Opportunity for informal settlement.
(a) Parties are encouraged to make use of all the procedures of this part that are designed to simplify or avoid formal litigation, and to assist the parties in reaching settlements whenever it appears that a particular procedure would be helpful.
(b) Where time, the nature of the proceeding, and the public interest permit, all interested parties will have the opportunity for the submission and consideration of facts, argument, offers of settlement, or proposal of adjustment, without prejudice to the rights of the parties.
(c) No settlement offer, or proposal will be admissible in evidence over the objection of any party in any hearing on the matter.
(d) As soon as practicable after the commencement of any proceeding, the presiding officer will direct the parties or their representatives to consider the use of alternative dispute resolution, including but not limited to mediation, and may direct the parties or their representatives to consult with the Federal Maritime Commission Alternative Dispute Resolution Specialist about the feasibility of alternative dispute resolution.
(e) Any party may request that a mediator or other neutral be appointed to assist the parties in reaching a settlement. If such a request or suggestion is made and is not opposed, the presiding officer will appoint a mediator or other neutral who is acceptable to all parties, coordinating with the Federal Maritime Commission Alternative Dispute Resolution Specialist. The mediator or other neutral will convene and conduct one or more mediation or other sessions with the parties and will inform the presiding officer, within the time prescribed by the presiding officer, whether the dispute resolution proceeding resulted in a resolution or not, and may make recommendations as to future proceedings. If settlement is reached, it will be submitted to the presiding officer who will issue an appropriate decision or ruling. All such dispute resolution proceedings are subject to the provisions of subpart U of this part.
(f) Any party may request that a settlement judge be appointed to assist the parties in reaching a settlement. If such a request or suggestion is made and is not opposed, the presiding officer will advise the Chief Administrative Law Judge who may appoint a settlement judge who is acceptable to all parties. The settlement judge will convene and preside over conferences and settlement negotiations and will report to the presiding officer within the time prescribed by the Chief Administrative Law Judge, on the results of settlement discussions with appropriate recommendations as to future proceedings. If settlement is reached, it must be submitted to the presiding officer who will issue an appropriate decision or ruling. [Rule 75.]
Subpart F – Petitions, Exemptions, and Orders to Show Cause
§ 502.91 Order to show cause.
The Commission may institute a proceeding by order to show cause. The order will be served upon all persons named therein, will include the information specified in § 502.221, will require the person named therein to answer, and may require such person to appear at a specified time and place and present evidence upon the matters specified. [Rule 91.]
§ 502.92 Exemption procedures – general.
(a) Authority. The Commission, upon application or on its own motion, may by order or regulation exempt for the future any class of agreements between persons subject to the Shipping Act of 1984 or any specified activity of those persons from any requirement of the Act if the Commission finds that the exemption will not result in substantial reduction in competition or be detrimental to commerce. The Commission may attach conditions to any exemption and may, by order, revoke any exemption.
(b) Application for exemption. Any person may petition the Commission for an exemption or revocation of an exemption of any class of agreements or an individual agreement or any specified activity pursuant to section 16 of the Shipping Act of 1984 (46 U.S.C. 40103). A petition for exemption must state the particular requirement of the Shipping Act of 1984 for which exemption is sought. The petition must also include a statement of the reasons why an exemption should be granted or revoked, must provide information relevant to any finding required by the Act and must comply with § 502.76. Where a petition for exemption of an individual agreement is made, the application must include a copy of the agreement. Unless a petition specifically requests an exemption by regulation, the Commission must evaluate the petition as a request for an exemption by order.
(c) Participation by interested persons. No order or regulation of exemption or revocation of exemption may be issued unless opportunity for hearing has been afforded interested persons and departments and agencies of the United States.
(d)
(1) A short title for the proposed exemption or the title of the existing exemption;
(2) The identity of the party proposing the exemption or seeking revocation;
(3) A concise summary of the agreement or class of agreements or specified activity for which exemption is sought, or the exemption which is to be revoked;
(4) A statement that the petition and any accompanying information are available for inspection in the Commission’s offices in Washington, DC; and
(5) The final date for filing comments regarding the proposal. [Rule 74.]
§ 502.93 Declaratory orders and fee.
(a)(1) The Commission may, in its discretion, issue a declaratory order to terminate a controversy or to remove uncertainty.
(2) Petitions for the issuance thereof must: state clearly and concisely the controversy or uncertainty; name the persons and cite the statutory authority involved; include a complete statement of the facts and grounds prompting the petition, together with full disclosure of petitioner’s interest; be served upon all parties named therein; and conform to the requirements of subpart H of this part.
(3) Petitions must be accompanied by remittance of a $306 filing fee.
(b) Petitions under this section must be limited to matters involving conduct or activity regulated by the Commission under statutes administered by the Commission. The procedures of this section must be invoked solely for the purpose of obtaining declaratory rulings which will allow persons to act without peril upon their own view. Controversies involving an allegation of violation by another person of statutes administered by the Commission, for which coercive rulings such as payment of reparation or cease and desist orders are sought, are not proper subjects of petitions under this section. Such matters must be adjudicated either by filing of a complaint under section 11 of the Shipping Act of 1984 (46 U.S.C. 41301-41302, 41305-41307(a)) and § 502.62, or by filing of a petition for investigation under § 502.76.
(c) Petitions under this section must be accompanied by the complete factual and legal presentation of petitioner as to the desired resolution of the controversy or uncertainty, or a detailed explanation why such can only be developed through discovery or evidentiary hearing.
(d) Responses to the petition must contain the complete factual and legal presentation of the responding party as to the desired resolution, or a detailed explanation why such can only be developed through discovery or evidentiary hearing. Responses must conform to the requirements of § 502.69 and must be served pursuant to subpart H of this part.
(e) No additional submissions will be permitted unless ordered or requested by the Commission or the presiding officer. If discovery or evidentiary hearing on the petition is deemed necessary by the parties, such must be requested in the petition or responses. Requests must state in detail the facts to be developed, their relevance to the issues, and why discovery or hearing procedures are necessary to develop such facts.
(f)(1) A notice of filing of any petition which meets the requirements of this section must be published in the
(2) In the case of petitions involving a matter limited to specifically named persons, participation by persons not named therein will be permitted only upon grant of intervention by the Commission pursuant to § 502.68.
(3) Petitions for leave to intervene must be submitted on or before the response date and must be accompanied by intervenor’s complete response including its factual and legal presentation in the matter.
(g) Petitions for declaratory order which conform to the requirements of this section will be referred to a formal docket. Referral to a formal docket is not to be construed as the exercise by the Commission of its discretion to issue an order on the merits of the petition. [Rule 75.]
§ 502.94 Petitions – general and fee.
(a) Except when submitted in connection with a formal proceeding, all claims for relief or other affirmative action by the Commission, including appeals from Commission staff action, except as otherwise provided in this part, must be by written petition, which must state clearly and concisely the petitioner’s grounds of interest in the subject matter, the facts relied upon and the relief sought, must cite by appropriate reference the statutory provisions or other authority relied upon for relief, must be served upon all parties named therein, and must conform otherwise to the requirements of subpart H of this part. Responses thereto must conform to the requirements of § 502.67.
(b) Petitions must be accompanied by remittance of a $306 filing fee. [Rule 94.]
§ 502.95 Proceedings involving assessment agreements.
(a) In complaint proceedings involving assessment agreements filed under section 5(e) of the Shipping Act of 1984 (46 U.S.C. 40301(e), 40305), the Notice of Filing of Complaint and Assignment will specify a date before which the initial decision will be issued, which date will not be more than eight months from the date the complaint was filed.
(b) Any party to a proceeding conducted under this section who desires to utilize the prehearing discovery procedures provided by subpart L of this part must commence doing so at the time it files its initial pleading, i.e., complaint, answer, or petition for leave to intervene. Discovery matters accompanying complaints must be filed with the Secretary of the Commission for service pursuant to § 502.113. Answers or objections to discovery requests must be subject to the normal provisions set forth in subpart L.
(c) Exceptions to the decision of the presiding officer, filed pursuant to § 502.227, must be filed and served no later than 15 days after date of service of the initial decision. Replies thereto must be filed and served no later than 15 days after date of service of exceptions. In the absence of exceptions, the decision of the presiding officer must be final within 30 days from the date of service, unless within that period, a determination to review is made in accordance with the procedures outlined in § 502.227. [Rule 77.]
Subpart G – Time
§ 502.101 Computation.
In computing any time period prescribed or allowed under the rules in this part, the period begins on the day following the act, event, or default that triggers the period and includes the last day of the time period. If the last day is a Saturday, Sunday, or Federal holiday, the time period continues to the next day that is not a Saturday, Sunday, or federal holiday. If the presiding officer prescribes or allows an act, event, or default by reference to a specific date, that date shall govern. If the Commission’s offices are inaccessible on the last day for a filing, the time for filing is extended to the first accessible day that is not a Saturday, Sunday, or Federal holiday. [Rule101]
§ 502.102 Enlargement or reduction of time to file documents.
(a) Motions for enlargement or reduction of time for the filing of any pleading or other document, or in connection with the procedures of subpart L of this part, may be granted upon a showing of good cause. Motions must set forth the reasons for the request and be received at least seven (7) days before the scheduled filing date. Motions filed less than seven (7) days before the scheduled filing date may be considered where reasonable grounds are found for the failure to meet this requirement.
(b) Motions submitted after the scheduled filing date will be considered a request to accept late filing and must be accompanied by the document. These motions will only be considered when exceptional circumstances are shown or as justice may require.
(c) Motions and responses to motions filed under this section are subject to the requirements of §§ 502.69 and 502.71, except that responses to motions must be served and filed within five (5) days after the date of service of the motion. [Rule 102.]
§ 502.103 [Reserved]
§ 502.104 Postponement of hearing.
(a) Motions for postponement of any hearing date may be granted upon a showing of good cause. Motions must set forth the reasons for the request and be received at least seven (7) days before the scheduled hearing date. Motions filed less than seven (7) days before the scheduled hearing date may be considered where reasonable grounds are found for the failure to meet this requirement.
(b) Motions and responses filed under this section are subject to the requirements of §§ 502.69 and 502.71, except that responses to motions must be served and filed within five (5) days after the date or service of the motion. [Rule 104.]
§ 502.105 Waiver of rules governing enlargement of time and postponement of hearings.
Except as otherwise provided by law the presiding officer, for good cause, may reduce or enlarge any time limit prescribed in the rules of this Part, may waive the requirements of §§ 502.102 and 502.104 for replies, and may rule ex parte on requests submitted under those rules. [Rule 105.]
Subpart H – Service of Documents
§§ 502.111-502.112 [Reserved]
§ 502.113 Service of private party complaints.
(a) Complaints filed pursuant to § 502.62, amendments to complaints (unless otherwise authorized by the presiding officer pursuant to § 502.66(b)), small claims complaints filed pursuant to § 502.304, and Complainant’s memoranda filed in shortened procedure cases pursuant to § 502.182, will be served by the Secretary of the Commission.
(b) The Secretary will serve the complaint using first class mail or express mail service at the Respondent’s address provided by the Complainant. If the complaint cannot be delivered, for example if the complaint is returned as undeliverable or not accepted for delivery, the Secretary will notify the Complainant.
(c) Alternative service by Complainant. The Complainant may serve the Complaint at any time after it has been filed with the Commission. If Complainant serves the complaint, an affidavit setting forth the method, time and place of service must be filed with the Secretary within five days following service.
(d) The presiding officer may dismiss a complaint that has not been served within thirty (30) days after the complaint was filed. [Rule 113.]
§ 502.114 Serving documents in Commission proceedings.
(a) Except where a different method of service is specifically required by the rules in this Part, all pleadings, documents and papers of every kind (except requests for subpoenas under § 502.131, documents served by the Commission under § 502.113, and documents submitted at a hearing or prehearing conference) in proceedings before the Commission, when delivered to the Commission or the presiding officer for filing, must show that service has been made upon all parties to the proceeding and upon any other persons required to be served by the rules in this Part. Such service must be made by delivering one copy to each party; by email; in-person hand delivery; or United States mail service, and be properly addressed with postage prepaid; by courier; or by facsimile. Service should be made in the same manner in which any pleading or document is filed with the Commission. For example, if a pleading is filed by email pursuant to § 502.2(f)(3), service should also be made by email.
(b) When a party has appeared by attorney or other representative, service upon each attorney or other representative of record will be deemed service upon the party, except that, if two or more attorneys of record are partners or associates of the same firm, only one of them need be served.
§ 502.115 Service in rulemaking and petition proceedings.
Service on all prior participants in a rulemaking or a petition proceeding must be shown when submitting comments or replies beyond the initial round, including those involving disposition of petitions for rulemaking (Rule 51), petitions for declaratory order (Rule 75), petitions general (Rule 76), notices of proposed rulemaking (Rule 52), proceedings under section 19 of the Merchant Marine Act, 1920, (46 U.S.C. 42101) (Part 550), and proceedings under section 13(b)(6) of the Shipping Act of 1984 (46 U. S.C. 41108(d)) (Part 560). A list of all participants may be obtained from the Secretary of the Commission.
§ 502.116 Date of service.
The date of service of documents served by the Commission will be the date shown in the service stamp placed on the first page of the document. The date of service of documents served by parties will be the date when the document served is transmitted by email, deposited in the United States mail, delivered to a courier, or delivered in person. If service is made by more than one method, for example email and also U.S. mail service, the date of service will be the earlier of the two dates. In computing the time from such dates, the provisions of § 502.101 shall apply. [Rule 116.]
§ 502.117 Certificate of service.
The original of every document filed with the Commission and required to be served upon all parties to a proceeding shall be accompanied by a certificate of service signed by the party making service, stating that such service has been made upon each party to the proceeding. Certificates of service may be in substantially the following form:
I hereby certify that I have this day served the foregoing document upon [all parties of record or name of person(s)] by [mailing, delivering to courier or delivering in person] a copy to each such person.
Dated at, ______ this ______ day of ______ 19 – .
Subpart I – Subpoenas
§ 502.131 Requests; issuance.
Subpoenas for the attendance of witnesses or the production of evidence shall be issued upon request of any party, without notice to any other party. Requests for subpoenas must be submitted in writing to the Office of Administrative Law Judges. The party requesting the subpoena shall tender an original and one copy of such subpoena. Where it appears that the subpoena sought may be unreasonable, oppressive, excessive in scope, or unduly burdensome, the administrative law judge may in his or her discretion, as a condition precedent to the issuance of the subpoena, require the person seeking the subpoena to show the general relevance and reasonable scope of the testimony or other evidence sought. [Rule 131.]
§ 502.132 Motions to quash or modify.
(a) Except when issued at a hearing, or in connection with the taking of a deposition, within ten (10) days after service of a subpoena for attendance of a witness or a subpoena for production of evidence, but in any event at or before the time specified in the subpoena for compliance therewith, the person to whom the subpoena is directed may, by motion with notice to the party requesting the subpoena, petition the presiding officer to quash or modify the subpoena.
(b) If served at the hearing, the person to whom the subpoena is directed may, by oral application at the hearing, within a reasonable time fixed by the presiding officer, petition the presiding officer to revoke or modify the subpoena.
(c) If served in connection with the taking of a deposition pursuant to § 502.143 unless otherwise agreed to by all parties or otherwise ordered by the presiding officer, the party who has requested the subpoena shall arrange that it be served at least twenty (20) days prior to the date specified in the subpoena for compliance therewith, the person to whom the subpoena is directed may move to quash or modify the subpoena within ten (10) days after service of the subpoena, and a reply to such motion shall be served within seven (7) days thereafter. [Rule 132.]
§ 502.133 Attendance and mileage fees.
Witnesses summoned by subpoena to a hearing or deposition are entitled to the same fees and mileage that are paid to witnesses in courts of the United States. Fees and mileage shall be paid, upon request, by the party at whose instance the witness appears. [Rule 133.]
§ 502.134 Service of subpoenas.
If service of a subpoena is made by a United States marshal, or his or her deputy, or an employee of the Commission, such service shall be evidenced by his or her return thereon. If made by any other person, such person shall make affidavit thereto, describing the manner in which service is made, and return such affidavit on or with the original subpoena. In case of failure to make service, the reasons for the failure shall be stated on the original subpoena. In making service, the original subpoena shall be exhibited to the person served, shall be read to him or her if he or she is unable to read, and a copy thereof shall be left with him or her. The original subpoena, bearing or accompanied by required return, affidavit, or statement, shall be returned without delay to the Commission, or if so directed on the subpoena, to the presiding officer before whom the person named in the subpoena is required to appear. [Rule 134.]
§ 502.135 Subpoena of Commission staff personnel, documents or things.
(a) A subpoena for the attendance of Commission staff personnel or for the production of documentary materials in the possession of the Commission shall be served upon the Secretary. If the subpoena is returnable at hearing, a motion to quash may be filed within seven (7) days of service and attendance shall not be required until the presiding officer rules on said motion. If the subpoena is served in connection with prehearing depositions, the procedure to be followed with respect to motions to quash and replies thereto will correspond to the procedures established with respect to motions and replies in § 502.132(c).
(b) The General Counsel shall designate an attorney to represent any Commission staff personnel subpoenaed under this section. The attorney so designated shall not thereafter participate in the Commission’s decision-making process concerning any issue in the proceeding.
(c) Rulings of the presiding officer issued under § 502.135(a) shall become final rulings of the Commission unless an appeal is filed within ten (10) days after date of issuance of such rulings or unless the Commission, on its own motion, reverses, modifies, or stays such rulings within twenty (20) days of their issuance. Replies to appeals may be filed within ten (10) days. No ruling of the presiding officer shall be effective until twenty (20) days from date of issuance unless the Commission otherwise directs. [Rule 135.]
§ 502.136 Enforcement.
In the event of failure to comply with any subpoena or order issued in connection therewith, the Commission may seek enforcement as provided in § 502.150(b). [Rule 136.]
Subpart J – Disclosures and Discovery
§ 502.141 Duty to disclose; general provisions governing discovery.
(a) Applicability. Unless otherwise stated in subpart S, T, or any other subpart of this part, the procedures described in this subpart are available in all adjudicatory proceedings under the Shipping Act of 1984.
(b) Initial disclosures. Except as otherwise stipulated or ordered by the Commission or presiding officer, and except as provided in this subpart related to disclosure of expert testimony, all parties must, within 7 days of service of a respondent’s answer to the complaint or Order of Investigation and Hearing and without awaiting a discovery request, provide to each other:
(1) The name and, if known, the address and telephone number of each individual likely to have discoverable information that the disclosing party may use to support its claims or defenses, unless the use would be solely for impeachment;
(2) A copy, or a description by category and location, of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses, unless the use would be solely for impeachment;
(3) An estimate of any damages claimed by the disclosing party who must also make available for inspection and copying the documents or other evidentiary material, unless privileged or protected from disclosure, on which the estimate is based, including materials bearing on the nature and extent of injuries suffered.
(c) For parties served or joined later. A party that is first served or otherwise joined after the answer is made must make the initial disclosures within seven (7) days after an order of intervention is granted, unless a different time is set by stipulation or order of presiding officer. All parties must also produce to the late-joined party any initial disclosures previously made.
(d) Disclosure of expert testimony. (1) In general. A party must disclose to the other parties the identity of any witness it may use in the proceeding to present evidence as an expert.
(2) Witnesses who are required to provide a written report. Unless otherwise stipulated or ordered by the presiding officer, if the witness is one retained or specially employed to provide expert testimony in the proceeding or one whose duties as the party’s employee regularly involve giving expert testimony, the disclosure must be accompanied by a written report, prepared and signed by the witness. The report must contain:
(i) A complete statement of all opinions the witness will express and the basis and reasons for them;
(ii) The facts or data considered by the witness in forming them;
(iii) Any exhibits that will be used to summarize or support them;
(iv) The witness’s qualifications, including a list of all publications authored in the previous 10 years;
(v) A list of all other proceedings or cases in which, during the previous 4 years, the witness testified as an expert in a trial, an administrative proceeding, or by deposition; and
(vi) A statement of the compensation to be paid for the study and testimony in the proceeding.
(3) Witnesses who are not required to provide a written report. Unless otherwise stipulated or ordered by the presiding officer, if the witness is not required to provide a written report under paragraph (d)(2) of this section, the disclosure must state:
(i) The subject matter on which the witness is expected to present evidence as an expert; and
(ii) Summary of the facts and opinions to which the witness is expected to testify.
(4) Time to disclose expert testimony. The time for disclosure of expert testimony must be addressed by the parties when they confer as provided in paragraph (h) of this section and, if applicable, must be included in the proposed discovery schedule submitted to the presiding officer.
(e) Scope of discovery and limits. (1) Unless otherwise limited by the presiding officer, or as otherwise provided in this subpart, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense – including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the presiding officer may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at hearing if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.
(2) Limitations on frequency and extent. (i) Specific limitations on electronically stored information. A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the presiding officer may nonetheless order discovery from such sources if the requesting party shows good cause. The presiding officer may specify conditions for the discovery.
(ii) When required. On motion or on its own, the presiding officer may limit the frequency or extent of discovery otherwise allowed by these rules if the presiding officer determines that:
(A) The discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;
(B) The party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or
(C) The burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the proceeding, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.
(f) Scope of discovery and limits – experts. (1) A party may depose any person who has been identified as an expert whose opinions may be presented in a proceeding. If a report is required of the witness, the deposition may be conducted only after the report is provided.
(2) Drafts of any report or disclosure required by these rules are not discoverable regardless of the form in which the draft is recorded.
(3) Communications between the party’s attorney and any expert witness required to provide a report are not discoverable regardless of the form of communications, except to the extent that the communications relate to compensation for the expert’s study or testimony; identify facts or data that the party’s attorney provided and that the expert considered in forming the opinions to be expressed; or identify assumptions that the party’s attorney provided and that the expert relied on in forming the opinions to be expressed.
(4) A party may not by interrogatories or deposition discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or to prepare for a proceeding and who is not expected to be presented as a witness; provided, however, that the presiding officer may permit such discovery and may impose such conditions as deemed appropriate upon a showing of exceptional circumstances under which it is impracticable for the party to obtain facts or opinions on the same subject by other means.
(g) Completion of discovery. Discovery must be completed within 150 days of the service of a respondent’s answer to the complaint or Order of Investigation and Hearing.
(h) Duty of the parties to confer. In all proceedings in which the procedures of this subpart are used, it is the duty of the parties to confer within 15 days after receipt of a respondent’s answer to a complaint or Order of Investigation and Hearing in order to: establish a schedule for the completion of discovery, including disclosures and discovery related to experts, within the 150-day period prescribed in paragraph (g) of this section; resolve to the fullest extent possible disputes relating to discovery matters; and expedite, limit, or eliminate discovery by use of admissions, stipulations and other techniques. The parties must submit the schedule to the presiding officer not later than 5 days after the conference. Nothing in this rule should be construed to preclude the parties from conducting discovery and conferring at an earlier date.
(i)(1) Conferences by order of the presiding officer. The presiding officer may at any time order the parties or their attorneys to participate in a conference at which the presiding officer may direct the proper use of the procedures of this subpart or make such orders as may be necessary to resolve disputes with respect to discovery and to prevent delay or undue inconvenience.
(2) Resolution of disputes. After making every reasonable effort to resolve discovery disputes, a party may request a conference or rulings from the presiding officer on such disputes. If necessary to prevent undue delay or otherwise facilitate conclusion of the proceeding, the presiding officer may order a hearing to commence before the completion of discovery.
(j) Protective orders. (1) In general. A party or any person from whom discovery is sought may move for a protective order. The motion must include a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without Commission or presiding officer action. The Commission or presiding officer may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following:
(i) Forbidding the disclosure or discovery;
(ii) Specifying terms, including time and place, for the disclosure or discovery;
(iii) Prescribing a discovery method other than the one selected by the party seeking discovery;
(iv) Forbidding inquiry into certain matters, or limiting the scope of disclosure or discovery to certain matters;
(v) Designating the persons who may be present while the discovery is conducted;
(vi) Requiring that a deposition be sealed and opened only on Commission or presiding officer order;
(vii) Requiring that a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a specified way; or
(viii) Requiring that the parties simultaneously file specified documents or information in sealed envelopes, to be opened as the Commission or presiding officer directs.
(2) Ordering discovery. If a motion for a protective order is denied in whole or in part, the Commission or presiding officer may, on just terms, order that any party or person provide or permit discovery.
(k) Supplementing responses. A party who has made a disclosure under paragraph (b) or (d) of this section, or who has responded to an interrogatory, request for production, or request for admission, must supplement or correct its disclosure or response:
(1) In a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in written communication; or
(2) As ordered by the presiding officer.
(l) Stipulations. Unless the presiding officer orders otherwise, the parties may stipulate that other procedures governing or limiting discovery be modified, but a stipulation extending the time for any form of discovery must have presiding officer’s approval if it would interfere with the time set for completing discovery, for adjudicating a motion, or for hearing. [Rule 201.]
§ 502.142 Persons before whom depositions may be taken.
(a) Within the United States. (1) In general. Within the United States or a territory or insular possession subject to United States jurisdiction, a deposition must be taken before:
(i) An officer authorized to administer oaths either by federal law or by the law in the place of examination; or
(ii) A person appointed by the Commission or the presiding officer to administer oaths and take testimony.
(b) In a foreign country. (1) In general. A deposition may be taken in a foreign country:
(i) Under an applicable treaty or convention;
(ii) under a letter of request, whether or not captioned a “letter rogatory”;
(iii) On notice, before a person authorized to administer oaths either by federal law or by the law in the place of examination; or
(iv) Before a person authorized by the Commission or the presiding officer to administer any necessary oath and take testimony.
(2) Issuing a letter of request or an authorization. A letter of request, an authorization, or both may be issued:
(i) On appropriate terms after an application and notice of it; and
(ii) Without a showing that taking the deposition in another manner is impracticable or inconvenient.
(3) Form of a request, notice, or authorization. When a letter of request or any other device is used according to a treaty or convention, it must be captioned in the form prescribed by that treaty or convention. A letter of request may be addressed “To the Appropriate Authority in [name of country].” A deposition notice or an authorization must designate by name or descriptive title the person before whom the deposition is to be taken.
(4) Letter of request – admitting evidence. Evidence obtained in response to a letter of request need not be excluded merely because it is not a verbatim transcript, because the testimony was not taken under oath, or because of any similar departure from the requirements for depositions taken within the United States.
(c) Disqualification. A deposition must not be taken before a person who is any party’s relative, employee, or attorney; who is related to or employed by any party’s attorney; or who is financially interested in the action. [Rule 202.]
§ 502.143 Depositions by oral examination.
(a) When a deposition may be taken. (1) Without leave. A party may, by oral questions, depose any person, including a party, without leave of the presiding officer except as provided in § 502.143(a)(2). The deponent’s attendance may be compelled by subpoena under subpart I of this part.
(2) With leave. A party must obtain leave of the presiding officer, if the parties have not stipulated to the deposition and:
(i) The deposition would result in more than 20 depositions being taken under this rule or § 502.144 by any party; or
(ii) The deponent has already been deposed in the case.
(b) Notice of the deposition; other formal requirements. (1) Notice in general. A party who wants to depose a person by oral questions must give reasonable written notice to every other party. The notice must state the time and place of the deposition and, if known, the deponent’s name and address. If the name is unknown, the notice must provide a general description sufficient to identify the person or the particular class or group to which the person belongs.
(2) Producing documents. If a subpoena duces tecum is to be served on the deponent, the materials designated for production, as set out in the subpoena, must be listed in the notice or in an attachment. The notice to a party deponent may be accompanied by a request under § 502.146 to produce documents and tangible things at the deposition.
(3) Method of recording. (i) Method stated in the notice. The party who notices the deposition must state in the notice the method for recording the testimony. Unless the presiding officer orders otherwise, testimony may be recorded by audio, audiovisual, or stenographic means. The noticing party bears the recording costs. Any party may arrange to transcribe a deposition.
(ii) Additional method. With prior notice to the deponent and other parties, any party may designate another method for recording the testimony in addition to that specified in the original notice. That party bears the expense of the additional record or transcript unless the presiding officer orders otherwise.
(4) By remote means. The parties may stipulate, or the presiding officer may on motion order, that a deposition be taken by telephone or other remote means.
(5) Officer’s duties. (i) Before the deposition. Unless the parties stipulate otherwise, a deposition must be conducted before an officer appointed or designated under § 502.142. The officer must begin the deposition with an on-the-record statement that includes:
(A) The officer’s name and business address;
(B) The date, time, and place of the deposition;
(C) The deponent’s name;
(D) The officer’s administration of the oath or affirmation to the deponent; and
(E) The identity of all persons present.
(ii) Conducting the deposition; avoiding distortion. If the deposition is recorded nonstenographically, the officer must repeat the items in § 502.143(b)(5)(i)(A) through (C) at the beginning of each unit of the recording medium. The deponent’s and attorneys’ appearance or demeanor must not be distorted through recording techniques.
(iii) After the deposition. At the end of a deposition, the officer must state on the record that the deposition is complete and must set out any stipulations made by the attorneys about custody of the transcript or recording and of the exhibits, or about any other pertinent matters.
(6) Notice or subpoena directed to an organization. In its notice or subpoena, a party may name as the deponent a public or private corporation, a partnership, an association, a governmental agency, or other entity and must describe with reasonable particularity the matters for examination. The named organization must then designate one or more officers, directors, or managing representatives, or designate other persons who consent to testify on its behalf; and it may set out the matters on which each person designated will testify. A subpoena must advise a nonparty organization of its duty to make this designation. The persons designated must testify about information known or reasonably available to the organization. This paragraph (6) does not preclude a deposition by any other procedure allowed by these rules.
(c) Examination and cross-examination; record of the examination; objections; written questions. (1) Examination and cross-examination. The examination and cross-examination of a deponent proceed as they would at hearing under the provisions of § 502.202. After putting the deponent under oath or affirmation, the officer must record the testimony by the method designated under § 502.143(b)(3). The testimony must be recorded by the officer personally or by a person acting in the presence and under the direction of the officer.
(2) Objections. An objection at the time of the examination, whether to evidence, to a party’s conduct, to the officer’s qualifications, to the manner of taking the deposition, or to any other aspect of the deposition, must be noted on the record, but the examination still proceeds; the testimony is taken subject to any objection. An objection must be stated concisely in a nonargumentative and nonsuggestive manner. A person may instruct a deponent not to answer only when necessary to preserve a privilege, to enforce a limitation ordered by the presiding officer, or to present a motion under § 502.143(d)(2).
(3) Participating through written questions. Instead of participating in the oral examination, a party may serve written questions in a sealed envelope on the party noticing the deposition, who must deliver them to the officer. The officer must ask the deponent those questions and record the answers verbatim.
(d) Duration; sanction; motion to terminate or limit. (1) Duration. Unless otherwise stipulated or ordered by the presiding officer, a deposition is limited to 1 day of 7 hours. The presiding officer must allow additional time consistent with § 502.141(e) if needed to fairly examine the deponent or if the deponent, another person, or any other circumstance impedes or delays the examination.
(2) Motion to terminate or limit. (i) Grounds. At any time during a deposition, the deponent or a party may move to terminate or limit it on the ground that it is being conducted in bad faith or in a manner that unreasonably annoys, embarrasses, or oppresses the deponent or party. The motion may be filed with the presiding officer. If the objecting deponent or party so demands, the deposition must be suspended for the time necessary to obtain an order.
(ii) Order. The presiding officer may order that the deposition be terminated or may limit its scope and manner as provided in § 502.141(j). If terminated, the deposition may be resumed only by order of the Commission or presiding officer.
(e) Review by the witness; changes. (1) Review; statement of changes. On request by the deponent or a party before the deposition is completed, the deponent must be allowed 15 days after being notified by the officer that the transcript or recording is available in which:
(i) To review the transcript or recording; and
(ii) If there are changes in form or substance, to sign a statement listing the changes and the reasons for making them.
(2) Changes indicated in the officer’s certificate. The officer must note in the certificate prescribed by § 502.143(f)(1) whether a review was requested and, if so, must attach any changes the deponent makes during the 15-day period.
(f) Certification and delivery; exhibits; copies of the transcript or recording. (1) Certification and delivery. The officer must certify in writing that the witness was duly sworn and that the deposition, transcript or recording accurately records the witness’s testimony. The certificate must accompany the record of the deposition. Unless the presiding officer orders otherwise, the officer must seal the deposition in an envelope or package bearing the title of the action and marked “Deposition of [witness’s name]” and must promptly send it to the attorney who arranged for the transcript or recording. The attorney must store it under conditions that will protect it against loss, destruction, tampering, or deterioration.
(2) Documents and tangible things. (i) Originals and copies. Documents and tangible things produced for inspection during a deposition must, on a party’s request, be marked for identification and attached to the deposition. Any party may inspect and copy them. But if the person who produced them wants to keep the originals, the person may:
(A) Offer copies to be marked, attached to the deposition, and then used as originals, after giving all parties a fair opportunity to verify the copies by comparing them with the originals; or
(B) Give all parties a fair opportunity to inspect and copy the originals after they are marked, in which event the originals may be used as if attached to the deposition.
(ii) Order regarding the originals. Any party may move for an order that the originals be attached to the deposition pending final disposition of the case.
(3) Copies of the transcript or recording. Unless otherwise stipulated or ordered by the presiding officer, the officer must retain the stenographic notes of a deposition taken stenographically or a copy of the recording of a deposition taken by another method. When paid reasonable charges, the officer must furnish a copy of the transcript or recording to any party or the deponent. [Rule 203.]
§ 502.144 Depositions by written questions.
(a) When a deposition may be taken. (1) Without leave. A party may, by written questions, depose any person, including a party, without leave of the presiding officer except as provided in paragraph (a)(2) of this section. The deponent’s attendance may be compelled by subpoena under subpart I of this part.
(2) With leave. A party must obtain leave of the presiding officer, if the parties have not stipulated to the deposition and:
(i) The deposition would result in more than 20 depositions being taken under this rule or § 502.143 by any party;
(ii) The deponent has already been deposed in the case.
(3) Service; required notice. A party who wants to depose a person by written questions must serve them on every other party, with a notice stating, if known, the deponent’s name and address. If the name is unknown, the notice must provide a general description sufficient to identify the person or the particular class or group to which the person belongs. The notice must also state the name or descriptive title and the address of the officer before whom the deposition will be taken.
(4) Questions directed to an organization. A public or private corporation, a partnership, an association, or a governmental agency may be deposed by written questions in accordance with § 502.143(b)(6).
(5) Questions from other parties. Any questions to the deponent from other parties must be served on all parties as follows: Cross-questions, within 14 days after being served with the notice and direct questions; redirect questions, within 7 days after being served with cross-questions; and recross-questions, within 7 days after being served with redirect questions. The presiding officer may, for good cause, extend or shorten these times.
(b) Delivery to the officer; officer’s duties. The party who noticed the deposition must deliver to the officer before whom the deposition will be taken a copy of all the questions served and of the notice. The officer must promptly proceed to:
(1) Take the deponent’s testimony in response to the questions;
(2) Prepare and certify the deposition; and
(3) Send it to the party, attaching a copy of the questions and of the notice.
(c) Notice of completion or filing. (1) Completion. The party who noticed the deposition must notify all other parties when it is completed.
(2) Filing. A party who files the deposition must promptly notify all other parties of the filing. [Rule 204.]
§ 502.145 Interrogatories to parties.
(a) In general. (1) Number. Unless otherwise stipulated or ordered by the presiding officer, a party may serve on any other party no more than 50 written interrogatories, including all discrete subparts. Leave to serve additional interrogatories may be granted to the extent consistent with § 502.141(e)(2).
(2) Scope. An interrogatory may relate to any matter that may be inquired into under § 502.141(e) and (f). An interrogatory is not objectionable merely because it asks for an opinion or contention that relates to fact or the application of law to fact, but the presiding officer may order that the interrogatory need not be answered until designated discovery is complete, or until a prehearing conference or some other time.
(b) Answers and objections. (1) Responding party. The interrogatories must be answered:
(i) By the party to whom they are directed; or
(ii) If that party is a public or private corporation, a partnership, an association, or a governmental agency, by any officer or representative, who must furnish the information available to the party.
(2) Time to respond. The responding party must serve its answers and any objections within 30 days after being served with the interrogatories. A shorter or longer time may be stipulated to as provided in § 502.141(l) of this subpart or be ordered by the presiding officer.
(3) Answering each interrogatory. Each interrogatory must, to the extent it is not objected to, be answered separately and fully in writing under oath.
(4) Objections. The grounds for objecting to an interrogatory must be stated with specificity. Any ground not stated in a timely objection is waived unless the presiding officer, for good cause, excuses the failure.
(5) Signature. The person who makes the answers must sign them, and the attorney who objects must sign any objections.
(c) Use. An answer to an interrogatory may be used to the extent allowed by the rules in this part.
(d) Option to produce business records. If the answer to an interrogatory may be determined by examining, auditing, compiling, abstracting, or summarizing a party’s business records (including electronically stored information), and if the burden of deriving or ascertaining the answer will be substantially the same for either party, the responding party may answer by:
(1) Specifying the records that must be reviewed, in sufficient detail to enable the interrogating party to locate and identify them as readily as the responding party could; and
(2) Giving the interrogating party a reasonable opportunity to examine and audit the records and to make copies, compilations, abstracts, or summaries. [Rule 205.]
§ 502.146 Producing documents, electronically stored information, and tangible things, or entering onto land, for inspection and other purposes.
(a) In general. A party may serve on any other party a request within the scope of § 502.141(e) and (f):
(1) To produce and permit the requesting party or its representative to inspect, copy, test, or sample the following items in the responding party’s possession, custody, or control:
(i) Any designated documents or electronically stored information, including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations, stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form; or
(ii) Any designated tangible things; or
(2) To permit entry onto designated land or other property possessed or controlled by the responding party, so that the requesting party may inspect, measure, survey, photograph, test, or sample the property or any designated object or operation on it.
(b) Procedure. (1) Contents of the request. The request:
(i) Must describe with reasonable particularity each item or category of items to be inspected;
(ii) Must specify a reasonable time, place, and manner for the inspection and for performing the related acts; and
(iii) May specify the form or forms in which electronically stored information is to be produced.
(2) Responses and objections. (i) Time to respond. The party to whom the request is directed must respond in writing within 30 days after being served. A shorter or longer time may be stipulated to as provided in § 502.141(l) of this subpart or be ordered by the presiding officer.
(ii) Responding to each item. For each item or category, the response must either state that inspection and related activities will be permitted as requested or state an objection to the request, including the reasons.
(iii) Objections. An objection to part of a request must specify the part and permit inspection of the rest.
(iv) Responding to a request for production of electronically stored information. The response may state an objection to a requested form for producing electronically stored information. If the responding party objects to a requested form, or if no form was specified in the request, the party must state the form or forms it intends to use.
(v) Producing the documents or electronically stored information. Unless otherwise stipulated or ordered by the presiding officer, these procedures apply to producing documents or electronically stored information:
(A) A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;
(B) If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms; and
(C) A party need not produce the same electronically stored information in more than one form.
(c) Nonparties. By subpoena under subpart I of this part, a nonparty may be compelled to produce documents and tangible things or to permit an inspection. [Rule 206.]
§ 502.147 Requests for admission.
(a) Scope and procedure. (1) Scope. A party may serve on any other party a written request to admit, for the purposes of the pending action only, the truth of any nonprivileged relevant matters relating to facts, the application of law to fact, or opinions about either, and the genuineness of any described documents.
(2) Form; copies of documents. Each matter must be separately stated. A request to admit the genuineness of a document must be accompanied by a copy of the document unless it is, or has been, otherwise furnished or made available for inspection and copying.
(3) Time to respond; effect of failure to respond. A matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney. A shorter or longer time for responding may be stipulated to as provided in § 502.141(l) of this subpart or be ordered by the presiding officer.
(4) Answer. If a matter is not admitted, the answer must specifically deny it or state in detail why the answering party cannot truthfully admit or deny it. A denial must fairly respond to the substance of the matter; and when good faith requires that a party qualify an answer or deny only a part of a matter, the answer must specify the part admitted and qualify or deny the rest. The answering party may assert lack of knowledge or information as a reason for failing to admit or deny only if the party states that it has made reasonable inquiry and that the information it knows or can readily obtain is insufficient to enable it to admit or deny.
(5) Objections. The grounds for objecting to a request must be stated. A party may not object solely on the ground that the request presents a genuine issue for adjudication.
(6) Motion regarding the sufficiency of an answer or objection. The requesting party may move for a determination of the sufficiency of an answer or objection. Unless the presiding officer finds an objection justified, the presiding officer must order that an answer be served. On finding that an answer does not comply with this rule, the presiding officer may order either that the matter is admitted or that an amended answer be served. The presiding officer may defer a decision until a prehearing conference or a specified time prior to hearing.
(b) Effect of admission; withdrawal or amendment of admission. A matter admitted under this rule is conclusively established unless the presiding officer, on motion, permits the admission to be withdrawn or amended. The presiding officer may permit withdrawal or amendment if it would promote the presentation of the merits of the action and if the presiding officer is not persuaded that it would prejudice the requesting party in maintaining or defending the action on the merits. An admission under this rule is not an admission for any other purpose and cannot be used against the party in any other proceeding. [Rule 207.]
§ 502.148 Use of discovery procedures directed to Commission staff personnel.
(a) Discovery procedures described in §§ 502.142 through 502.147, directed to Commission staff personnel must be permitted and must be governed by the procedures set forth in those sections except as modified by paragraphs (b) and (c) of this section. All notices to take depositions, written interrogatories, requests for production of documents and other things, requests for admissions, and any motions in connection with the foregoing, must be served on the Secretary of the Commission.
(b) The General Counsel must designate an attorney to represent any Commission staff personnel to whom any discovery requests or motions are directed. The attorney so designated must not thereafter participate in the Commission’s decision-making process concerning any issue in the proceeding.
(c) Rulings of the presiding officer issued under paragraph (a) of this section must become final rulings of the Commission unless an appeal is filed within 10 days after date of issuance of such rulings or unless the Commission on its own motion reverses, modifies, or stays such rulings within 20 days of their issuance. Replies to appeals may be filed within 10 days. No motion for leave to appeal is necessary in such instances and no ruling of the presiding officer must be effective until 20 days from date of issuance unless the Commission otherwise directs. [Rule 208.]
§ 502.149 Use of depositions at hearings.
(a) Using depositions. (1) In general. At a hearing, all or part of a deposition may be used against a party on these conditions:
(i) The party was present or represented at the taking of the deposition or had reasonable notice of it;
(ii) It is used to the extent it would be admissible if the deponent were present and testifying; and
(iii) The use is allowed by § 502.149(a)(2) through (7).
(2) Impeachment and other uses. Any party may use a deposition to contradict or impeach the testimony given by the deponent as a witness, or for any other purpose allowed by § 502.204 of subpart L of this part.
(3) Deposition of party, representative, or designee. An adverse party may use for any purpose the deposition of a party or anyone who, when deposed, was the party’s officer, director, managing representative, or designee under § 502.143(b)(6) or § 502.144(a)(4).
(4) Unavailable witness. A party may use for any purpose the deposition of a witness, whether or not a party, if the Commission or presiding officer finds:
(i) That the witness is dead;
(ii) That the witness cannot attend or testify because of age, illness, infirmity, or imprisonment;
(iii) That the party offering the deposition could not procure the witness’s attendance by subpoena; or
(iv) On motion and notice, that exceptional circumstances make it desirable, in the interest of justice and with due regard to the importance of live testimony at a hearing, to permit the deposition to be used.
(5) Using part of a deposition. If a party offers in evidence only part of a deposition, an adverse party may require the offeror to introduce other parts that in fairness should be considered with the part introduced, and any party may itself introduce any other parts.
(6) Substituting a party. Substituting a party does not affect the right to use a deposition previously taken.
(7) Deposition taken in an earlier action. A deposition lawfully taken and, if required, filed in any Federal or State court action may be used in a later action involving the same subject matter between the same parties, or their representatives or successors in interest, to the same extent as if taken in the later action. A deposition previously taken may also be used as allowed by § 502.204 of subpart L of this part.
(b) Objections to admissibility. Subject to § 502.142(b) and § 502.149(d)(3), an objection may be made at a hearing to the admission of any deposition testimony that would be inadmissible if the witness were present and testifying.
(c) Form of presentation. Unless the presiding officer orders otherwise, a party must provide a transcript of any deposition testimony the party offers, but may provide the presiding officer with the testimony in nontranscript form as well.
(d) Waiver of objections. (1) To the notice. An objection to an error or irregularity in a deposition notice is waived unless promptly served in writing on the party giving the notice.
(2) To the officer’s qualification. An objection based on qualification of the officer before whom a deposition is to be taken is waived if not made:
(i) Before the deposition begins; or
(ii) Promptly after the basis for disqualification becomes known or, with reasonable diligence, could have been known.
(3) To the taking of the deposition. (i) Objection to competence, relevance, or materiality. An objection to a deponent’s competence, or to the competence, relevance, or materiality of testimony, is not waived by a failure to make the objection before or during the deposition, unless the ground for it might have been corrected at that time.
(ii) Objection to an error or irregularity. An objection to an error or irregularity at an oral examination is waived if:
(A) It relates to the manner of taking the deposition, the form of a question or answer, the oath or affirmation, a party’s conduct, or other matters that might have been corrected at that time; and
(B) It is not timely made during the deposition.
(iii) Objection to a written question. An objection to the form of a written question under § 502.144 of this subpart is waived if not served in writing on the party submitting the question within the time for serving responsive questions or, if the question is a recross-question, within 7 days after being served with it.
(4) To completing and returning the deposition. An objection to how the officer transcribed the testimony, or prepared, signed, certified, sealed, endorsed, sent, or otherwise dealt with the deposition, is waived unless a motion to suppress is made promptly after the error or irregularity becomes known or, with reasonable diligence, could have been known. [Rule 209.]
§ 502.150 Motions to compel initial disclosures or compliance with discovery requests; failure to comply with order to make disclosure or answer or produce documents; sanctions; enforcement.
(a) Motion for order to compel initial disclosures or compliance with discovery requests. (1) A party may file a motion pursuant to § 502.69 for an order compelling compliance with the requirement for initial disclosures provided in § 502.141 or with its discovery requests as provided in this subpart, if a deponent fails to answer a question asked at a deposition or by written questions; a corporation or other entity fails to make a designation of an individual who will testify on its behalf; a party fails to answer an interrogatory; or a party fails to respond that inspection will be permitted, or fails to permit inspection, as requested under § 502.146 of this subpart. For purposes of this section, a failure to make a disclosure, answer, or respond includes an evasive or incomplete disclosure, answer, or response.
(2) A motion to compel must include:
(i) A certification that the moving party has conferred in good faith or attempted to confer with the party failing to make initial disclosure or respond to discovery requests as provided in this subpart in an effort to obtain compliance without the necessity of a motion;
(ii) A copy of the discovery requests that have not been answered or for which evasive or incomplete responses have been given. If the motion is limited to specific discovery requests, only those requests are to be included;
(iii) If a disclosure has been made or an answer or response has been given, a copy of the disclosure, answer, or response in its entirety;
(iv) A copy of the certificate of service that accompanied the discovery request; and
(v) A request for relief and supporting argument, if any.
(3) A party may file a response to the motion within 7 days of the service date of the motion. Unless there is a dispute with respect to the accuracy of the versions of the discovery requests, responses thereto, or the disclosures submitted by the moving party, the response must not include duplicative copies of them.
(4) A reply to a response is not allowed unless requested by the presiding officer, or upon a showing of extraordinary circumstances.
(b) Failure to comply with order compelling disclosures or discovery. If a party or a party’s officer or authorized representative fails or refuses to obey an order requiring it to make disclosures or to respond to discovery requests, the presiding officer upon his or her own initiative or upon motion of a party may make such orders in regard to the failure or refusal as are just. A motion must include a certification that the moving party has conferred in good faith or attempted to confer with the disobedient party in an effort to obtain compliance without the necessity of a motion. An order of the presiding officer may:
(1) Direct that the matters included in the order or any other designated facts must be taken to be established for the purposes of the action as the party making the motion claims;
(2) Prohibit the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence; or
(3) Strike pleadings in whole or in part; staying further proceedings until the order is obeyed; or dismissing the action or proceeding or any party thereto, or rendering a decision by default against the disobedient party.
(c) Enforcement of orders and subpoenas. In the event of refusal to obey an order or failure to comply with a subpoena, the Attorney General at the request of the Commission, or any party injured thereby may seek enforcement by a United States district court having jurisdiction over the parties. Any action with respect to enforcement of subpoenas or orders relating to depositions, written interrogatories, or other discovery matters must be taken within 20 days of the date of refusal to obey or failure to comply. A private party must advise the Commission 5 days (excluding Saturdays, Sundays and legal holidays) before applying to the court of its intent to seek enforcement of such subpoenas and discovery orders.
(d) Persons and documents located in a foreign country. Orders of the presiding officer directed to persons or documents located in a foreign country must become final orders of the Commission unless an appeal to the Commission is filed within 10 days after date of issuance of such orders or unless the Commission on its own motion reverses, modifies, or stays such rulings within 20 days of their issuance. Replies to appeals may be filed within 10 days. No motion for leave to appeal is necessary in such instances and no orders of the presiding officer must be effective until 20 days from date of issuance unless the Commission otherwise directs. [Rule 210.]
§§ 502.151-502.169 [Reserved]
Subpart K [Reserved]
§§ 502.181-502.187 [Reserved]
Subpart L – Presentation of Evidence
§ 502.201 Applicability and scope.
(a) The rules in this subpart apply to adjudicatory proceedings conducted under the statutes administered by the Commission involving matters which require determination after notice and opportunity for hearing. Adjudicatory proceedings are formal proceedings commenced upon the filing of a sworn complaint or by Order of the Commission. Such proceedings will be conducted pursuant to the Administrative Procedure Act, 5 U.S.C. 551-559, and the rules in this subpart.
(b) The term hearing means a formal adjudicatory proceeding in which evidence is presented orally, or through written statements, or by combination thereof. The term oral hearing means a hearing at which evidence is presented through oral testimony of a witness. [Rule 201].
§ 502.202 Right of parties to present evidence.
Every party has the right to present its case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts. The presiding officer, however, has the right and duty to limit the introduction of evidence and the examination and cross-examination of witnesses when, in his or her judgment, such evidence or examination is irrelevant, immaterial, or unduly repetitious. [Rule 202.]
§ 502.203 Burden of proof.
In all cases governed by the requirements of the Administrative Procedure Act, 5 U.S.C. 556(d), the burden of proof is on the proponent of the motion or the order. [Rule 203.]
§ 502.204 Evidence admissible.
(a) In any proceeding under the rules in this part and in accordance with the Administrative Procedure Act, all evidence which is relevant, material, reliable and probative, and not unduly repetitious or cumulative, will be admissible. All other evidence will be excluded. The presiding officer may consider the Federal Rules of Evidence for guidance.
(b) A party who objects to a ruling of the presiding officer rejecting or excluding proffered evidence may make an offer of proof. If the ruling excludes proffered oral testimony, an offer of proof may consist of a statement by counsel of the substance of the evidence that would be adduced, or in the discretion of the presiding officer, testimony of the witness. If the ruling excludes documents offered as evidence or reference to documents or records, the documents or records shall be marked for identification and will constitute the offer of proof. [Rule 204.]
§ 502.205 Records in other proceedings.
Portions of the record of other proceedings may be received in evidence. A true copy of the records sought to be admitted must be presented in the form of an exhibit unless the presiding officer accepts the parties’ stipulation that such records may be incorporated by reference. [Rule 205.]
§ 502.206 Documents incorporated into the record by reference.
Any matter contained in a document on file with the Commission that is available to the public may be received in evidence through incorporation by reference without producing such document, provided that the matter so offered is specified in such manner as to be clearly identified, with sufficient particularity, and readily located electronically. [Rule 206.]
§ 502.207 Stipulations.
The parties may, and are encouraged to, stipulate any facts involved in the proceeding and include them in the record with the consent of the presiding officer. A stipulation may be admitted even if all parties do not agree, provided that any party who does not agree to the stipulation has the right to cross-examine and offer rebuttal evidence. [Rule 207.]
§ 502.208 Objection to public disclosure of information.
(a) If any party wishes to present confidential information or upon objection to public disclosure of any information sought to be elicited, the requirements and procedures in § 502.5 will apply.
(b) In an oral hearing, the presiding officer may in his or her discretion order that a witness will disclose such information only in the presence of the parties and those designated and authorized by the presiding officer. Any transcript of such testimony will be held confidential to the extent the presiding officer determines. Copies of transcripts will be served only to authorized parties or their representatives or other parties as the presiding officer may designate.
(c) Any information given pursuant to this section may be used by the presiding officer or the Commission if deemed necessary to a correct decision in the proceeding. [Rule 208.]
§ 502.209 Prehearing conference.
(a)(1) Prior to any hearing, the Commission or presiding officer may direct all interested parties, by written notice, to attend one or more prehearing conferences for the purpose of considering any settlement under § 502.91, formulating the issues in the proceeding, and determining other matters to aid in its disposition. In addition to any offers of settlement or proposals of adjustment, the following may be considered:
(i) Simplification of the issues;
(ii) The necessity or desirability of amendments to the pleadings;
(iii) The possibility of obtaining admissions of fact and of documents that will avoid unnecessary proof;
(iv) Limitation of the number of witnesses;
(v) The procedure to be used at the hearing;
(vi) The distribution to the parties prior to the hearing of written testimony and exhibits;
(vii) Consolidation of the examination of witnesses by counsel;
(viii) Such other matters as may aid in the disposition of the proceeding.
(2) Prior to the hearing, the presiding officer may require exchange of exhibits and any other material that may expedite the hearing. The presiding officer will assume the responsibility of accomplishing the purposes of the notice of prehearing conference so far as this may be possible without prejudice to the rights of any party.
(3) The presiding officer will rule upon all matters presented for decision, orally upon the record when feasible, or by subsequent ruling in writing. If a party determines that a ruling made orally does not cover fully the issue presented, or is unclear, such party may file a motion requesting a further ruling within ten (10) days after receipt of the transcript.
(b) In any proceeding under the rules in this part, the presiding officer hold an informal conference prior to the taking of testimony, or may recess the hearing for such a conference, with a view to carrying out the purposes of this section.
(c) At any prehearing conference, consideration may be given to whether the use of alternative dispute resolution would be appropriate or useful for the disposition of the proceeding whether or not there has been previous consideration of such use. [Rule 209.]
§ 502.210 Prehearing statements.
(a) Unless a waiver is granted by the presiding officer, it is the duty of all parties to a proceeding to prepare a statement or statements at a time and in the manner to be established by the presiding officer provided that there has been reasonable opportunity for discovery. To the extent possible, joint statements should be prepared.
(b) The prehearing statement must state the name of the party or parties on whose behalf it is presented and briefly set forth the following matters, unless otherwise ordered by the presiding officer:
(1) Issues involved in the proceeding.
(2) Facts stipulated pursuant to the procedures together with a statement that the party or parties have communicated or conferred in a good faith effort to reach stipulation to the fullest extent possible.
(3) Facts in dispute.
(4) Witnesses and exhibits by which disputed facts will be litigated.
(5) A brief statement of applicable law.
(6) The conclusion to be drawn.
(7) Suggested time and location of hearing and estimated time required for presentation of the party’s or parties’ case.
(8) Any appropriate comments, suggestions, or information which might assist the parties in preparing for the hearing or otherwise aid in the disposition of the proceeding.
(c) The presiding officer may, for good cause shown, permit a party to introduce facts or argue points of law outside the scope of the facts and law outlined in the prehearing statement. Failure to file a prehearing statement, unless waiver has been granted by the presiding officer, may result in dismissal of a party from the proceeding, dismissal of a complaint, judgment against respondents, or imposition of such other sanctions as may be appropriate under the circumstances.
(d) Following the submission of prehearing statements, the presiding officer may, upon motion or otherwise, convene a prehearing conference for the purpose of further narrowing issues and limiting the scope of the hearing if, in his or her opinion, the prehearing statements indicate lack of dispute of material fact not previously acknowledged by the parties or lack of legitimate need for cross-examination and is authorized to issue appropriate orders consistent with the purposes stated in this section. [Rule 210.]
§ 502.211 Notice of time and place of oral hearing; postponement of hearing.
(a) The notice of an oral hearing will designate the time and place the person or persons who will preside, and the type of decision to be issued. The date or place of a hearing for which notice has been issued may be changed when warranted. Reasonable notice will be given to the parties or their representatives of the time and place of the change thereof, due regard being had for the public interest and the convenience and necessity of the parties or their representatives. Notice may be served by mail, facsimile transmission, or electronic mail.
(b) Motions for postponement of any hearing date must be filed in accordance with § 502.104. [Rule 211.]
§ 502.212 Exceptions to rulings of presiding officer unnecessary.
A formal exception to a ruling or order is unnecessary. When the ruling or order is requested or made, the party doing so need only state the action that it wants the presiding officer to take or that it objects to, along with the grounds for the request or objection. Failing to object does not prejudice a party who had no opportunity to do so when the ruling or order was made. [Rule 212.]
§ 502.213 Official transcript.
(a) The Commission will designate the official reporter for all hearings. The official transcript of testimony taken, together with any exhibits and any briefs or memoranda of law filed therewith, will be filed with the Commission. Transcripts of testimony will be available in any proceeding under the rules in this part, at actual cost of duplication.
(b)(1) Where the Commission does not request daily copy service, any party requesting such service must bear the incremental cost of transcription above the regular copy transcription cost borne by the Commission, in addition to the actual cost of duplication. Where the requesting party applies for and demonstrates that the furnishing of daily copy is indispensable to the protection of a vital right or interest in achieving a fair hearing, the presiding officer in the proceeding in which the application is made will order that daily copy service be provided the requesting party at the actual cost of duplication, with the full cost of transcription being borne by the Commission.
(2) In the event a request for daily copy is denied by the presiding officer, the requesting party, in order to obtain daily copy, must pay the cost of transcription over and above that borne by the Commission, i.e., the incremental cost between that paid by the Commission when it requests regular copy and when it requests daily copy. The decision of the presiding officer in this situation is interpreted as falling within the scope of the functions and powers of the presiding officer, as defined in § 502.25(a).
(c) Motions made at the hearing to correct the transcript will be acted upon by the presiding officer. Motions made after an oral hearing to correct the record must be filed with the presiding officer within twenty-five (25) days after the last day of hearing or any session thereof, unless otherwise directed by the presiding officer, and must be served on all parties. If no objections are received within ten (10) days after date of service, the transcript will, upon approval of the presiding officer, be changed to reflect such corrections. If objections are received, the motion will be acted upon with due consideration of the stenographic record of the hearing. [Rule 213.]
§ 502.214 Briefs; requests for findings.
(a) The presiding officer will determine the time and manner of filing briefs and any enlargement of time.
(b) Briefs will be served upon all parties pursuant to subpart H of this part.
(c) Unless otherwise ordered by the presiding officer, opening or initial briefs must contain the following matters in separately captioned sections:
(1) Introductory section describing the nature and background of the case;
(2) Proposed findings of fact in serially numbered paragraphs with reference to exhibit numbers and pages of the transcript;
(3) Argument based upon principles of law with appropriate citations of the authorities relied upon; and
(4) Conclusions.
(d) All briefs must contain a subject index or table of contents with page references and a list of authorities cited.
(e) All briefs filed pursuant to this section must ordinarily be limited to eighty (80) pages in length, exclusive of pages containing the table of contents, table of authorities, and certificate of service, unless the presiding officer allows the parties to exceed this limit for good cause shown and upon application filed not later than seven (7) days before the time fixed for filing of such a brief or reply. [Rule 214.]
§ 502.215 Requests for enlargement of time for filing briefs.
Requests for enlargement of time to file briefs must conform to the requirements of § 502.102. [Rule 215.]
§ 502.216 Supplementing the record.
A motion to supplement the record, pursuant to § 502.69, should be filed if submission of evidence is desired after the parties’ presentation in a proceeding, but before issuance by the presiding officer of an initial decision. [Rule 216.]
§ 502.217 Record of decision.
The transcript of testimony and exhibits, together with all filings and motions filed in the proceeding, will constitute the exclusive record for decision. [Rule 217.]
Subpart M – Decisions; Appeals; Exceptions
§ 502.221 Appeal from ruling of presiding officer other than orders of dismissal in whole or in part.
(a) Rulings of the presiding officer may not be appealed prior to or during the course of the hearing, or subsequent thereto, if the proceeding is still before him or her, except where the presiding officer finds it necessary to allow an appeal to the Commission to prevent substantial delay, expense, or detriment to the public interest, or undue prejudice to a party.
(b) Any party seeking to appeal must file a motion for leave to appeal no later than fifteen (15) days after written service or oral notice of the ruling in question, unless the presiding officer, for good cause shown, enlarges or shortens the time. Any such motion must contain the grounds for leave to appeal and the appeal itself.
(c) Replies to the motion for leave to appeal and the appeal may be filed within fifteen (15) days after date of service thereof, unless the presiding officer, for good cause shown, enlarges or shortens the time. If the motion is granted, the presiding officer must certify the appeal to the Commission.
(d) Unless otherwise provided, the certification of the appeal will not operate as a stay of the proceeding before the presiding officer.
(e) The provisions of § 502.10 do not apply to this section. [Rule 221.]
§ 502.222 [Reserved]
§ 502.223 Decisions – Administrative law judges.
To the administrative law judges is delegated the authority to make and serve initial or recommended decisions. All initial and recommended decisions will include a statement of findings and conclusions, as well as the reasons or basis therefor, upon all the material issues presented on the record, and the appropriate rule, order, sanction, relief, or denial thereof. Where appropriate, the statement of findings and conclusions should be numbered. Initial decisions should address only those issues necessary to a resolution of the material issues presented on the record. A copy of each decision when issued shall be served on the parties to the proceeding. In proceedings involving overcharge claims, the presiding officer may, where appropriate, require that the carrier publish notice in its tariff of the substance of the decision. This provision shall also apply to decisions issued pursuant to subpart T of this part. [Rule 223.]
§ 502.224 Separation of functions.
The separation of functions as required by 5 U.S.C. 554(d) shall be observed in proceedings under subparts A to Q inclusive, of this part. [Rule 224.]
§ 502.225 Decisions – Commission.
All final decisions will include a statement of findings and conclusions, as well as the reasons or basis therefor, upon all the material issues presented on the record, and the appropriate rule, order, sanction, relief, or denial thereof. A copy of each decision when issued shall be served on the parties to the proceeding. This provision shall also apply to decisions issued pursuant to subpart T of this part. [Rule 225.]
§ 502.226 Decision based on official notice; public documents.
(a) Official notice may be taken of such matters as might be judicially noticed by the courts, or of technical or scientific facts within the general knowledge of the Commission as an expert body, provided, that where a decision or part thereof rests on the official notice of a material fact not appearing in the evidence in the record, the fact of official notice shall be so stated in the decision, and any party, upon timely request, shall be afforded an opportunity to show the contrary.
(b) Whenever there is offered in evidence (in whole or in part) a public document, such as an official report, decision, opinion, or published scientific or economic statistical data issued by any of the executive departments (or their subdivisions), legislative agencies or committees, or administrative agencies of the Federal Government (including Government-owned corporations), or a similar document issued by a state or its agencies, and such document (or part thereof) has been shown by the offeror to be reasonably available to the public, such document need not be produced or marked for identification, but may be offered in evidence as a public document by specifying the document or relevant part thereof. [Rule 226.]
§ 502.227 Exceptions to decisions or orders of dismissal of administrative law judge; replies thereto; review of decisions or orders of dismissal by Commission; and judicial review.
(a)(1) Within twenty-two (22) days after date of service of the initial decision, unless a shorter period is fixed under § 502.103, any party may file a memorandum excepting to any conclusions, findings, or statements contained in such decision, and a brief in support of such memorandum. Such exceptions and brief shall constitute one document, shall indicate with particularity alleged errors, shall indicate transcript page and exhibit number when referring to the record, and shall be served on all parties pursuant to subpart H of this part.
(2) Any adverse party may file and serve a reply to such exceptions within twenty-two (22) days after the date of service thereof, which shall contain appropriate transcript and exhibit references.
(3) Whenever the officer who presided at the reception of the evidence, or other qualified officer, makes an initial decision, such decision shall become the decision of the Commission thirty (30) days after date of service thereof (and the Secretary shall so notify the parties), unless within such 30-day period, or greater time as enlarged by the Commission for good cause shown, request for review is made in exceptions filed or a determination to review is made by the Commission on its own initiative.
(4) A decision or order of dismissal by an administrative law judge shall only be considered final for purposes of judicial review if the party has first sought review by the Commission pursuant to this section.
(5) Upon the filing of exceptions to, or review of, an initial decision, such decision shall become inoperative until the Commission determines the matter.
(6) Where exceptions are filed to, or the Commission reviews, an initial decision, the Commission, except as it may limit the issues upon notice or by rule, will have all the powers which it would have in making the initial decision. Whenever the Commission shall determine to review an initial decision on its own initiative, notice of such intention shall be served upon the parties.
(7) The time periods for filing exceptions and replies to exceptions, prescribed by this section, shall not apply to proceedings conducted under § 502.75.
(b)(1) If an administrative law judge has granted a motion for dismissal of the proceeding in whole or in part, any party desiring to appeal must file such appeal no later than twenty-two (22) days after service of the ruling on the motion in question.
(2) Any adverse party may file and serve a reply to an appeal under this paragraph within twenty-two (22) days after the appeal is served.
(3) The denial of a petition to intervene or withdrawal of a grant of intervention shall be deemed to be a dismissal within the meaning of this paragraph.
(c) Whenever an administrative law judge orders dismissal of a proceeding in whole or in part, such order, in the absence of appeal, shall become the order of the Commission thirty (30) days after date of service of such order (and the Secretary shall so notify the parties), unless within such 30-day period the Commission decides to review such order on its own motion, in which case notice of such intention shall be served upon the parties.
(d) The Commission shall not, on its own initiative, review any initial decision or order of dismissal unless such review is requested by an individual Commissioner. Any such request must be transmitted to the Secretary within thirty (30) days after date of service of the decision or order. Such request shall be sufficient to bring the matter before the Commission for review.
(e) All briefs and replies filed pursuant to this section shall ordinarily be limited to fifty (50) pages in length, exclusive of pages containing the table of contents, table of authorities, and certificate of service, unless the Commission allows the parties to exceed this limit for good cause shown and upon application filed not later than seven (7) days before the time fixed for filing of such a brief or reply. [Rule 227.]
§ 502.228 Request for enlargement of time to file exceptions and replies to exceptions.
Requests for enlargement of time to file exceptions, and briefs in support of such exceptions, or replies to exceptions, must conform to the applicable provisions of § 502.102. Any enlargement of time granted will automatically extend by the same period, the date for the filing of notice or review by the Commission. [Rule 228.]
§ 502.229 Certification of record by presiding or other officer.
The presiding or other officer shall certify and transmit the entire record to the Commission when (a) exceptions are filed or the time therefor has expired, (b) notice is given by the Commission that the initial decision will be reviewed on its own initiative, or (c) the Commission requires the case to be certified to it for initial decision. [Rule 229.]
§ 502.230 Reopening by Commission.
(a) Reopening by the Commission. After an initial decision by the presiding officer, or in a matter otherwise pending before the Commission, but before issuance of a Commission decision, the Commission may, after petition and reply in conformity with paragraphs (b) and (c) of this section, or upon its own motion, reopen a proceeding for the purpose of taking further evidence.
(b) Motion to reopen. A motion to reopen shall be served in conformity with the requirements of subpart H and will set forth the grounds requiring reopening of the proceeding, including material changes of fact or law alleged to have occurred.
(c) Reply. Within ten (10) days following service of a motion to reopen, any party may reply to such motion.
(d) Remand by the Commission. Nothing contained in this rule precludes the Commission from remanding a proceeding to the presiding officer for the taking of addition evidence or determining points of law. [Rule 230.]
Subpart N – Oral Argument; Submission for Final Decision
§ 502.241 Oral argument.
(a) The Commission may hear oral argument either on its own motion or upon the written request of a party. If oral argument before the Commission is desired on exceptions to an initial or recommended decision, or on a motion, petition, or application, a request therefor shall be made in writing. Any party may make such a request irrespective of its filing exceptions under § 502.227. If a brief on exceptions is filed, the request for oral argument shall be incorporated in such brief. Requests for oral argument on any motion, petition, or application shall be made in the motion, petition, or application, or in the reply thereto. If the Commission determines to hear oral argument, a notice will be issued setting forth the order of presentation and the amount of time allotted to each party.
(b)(1) Requests for oral argument will be granted or denied in the discretion of the Commission.
(2) Parties requesting oral argument shall set forth the specific issues they propose to address at oral argument.
(c) Those who appear before the Commission for oral argument shall confine their argument to points of controlling importance raised on exceptions or replies thereto. Where the facts of a case are adequately and accurately dealt with in the initial or recommended decision, parties should, as far as possible, address themselves in argument to the conclusions.
(d) Effort should be made by parties taking the same position to agree in advance of the argument upon those persons who are to present their side of the case, and the names of such persons and the amount of time requested should be received by the Commission not later than ten (10) days before the date set for the argument. The fewer the number of persons making the argument the more effectively can the parties’ interests be presented in the time allotted. [Rule 241.]
§ 502.242 Submission to Commission for final decision.
A proceeding will be deemed submitted to the Commission for final decision as follows: (a) If oral argument is had, the date of completion thereof, or if memoranda on points of law are permitted to be filed after argument, the last date of such filing; (b) if oral argument is not had, the last date when exceptions or replies thereto are filed, or if exceptions are not filed, the expiration date for such exceptions; (c) in the case of an initial decision, the date of notice of the Commission’s intention to review the decision, if such notice is given. [Rule 242.]
§ 502.243 Participation of absent Commissioner.
Any Commissioner who is not present at oral argument and who is otherwise authorized to participate in a decision shall participate in making that decision after reading the transcript of oral argument unless he or she files in writing an election not to participate. [Rule 243.]
Subpart O – Reparation; Attorney Fees
§ 502.251 Proof on award of reparation.
If many shipments or points of origin or destination are involved in a proceeding in which reparation is sought (See § 502.63), the Commission will determine in its decision the issues as to violations, injury to complainant, and right to reparation. If complainant is found entitled to reparation, the parties thereafter will be given an opportunity to agree or make proof respecting the shipments and pecuniary amount of reparation due before the order of the Commission awarding reparation is entered. In such cases, freight bills and other exhibits bearing on the details of all shipments, and the amount of reparation on each, need not be produced at the original hearing unless called for or needed to develop other pertinent facts. [Rule 251.]
§ 502.252 Reparation statements.
When the Commission finds that reparation is due, but that the amount cannot be ascertained upon the record before it, the complainant shall immediately prepare a statement in accordance with the approved reparation statement in Exhibit No. 1 to this subpart, showing details of the shipments on which reparation is claimed. This statement shall not include any shipments not covered by the findings of the Commission. Complainant shall forward the statement, together with the paid freight bills on the shipments, or true copies thereof, to the respondent or other person who collected the charges for checking and certification as to accuracy. Statements so prepared and certified shall be filed with the Commission for consideration in determining the amount of reparation due. Disputes concerning the accuracy of amounts may be assigned for conference by the Commission, or in its discretion referred for further hearing. [Rule 252.]
§ 502.253 Interest in reparation proceedings.
Except as to applications for refund or waiver of freight charges under § 502.271 and claims which are settled by agreement of the parties, and absent fraud or misconduct of a party, interest granted on awards of reparation in complaint proceedings instituted under the Shipping Act of 1984 will accrue from the date of injury to the date specified in the Commission order awarding reparation. Compounding will be daily from the date of injury to the date specified in the Commission order awarding reparation. Normally, the date specified within which payment must be made will be fifteen (15) days subsequent to the date of service of the Commission order. Interest shall be computed on the basis of the average monthly secondary market rate on six-month U.S. Treasury bills commencing with the rate for the month that the injury occurred and concluding with the latest available monthly U.S. Treasury bill rate at the date of the Commission order awarding reparation. The monthly secondary market rates on six-month U.S. Treasury bills for the reparation period will be summed up and divided by the number of months for which interest rates are available in the reparation period to determine the average interest rate applicable during the period. [Rule 253.]
§ 502.254 Attorney fees in complaint proceedings.
(a) General. In any complaint proceeding brought under 46 U.S.C. 41301 (sections 11(a)-(b) of the Shipping Act of 1984), the Commission may, upon petition, award the prevailing party reasonable attorney fees.
(b) Definitions.
Attorney fees means the fair market value of the services of any person permitted to appear and practice before the Commission in accordance with subpart B of this part.
Decision means:
(1) An initial decision or dismissal order issued by an administrative law judge;
(2) A final decision issued by a small claims officer; or
(3) A final decision issued by the Commission.
(c) Filing petitions for attorney fees. (1) In order to recover attorney fees, the prevailing party must file a petition within 30 days after a decision becomes final. For purposes of this section, a decision is considered final when the time for seeking judicial review has expired or when a court appeal has terminated.
(2) The prevailing party must file the petition with either:
(i) The administrative law judge or small claims officer, if that official’s decision became administratively final under § 502.227(a)(3), § 502.227(c), § 502.304(g), or § 502.318(a); or
(ii) The Commission, if the Commission reviewed the decision of the administrative law judge or small claims officer under § 502.227, § 502.304, or § 502.318.
(d) Content of petitions. (1) The petition must:
(i) Explain why attorney fees should be awarded in the proceeding;
(ii) Specify the number of hours claimed by each person representing the prevailing party at each identifiable stage of the proceeding; and
(iii) Include supporting evidence of the reasonableness of the hours claimed and the customary rates charged by attorneys and associated legal representatives in the community where the person practices.
(2) The petition may request additional compensation, but any such request must be supported by evidence that the customary rates for the hours reasonably expended on the case would result in an unreasonably low fee award.
(e) Replies to petitions. The opposing party may file a reply to the petition within 20 days of the service date of the petition. The reply may address the reasonableness of any aspect of the prevailing party’s claim and may suggest adjustments to the claim under the criteria stated in paragraph (d) of this section.
(f) Rulings on petitions. (1) Upon consideration of a petition and any reply thereto, the Commission, administrative law judge, or small claims officer will issue an order granting or denying the petition.
(i) If the order awards the prevailing party attorney fees, the order will state the total amount of attorney fees awarded, specify the compensable hours and appropriate rate of compensation, and explain the basis for any additional adjustments.
(ii) If the order denies the prevailing party attorney fees, the order will explain the reasons for the denial.
(2) The Commission, administrative law judge, or small claims officer may adopt a stipulated settlement of attorney fees.
(g) Timing of rulings. An order granting or denying a petition for attorney fees will be served within 60 days of the date of the filing of the reply to the petition or expiration of the reply period, except that in cases involving a substantial dispute of facts critical to the determination of an award, the Commission, administrative law judge, or small claims officer may hold a hearing on such issues and extend the time for issuing an order by an additional 30 days.
(h) Appealing rulings by administrative law judge or small claims officer. The relevant rules governing appeal and Commission review of decisions by administrative law judges (§§ 502.227; 502.318) and small claims officers (§ 502.304) apply to orders issued by those officers under this section. [Rule 254.]
Exhibit No. 1 to Subpart O [§ 502.252] of Part 502 – Reparation Statement To Be Filed Pursuant to Rule 252
Claim of ____________________ under the decision of the Federal Maritime Commission in Docket No. ____________________.
| Date of B/L | Date of delivery or tender of delivery | Date charges paid | Vessel | Voyage No. | Port of origin | Destination port | Route | Commodity | Weight or measurement | As charged | Should be | Reparation | Charges paid by * | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Rate | Amount | Rate | Amount | ||||||||||||
*Here insert name of person paying charges in the first instance, and state whether as consignor, consignee, or in what other capacity.
| Total amount of reparation $________________________________________. | |
| The undersigned hereby certifies that this statement has been checked against the records of this company and found correct. | |
| Date ________________________________________. | |
| ________________________________________ Steamship Company, Collecting Carrier Respondent, | |
| By ________________________________________, Auditor | |
| By ________________________________________, | |
| ________________________________________, | |
| (address and date) |
Subpart P – Reconsideration of Proceedings
§ 502.261 Petitions for reconsideration and stay.
(a) Within thirty (30) days after issuance of a final decision or order by the Commission, any party may file a petition for reconsideration. Such petition shall be limited to 25 pages in length and shall be served in conformity with the requirements of subpart H of this part. A petition will be subject to summary rejection unless it:
(1) Specifies that there has been a change in material fact or in applicable law, which change has occurred after issuance of the decision or order;
(2) Identifies a substantive error in material fact contained in the decision or order; or
(3) Addresses a finding, conclusion or other matter upon which the party has not previously had the opportunity to comment or which was not addressed in the briefs or arguments of any party. Petitions which merely elaborate upon or repeat arguments made prior to the decision or order will not be received. A petition shall be verified if verification of the original pleading is required and shall not operate as a stay of any rule or order of the Commission.
(b) A petition for stay of a Commission order which directs the discontinuance of statutory violations will not be received.
(c) The provisions of this section are not applicable to decisions issued pursuant to subpart S of this part. [Rule 261.]
§ 502.262 Reply to petition for reconsideration or stay.
Any party may file a reply in opposition to a petition for reconsideration or stay within fifteen (15) days after the date of service of the petition in accordance with § 502.74. The reply shall be limited to 25 pages in length and shall be served in conformity with subpart H of this part. [Rule 262.]
Subpart Q – Refund or Waiver of Freight Charges
§ 502.271 Special docket application for permission to refund or waive freight charges.
(a)(1) A common carrier or a shipper may file a special docket application seeking permission for a common carrier or conference to refund or waive collection of a portion of freight charges if there is:
(i) An error in the tariff;
(ii) An error in failing to publish a new tariff; or
(iii) An error in quoting a tariff .
(2) Such refund or waiver must not result in discrimination among shippers, ports, or carriers.
(b) Such application must be filed within one hundred eighty (180) days from the date of sailing of the vessel from the port at which the cargo was loaded. An application is filed when it is placed in the mail, delivered to a courier, or, if delivered by another method, when it is received by the Commission. Filings by mail or courier must include a certification as to date of mailing or delivery to the courier.
(c) Prior to submission of the application for a refund for an error in a tariff or a failure to publish a new tariff, the carrier or conference must publish a new tariff which sets forth the rate on which refund or waiver would be based.
(d) Such application must be in accordance with Exhibit 1 to this Subpart and must also comply with the following requirements:
(1) Applications must be submitted to the Office of the Secretary, Federal Maritime Commission, Washington, DC 20573-0001.
(2) Applications must be submitted in an original and one (1) copy.
(3) Applications must be sworn to before a notary public or otherwise verified in accordance with § 502.112.
(4) When a rate published in a conference tariff is involved, the carrier or shipper must serve a copy of the application on the conference and so certify in accordance with § 502.117 to that service in the application. A shipper must also make a similar service and certification with respect to the common carrier.
(5) Applications must be accompanied by remittance of a $115 filing fee.
(e) Any application which does not furnish the information required by this Subpart may be returned to the applicant by the Secretary without prejudice to resubmission within the 180-day limitation period.
(f)(1) The Secretary in his discretion shall either forward an application to the Office of Consumer Affairs and Dispute Resolution Services, for assignment to a Special Dockets Officer, or assign an application to the Office of Administrative Law Judges. Authority to issue decisions under this subpart is delegated to the assigned Special Dockets Officer or Administrative Law Judge.
(2) Applicants will be notified as to the assignment of a deciding official, and the assignment of a special docket number. Formal proceedings as described in other rules of this part need not be conducted. The deciding official may, in his or her discretion, require the submission of additional information.
(g) The deciding official shall issue a decision which, pursuant to § 501.21 of this chapter, shall become final ten (10) days after service of such decision, unless the Commission in its discretion chooses to review such decision within that time, or the applicant chooses to file exceptions to such decision within that time. [Rule 271.]
Exhibit No. 1 to Subpart Q [§ 502.271(d )] of Part 502 – Application for Refund or Waiver of Freight Charges Due to Tariff or Quoting Error
Federal Maritime Commission Special Docket No. __________ [leave blank].
Amount of Freight Charges to be refunded or waived:
Application of (Name of carrier or shipper) for the benefit of (Name of person who paid or is responsible for payment of freight charges).
1. Shipment(s). Here fully describe:
(a) Commodity (according to tariff description).
(b) Number of shipments.
(c) Weight or measurement, container size, and number of containers of individual shipment, as well as all shipments.
(d)(1) Date(s) of receipt of shipment(s) by the carrier;
(2) Date(s) of sailing(s) (furnish supporting evidence).
(e) Shipper and place of origin.
(f) Consignee, place of destination and routing of shipment(s).
(g) Name of carrier and date shown on bill of lading (furnish legible copies of bill(s) of lading).
(h) Names of participating ocean carrier(s).
(i) Name(s) of vessel(s) involved in carriage.
(j) Amount of freight charges actually collected (furnish legible copies of rated bill(s) of lading or freight bill(s), as appropriate) broken down (i) per shipment, (ii) in the aggregate, (iii) by whom paid, (iv) who is responsible for payment if different, and (v) date(s) of collection.
(k) Rate and tariff commodity description applicable at time of shipment (furnish legible copies of tariff materials).
(l) Rate and commodity description sought to be applied (furnish legible copies of applicable tariff materials).
(m)(1) Amount of applicable freight charges, per shipment and in the aggregate;
(2) Amount of freight charges at rate sought to be applied, per shipment and in the aggregate.
(n) Amount of freight charges sought to be (refunded) (waived), per shipment and in the aggregate.
2. Furnish docket numbers of other special docket applications or decided or pending formal proceedings involving the same rate situations.
3. Fully explain the basis for the application, i.e., the error, failure to publish, or misquote, showing why the application should be granted. Furnish affidavits, if appropriate, and legible copies of all supporting documents. If the error is due to failure to publish a tariff, specify the date when the carrier and/or conference intended or agreed to publish a new tariff. If the application is based on a misquote, the application must include the affidavit of the person who made the misquote describing the circumstances surrounding such misquote along with any other supporting documentary evidence available.
4. Furnish any information or evidence as to whether granting the application may result in discrimination among shippers, ports or carriers. List any shipments of other shippers of the same commodity which (i) moved via the carrier(s) or conference involved in this application during the period of time beginning on the date the intended rate would have become effective and ending on the day before the effective date of the conforming tariff; (ii) moved on the same voyage(s) of the vessel(s) carrying the shipment(s) described in No. 1, above; or (iii), in the case of a misquote, moved between the date of receipt of shipment(s) described in No. 1 above, and the date(s) of sailing(s).
(Here set forth Name of Applicant, Signature of Authorized Person, Typed or Printed Name of Person, Title of Person and Date)
State of , County of . ss:
I,______ , on oath declare that I am ______ of the above-named applicant, that I have read this application and know its contents, and that they are true. Subscribed and sworn to before me, a notary public in and for the State of ____________ , County of ____________, this ______ day of ______ .
Notary Public
My Commission expires.
I hereby certify that I have this day served the foregoing document upon the (insert the conference name if a conference tariff is involved; or the name of the carrier if the applicant is a shipper) by delivering a copy (insert means by which copy delivered).
Dated in (insert city, county, state) this ______ day of ______. (signature)
For:
I certify that the date shown below is the date of mailing (or date of delivery to courier) of the original and one (1) copy of this application to the Secretary, Federal Maritime Commission, Washington, DC, 20573-0001.
Dated at ______, this ______ day of ______ .
(Signature) .
For.
Subpart R – Nonadjudicatory Investigations
§ 502.281 Investigational policy.
The Commission has extensive regulatory duties under the various acts it is charged with administering. The conduct of investigations is essential to the proper exercise of the Commission’s regulatory duties. It is the purpose of this subpart to establish procedures for the conduct of such investigations which will insure protection of the public interest in the proper and effective administration of the law. The Commission encourages voluntary cooperation in its investigations where such can be effected without delay or without prejudice to the public interest. The Commission may, in any matter under investigation, invoke any or all of the compulsory processes authorized by law. [Rule 281.]
§ 502.282 Initiation of investigations.
Commission inquiries and nonadjudicatory investigations are originated by the Commission upon its own motion when in its discretion the Commission determines that information is required for the purposes of rulemaking or is necessary or helpful in the determination of its policies or the carrying out of its duties, including whether to institute formal proceedings directed toward determining whether any of the laws which the Commission administers have been violated. [Rule 282.]
§ 502.283 Order of investigation.
When the Commission has determined that an investigation is necessary, an Order of Investigation shall be issued. [Rule 283.]
§ 502.284 By whom conducted.
Investigations are conducted by Commission representatives designated and duly authorized for the purpose. (See § 502.25.) Such representatives are authorized to exercise the duties of their office in accordance with the laws of the United States and the regulations of the Commission, including the resort to all compulsory processes authorized by law, and the administration of oaths and affirmances in any matters under investigation by the Commission. [Rule 284.]
§ 502.285 Investigational hearings.
(a) Investigational hearings, as distinguished from hearings in adjudicatory proceedings, may be conducted in the course of any investigation undertaken by the Commission, including inquiries initiated for the purpose of determining whether or not a person is complying with an order of the Commission.
(b) Investigational hearings may be held before the Commission, one or more of its members, or a duly designated representative, for the purpose of hearing the testimony of witnesses and receiving documents and other data relating to any subject under investigation. Such hearings shall be stenographically reported and a transcript thereof shall be made a part of the record of investigation. [Rule 285.]
§ 502.286 Compulsory process.
The Commission, or its designated representative may issue orders or subpoenas directing the person named therein to appear before a designated representative at a designated time and place to testify or to produce documentary evidence relating to any matter under investigation, or both. Such orders and subpoenas shall be served in the manner provided in § 502.134. [Rule 286.]
§ 502.287 Depositions.
The Commission, or its duly authorized representative, may order testimony to be taken by deposition in any investigation at any stage of such investigation. Such depositions may be taken before any person designated by the Commission having the power to administer oaths. Such testimony shall be reduced to writing by the person taking the deposition or under his or her direction, and shall then be subscribed by the deponent. Any person may be compelled to appear and be deposed and to produce evidence in the same manner as witnesses may be compelled to appear and testify and produce documentary evidence as provided in § 502.131. [Rule 287.]
§ 502.288 Reports.
The Commission may issue an order requiring a person to file a report or answers in writing to specific questions relating to any matter under investigation. [Rule 288.]
§ 502.289 Noncompliance with investigational process.
In case of failure to comply with Commission investigational processes, appropriate action may be initiated by the Commission, including actions for enforcement by the Commission or the Attorney General and forfeiture of penalties or criminal actions by the Attorney General. [Rule 289.]
§ 502.290 Rights of witness.
Any person required to testify or to submit documentary evidence shall be entitled to retain or, on payment of lawfully prescribed cost, procure a copy of any document produced by such person and of his or her own testimony as stenographically reported or, in the depositions, as reduced to writing by or under the direction of the person taking the deposition. Any party compelled to testify or to produce documentary evidence may be accompanied and advised by counsel, but counsel may not, as a matter or right, otherwise participate in the investigation. [Rule 290.]
§ 502.291 Nonpublic proceedings.
Unless otherwise ordered by the Commission, all investigatory proceedings shall be nonpublic. [Rule 291.]
Subpart S – Informal Procedure for Adjudication of Small Claims
§ 502.301 Statement of policy.
(a) Section 11(a) of the Shipping Act of 1984 (46 U.S.C. 41301(a)) permits any person to file a complaint with the Commission claiming a violation occurring in connection with the foreign commerce of the United States and to seek reparation for any injury caused by that violation.
(b) With the consent of both parties, claims filed under this subpart in the amount of $50,000 or less will be decided by a Small Claims Officer appointed by the Federal Maritime Commission’s Chief Administrative Law Judge, without the necessity of formal proceedings under the rules of this part. Authority to issue decisions under this subpart is delegated to the appointed Small Claims Officer.
(c) Determination of claims under this subpart shall be administratively final and conclusive. [Rule 301.]
§ 502.302 Limitations of actions.
(a) Claims alleging violations of the Shipping Act of 1984 must be filed within three years from the time the cause of action accrues.
(b) A claim is deemed filed on the date it is received by the Commission. [Rule 302.]
§ 502.303 [Reserved]
§ 502.304 Procedure and filing fee.
(a) A sworn claim under this subpart shall be filed in the form prescribed in Exhibit No. 1 to this subpart. Three (3) copies of this claim must be filed, together with the same number of copies of such supporting documents as may be deemed necessary to establish the claim. Copies of tariff pages need not be filed; reference to such tariffs or to pertinent parts thereof will be sufficient. Supporting documents may consist of affidavits, correspondence, bills of lading, paid freight bills, export declarations, dock or wharf receipts, or of such other documents as, in the judgment of the claimant, tend to establish the claim. The Small Claims Officer may, if deemed necessary, request additional documents or information from claimants. Claimant may attach a memorandum, brief or other document containing discussion, argument, or legal authority in support of its claim. If a claim filed under this subpart involves any shipment which has been the subject of a previous claim filed with the Commission, formally or informally, full reference to such previous claim must be given.
(b) Claims under this subpart shall be addressed to the Office of the Secretary, Federal Maritime Commission, Washington, DC 20573. Such claims must be accompanied by remittance of a $112 filing fee.
(c) Each claim under this subpart will be acknowledged with a reference to the Informal Docket Number assigned. The number shall consist of a numeral(s) followed by capital “I” in parentheses. All further correspondence pertaining to such claims must refer to the assigned Informal Docket Number. If the documents filed fail to establish a claim for which relief may be granted, the parties affected will be so notified in writing. The claimant may thereafter, but only if the period of limitation has not run, resubmit its claim with such additional proof as may be necessary to establish the claim. In the event a complaint has been amended because it failed to state a claim upon which relief may be granted, it will be considered as a new complaint.
(d) A copy of each claim filed under this subpart, with attachments, shall be served by the Secretary on the respondent named in the claim.
(e) Within twenty-five (25) days from the date of service of the claim, the respondent shall serve upon the claimant and file with the Commission its response to the claim, together with an indication, in the form prescribed in Exhibit No. 2 to this subpart, as to whether the informal procedure provided in this subpart is consented to. Failure of the respondent to indicate refusal or consent in its response will be conclusively deemed to indicate such consent. The response shall consist of documents, arguments, legal authorities, or precedents, or any other matters considered by the respondent to be a defense to the claim. The Small Claims Officer may request the respondent to furnish such further documents or information as deemed necessary, or he or she may require the claimant to reply to the defenses raised by the respondent.
(f) If the respondent refuses to consent to the claim being informally adjudicated pursuant to this subpart, the claim will be considered a complaint under § 502.311 and will be adjudicated under subpart T of this part.
(g) Both parties shall promptly be served with the Small Claims Officer’s decision which shall state the basis upon which the decision was made. Where appropriate, the Small Claims Officer may require that the respondent publish notice in its tariff of the substance of the decision. This decision shall be final, unless, within thirty (30) days from the date of service of the decision, the Commission exercises its discretionary right to review the decision. The Commission shall not, on its own initiative, review any decision or order of dismissal unless such review is requested by an individual Commissioner. Any such request must be transmitted to the Secretary within thirty (30) days after date of service of the decision or order. Such request shall be sufficient to bring the matter before the Commission for review.
(h) Within thirty (30) days after service of a final decision by a Small Claims Officer, any party may file a petition for reconsideration. Such petition shall be directed to the Small Claims Officer and shall act as a stay of the review period prescribed in paragraph (g) of this section. A petition will be subject to summary rejection unless it: (1) Specifies that there has been a change in material fact or in applicable law, which change has occurred after issuance of the decision or order; (2) identifies a substantive error in material fact contained in the decision or order; (3) addresses a material matter in the Small Claims Officer’s decision upon which the petitioner has not previously had the opportunity to comment. Petitions which merely elaborate upon or repeat arguments made prior to the decision or order will not be received. Upon issuance of a decision or order on reconsideration by the Small Claims Officer, the review period prescribed in paragraph (g) of this section will recommence. [Rule 304.]
§ 502.305 Applicability of other rules of this part.
(a) Except otherwise specifically provided in this subpart or in paragraph (b) of this section, the sections in subparts A through Q, inclusive, of this part do not apply to situations covered by this subpart.
(b) The following sections in subparts A through Q of this part apply to situations covered by this subpart: §§ 502.2(a) (Requirement for filing); 502.2(f)(1) (Email transmission of filings); 502.2(i) (Continuing obligation to provide contact information); 502.7 (Documents in foreign languages); 502.21 through 502.23 (Appearance, Authority for representation, Notice of appearance; substitution and withdrawal of representative); 502.43 (Substitution of parties); 502.101 (Computation); 502.113 (Service of private party complaints); 502.117 (Certificate of service); 502.253 (Interest in reparation proceedings); and 502.254 (Attorney fees in complaint proceedings). [Rule 305.]
Exhibit No. 1 to Subpart S [§ 502.304(a )] of Part 502 – Small Claim Form for Informal Adjudication and Information Checklist
Informal Docket No.______
vs.
I. The claimant is [state in this paragraph whether claimant is an association, corporation, firm or partnership, and if a firm or partnership, the names of the individuals composing the same. State the nature and principal place of business.]
II. The respondent named above is [state in this paragraph whether respondent is an association, corporation, firm or partnership, and if a firm or partnership, the names of the individuals composing the same. State the nature and principal place of business.]
III. That [state in this and subsequent paragraphs to be lettered A, B, etc., the matters that gave rise to the claim. Name specifically each rate, charge, classification, regulation or practice which is challenged. Refer to tariffs, tariff items or rules, or agreement numbers, if known. If claim is based on the fact that a firm is a common carrier, state where it is engaged in transportation by water and which statute(s) it is subject to under the jurisdiction of the Federal Maritime Commission].
IV. If claim is for overcharges, state commodity, weight and cube, origin, destination, bill of lading description, bill of lading number and date, rate and/or charges assessed, date of delivery, date of payment, by whom paid, rate or charge claimed to be correct and amount claimed as overcharges. [Specify tariff item for rate or charge claimed to be proper].
V. State section of statute claimed to have been violated. (Not required if claim is for overcharges).
VI. State how claimant was injured and amount of damages requested.
VII. The undersigned authorizes the Small Claims Officer to determine the above-stated claim pursuant to the informal procedure outlined in subpart S (46 CFR 502.301-502.305) of the Commission’s informal procedure for adjudication of small claims subject to discretionary Commission review.
Attach memorandum or brief in support of claim. Also attach bill of lading, copies of correspondence or other documents in support of claim.
State of ______, County of ______, ss: ______, being first duly sworn on oath deposes and says that he or she is
Informal Docket procedures are limited to claims of $50,000 or less and are appropriate only in instances when an evidentiary hearing on disputed facts is not necessary. Where, however, a respondent elects not to consent to the informal procedures [See Exhibit No. 2 to subpart S], the claim will be adjudicated by an administrative law judge under subpart T of Part 502.
Under the Shipping Act of 1984 [for foreign commerce], the claim must be filed within three (3) years from the time the cause of action accrues and may be brought against any person alleged to have violated the 1984 Act to the injury of claimant.
A violation of a specific section of a particular shipping statute must be alleged.
The format of Exhibit No. 1 must be followed and a verification must be included. (See §§ 502.21-502.32, 502.112, and 502.304.) An original and two (2) copies of the claim and all attachments, including a brief in support of the claim, must be submitted.
Exhibit No. 2 to Subpart S [§ 502.304(e )] of Part 502 – Respondent’s Consent Form for Informal Adjudication
I authorize the Small Claims Officer to determine the above-numbered claim in accordance with subpart S (46 CFR 502) of the Commission’s informal procedure for adjudication of small claims subject to discretionary Commission Review.
State of ______________________, County of ____________________, ss: ____________, being first duly sworn on oath deposes and says that he or she is __________________, (Title or Position) and is the person who signed the foregoing and agrees without qualification to its truth.
Subscribed and sworn to before me, a notary public in and for the State of ________________, County of ________________, this ____________ day of ____________________, 19____.
Subpart T – Formal Procedure for Adjudication of Small Claims
§ 502.311 Applicability.
In the event the respondent elects not to consent to determination of the claim under subpart S of this part, it shall be adjudicated by the administrative law judges of the Commission under procedures set forth in this subpart, if timely filed under § 502.302. The previously assigned Docket Number shall be used except that it shall now be followed by capital “F” instead of “I” in parentheses (See § 502.304(c)). The complaint shall consist of the documents submitted by the claimant under subpart S of this part. [Rule 311.]
§ 502.312 Answer to complaint.
The respondent shall file with the Commission an answer within twenty-five (25) days of service of the complaint and shall serve a copy of said answer upon complainant. The answer shall admit or deny each matter set forth in the complaint. Matters not specifically denied will be deemed admitted. Where matters are urged in defense, the answer shall be accompanied by appropriate affidavits, other documents, and memoranda. [Rule 312.]
§ 502.313 Reply of complainant.
Complainant may, within twenty (20) days of service of the answer filed by respondent, file with the Commission and serve upon the respondent a reply memorandum accompanied by appropriate affidavits and supporting documents. [Rule 313.]
§ 502.314 Additional information.
The administrative law judge may require the submission of additional affidavits, documents, or memoranda from complainant or respondent. [Rule 314.]
§ 502.315 Request for oral hearing.
In the usual course of disposition of complaints filed under this subpart, no oral hearing will be held, but, the administrative law judge, in his or her discretion, may order such hearing. A request for oral hearing may be incorporated in the answer or in complainant’s reply to the answer. Requests for oral hearing will not be entertained unless they set forth in detail the reasons why the filing of affidavits or other documents will not permit the fair and expeditious disposition of the claim, and the precise nature of the facts sought to be proved at such oral hearing. The administrative law judge shall rule upon a request for oral hearing within ten (10) days of its receipt. In the event an oral hearing is ordered, it will be held in accordance with the rules applicable to other formal proceedings, as set forth in subparts A through Q of this part. [Rule 315.]
§ 502.316 Intervention.
Intervention will ordinarily not be permitted. [Rule 316.]
§ 502.317 Oral argument.
No oral argument will be held unless otherwise directed by the administrative law judge. [Rule 317.]
§ 502.318 Decision.
(a) The decision of the administrative law judge shall be final, unless, within twenty-two (22) days from the date of service of the decision, either party requests review of the decision by the Commission, asserting as grounds therefor that a material finding of fact or a necessary legal conclusion is erroneous or that prejudicial error has occurred, or unless, within thirty (30) days from the date of service of the decision, the Commission exercises its discretionary right to review the decision. The Commission shall not, on its own initiative, review any decision or order of dismissal unless such review is requested by an individual Commissioner. Any such request must be transmitted to the Secretary within thirty (30) days after date of service of the decision or order. Such request shall be sufficient to bring the matter before the Commission for review. [Rule 318.]
(b) Attorney fees may be awarded to the prevailing party in accordance with § 502.254. [Rule 318.]
§ 502.319 Date of service and computation of time.
(a) The date of service of documents served by the Commission will be the date shown in the service stamp placed on the first page of the document. The date of service of documents served by parties will be the date when the document served is transmitted by email, deposited in the United States mail, delivered to a courier, or delivered in person. If service is made by more than one method, for example email and also U.S. mail service, the date of service will be the earlier of the two actions. In computing the time from such dates, the provisions of § 502.101 shall apply. [Rule 319.]
(b) In computing any time period prescribed or allowed under the rules in this Part, the period begins on the day following the act, event, or default that triggers the period and includes the last day of the time period. If the last day is a Saturday, Sunday, or federal holiday, the time period continues to the next day that is not a Saturday, Sunday, or federal holiday. If the presiding officer prescribes or allows an act, event, or default by reference to a specific date, that date will govern. If the Commission’s offices are inaccessible on the last day for a filing, the time for filing is extended to the first accessible day that is not a Saturday, Sunday, or federal holiday.
§ 502.320 Service.
All claims, resubmitted claims, petitions to intervene and rulings thereon, notices of oral hearings, notices of oral arguments (if necessary), decisions of the administrative law judge, notices of review, and Commission decisions shall be served by the administrative law judge or the Commission. All other pleadings, documents and filings shall, when tendered to the Commission, evidence service upon all parties to the proceeding. Such certificate shall be in substantially the following form:
I hereby certify that I have this day served the foregoing document upon all parties of record in this proceeding by [mailing, delivering to courier, or delivering in person], a copy to each such person in sufficient time to reach such person on the date the document is due to be filed with the Commission.
Dated at ____________________ this ________________ day of __________________, 19____.
§ 502.321 Applicability of other rules of this part.
(a) Except otherwise specifically provided in this subpart or in paragraph (b) of this section, the sections in subparts A through Q, inclusive, of this part do not apply to situations covered by this subpart.
(b) The following sections in subparts A through Q apply to situations covered by this subpart: §§ 502.2(a) (Requirement for filing); 502.2(f)(1) (Email transmission of filings); 502.2(i) (Continuing obligation to provide contact information); 502.7 (Documents in foreign languages); 502.21-502.23 (Appearance, Authority for representation, Notice of appearance; substitution and withdrawal of representative); 502.43 (Substitution of parties); 502.253 (Interest in reparation proceedings); and 502.254 (Attorney fees in complaint proceedings). [Rule 321.]
Subpart U – Alternative Dispute Resolution
§ 502.401 Policy.
It is the policy of the Federal Maritime Commission to use alternative means of dispute resolution to the fullest extent compatible with the law and the agency’s mission and resources. The Commission will consider using ADR in all areas including workplace issues, formal and informal adjudication, issuance of regulations, enforcement and compliance, issuing and revoking licenses and permits, contract award and administration, litigation brought by or against the Commission, and other interactions with the public and the regulated community. The Commission will provide learning and development opportunities for its employees to develop their ability to use conflict resolution skills, instill knowledge of the theory and practice of ADR, and to facilitate appropriate use of ADR. To this end, all parties to matters under this part are required to consider use of a wide range of alternative means to resolve disputes at an early stage. Parties are encouraged to pursue use of alternative means through the Commission’s Office of Consumer Affairs and Dispute Resolution Services in lieu of or prior to initiating a Commission proceeding. All employees and persons who interact with the Commission are encouraged to identify opportunities for collaborative, consensual approaches to dispute resolution or rulemaking.
§ 502.402 Definitions.
(a) Alternative means of dispute resolution means any procedure that is used to resolve issues in controversy, including, but not limited to, conciliation, facilitation, mediation, factfinding, minitrials, arbitration, and use of ombuds, or any combination thereof;
(b) Award means any decision by an arbitrator resolving the issues in controversy;
(c) Dispute resolution communication means any oral or written communication prepared for the purposes of a dispute resolution proceeding, including any memoranda, notes or work product of the neutral, parties or nonparty participant; except that a written agreement to enter into a dispute resolution proceeding, or final written agreement or arbitral award reached as a result of a dispute resolution proceeding, is not a dispute resolution communication;
(d) Dispute resolution proceeding means any process in which an alternative means of dispute resolution is used to resolve an issue in controversy in which a neutral is appointed and specified parties participate;
(e) In confidence means, with respect to information, that the information is provided –
(1) With the expressed intent of the source that it not be disclosed; or
(2) Under circumstances that would create the reasonable expectation on behalf of the source that the information will not be disclosed;
(f) Issue in controversy means an issue which is material to a decision concerning a program of the Commission, and with which there is disagreement –
(1) Between the Commission and persons who would be substantially affected by the decision; or
(2) Between persons who would be substantially affected by the decision;
(g) Neutral means an individual who, with respect to an issue in controversy, functions specifically to aid the parties in resolving the controversy; and
(h) Person has the same meaning as in 5 U.S.C. 551(2).
(a) The Commission intends to consider using a dispute resolution proceeding for the resolution of an issue in controversy, if the parties agree to a dispute resolution proceeding.
(b) The Commission will consider not using a dispute resolution proceeding if –
(1) A definitive or authoritative resolution of the matter is required for precedential value, and such a proceeding is not likely to be accepted generally as an authoritative precedent;
(2) The matter involves or may bear upon significant questions of Government policy that require additional procedures before a final resolution may be made, and such a proceeding would not likely serve to develop a recommended policy for the agency;
(3) Maintaining established policies is of special importance, so that variations among individual decisions are not increased and such a proceeding would not likely reach consistent results among individual decisions;
(4) The matter significantly affects persons or organizations who are not parties to the proceeding;
(5) A full public record of the proceeding is important, and a dispute resolution proceeding cannot provide such a record; and
(6) The Commission must maintain continuing jurisdiction over the matter with authority to alter the disposition of the matter in the light of changed circumstances, and a dispute resolution proceeding would interfere with the Commission’s fulfilling that requirement.
(c) Alternative means of dispute resolution authorized under this subpart are voluntary procedures which supplement rather than limit other available agency dispute resolution techniques.
§ 502.404 Neutrals.
(a) A neutral may be a permanent or temporary officer or employee of the Federal Government or any other individual who is acceptable to the parties to a dispute resolution proceeding. A neutral shall have no official, financial, or personal conflict of interest with respect to the issues in controversy, unless such interest is fully disclosed in writing to all parties and all parties agree that the neutral may serve.
(b) A neutral who serves as a conciliator, facilitator, or mediator serves at the will of the parties.
(c) With consent of the parties, the Federal Maritime Commission Dispute Resolution Specialist will seek to provide a neutral in dispute resolution proceedings through Commission staff, arrangements with other agencies, or on a contractual basis.
(d) Fees. Should the parties choose a neutral other than an official or employee of the Commission, fees and expenses shall be borne by the parties as the parties shall agree.
§ 502.405 Confidentiality.
(a) Except as provided in paragraphs (d) and (e) of this section, a neutral in a dispute resolution proceeding shall not voluntarily disclose or through discovery or compulsory process be required to disclose any dispute resolution communication or any communication provided in confidence to the neutral, unless –
(1) All parties to the dispute resolution proceeding and the neutral consent in writing, and, if the dispute resolution communication was provided by a nonparty participant, that participant also consents in writing;
(2) The dispute resolution communication has already been made public;
(3) The dispute resolution communication is required by statute to be made public, but a neutral should make such communication public only if no other person is reasonably available to disclose the communication; or
(4) A court determines that such testimony or disclosure is necessary to –
(i) Prevent a manifest injustice;
(ii) Help establish a violation of law; or
(iii) Prevent harm to the public health or safety, of sufficient magnitude in the particular case to outweigh the integrity of dispute resolution proceedings in general by reducing the confidence of parties in future cases that their communications will remain confidential.
(b) A party to a dispute resolution proceeding shall not voluntarily disclose or through discovery or compulsory process be required to disclose any dispute resolution communication, unless –
(1) The communication was prepared by the party seeking disclosure;
(2) All parties to the dispute resolution proceeding consent in writing;
(3) The dispute resolution communication has already been made public;
(4) The dispute resolution communication is required by statute to be made public;
(5) A court determines that such testimony or disclosure is necessary to –
(i) Prevent a manifest injustice;
(ii) Help establish a violation of law; or
(iii) Prevent harm to the public health and safety, of sufficient magnitude in the particular case to outweigh the integrity of dispute resolution proceedings in general by reducing the confidence of parties in future cases that their communications will remain confidential;
(6) The dispute resolution communication is relevant to determining the existence or meaning of an agreement or award that resulted from the dispute resolution proceeding or to the enforcement of such an agreement or award; or
(7) Except for dispute resolution communications generated by the neutral, the dispute resolution communication was provided to or was available to all parties to the dispute resolution proceeding.
(c) Any dispute resolution communication that is disclosed in violation of paragraph (a) or (b) of this section shall not be admissible in any proceeding relating to the issues in controversy with respect to which the communication was made.
(d) (1) The parties may agree between or amongst themselves to alternative confidential procedures for disclosures by a neutral, and shall inform the neutral before commencement of the dispute resolution proceeding of any modifications to the provisions of paragraph (a) of this section that will govern the confidentiality of the dispute resolution proceeding, in accordance with the guidance on confidentiality in federal proceedings published by the Interagency ADR Working Group and adopted by the ADR Council (http://www.financenet.gov/financenet/fed/iadrwg/confid.pdf). If the parties do not so inform the neutral, paragraph (a) of this section shall apply.
(2) To qualify for the exemption under paragraph (j) of this section, an alternative confidential procedure under this subsection may not provide for less disclosure than the confidential procedures otherwise provided under this section.
(e) If a demand for disclosure, by way of discovery request or other legal process, is made upon a neutral regarding a dispute resolution communication, the neutral shall make reasonable efforts to notify the parties and any affected nonparty participants of the demand. Any party or affected nonparty participant who receives such notice and within 15 calendar days does not offer to defend a refusal of the neutral to disclose the requested information shall have waived any objection to such disclosure.
(f) Nothing in this section shall prevent the discovery or admissibility of any evidence that is otherwise discoverable, merely because the evidence was presented in the course of a dispute resolution proceeding.
(g) Paragraphs (a) and (b) of this section shall have no effect on the information and data that are necessary to document an agreement reached or order issued pursuant to a dispute resolution proceeding.
(h) Paragraphs (a) and (b) of this section shall not prevent the gathering of information for research or educational purposes, in cooperation with other agencies, governmental entities, or dispute resolution programs, so long as the parties and the specific issues in controversy are not identifiable.
(i) Paragraphs (a) and (b) of this section shall not prevent use of a dispute resolution communication to resolve a dispute between the neutral in a dispute resolution proceeding and a party to or participant in such proceeding, so long as such dispute resolution communication is disclosed only to the extent necessary to resolve such dispute.
(j) A dispute resolution communication which is between a neutral and a party and which may not be disclosed under this section shall also be exempt from disclosure under 5 U.S.C. 552(b)(3).
§ 502.406 Arbitration.
(a)(1) Arbitration may be used as an alternative means of dispute resolution whenever all parties consent, except that arbitration may not be used when the Commission or one of its components is a party. Consent may be obtained either before or after an issue in controversy has arisen. A party may agree to –
(i) Submit only certain issues in controversy to arbitration; or
(ii) Arbitration on the condition that the award must be within a range of possible outcomes.
(2) The arbitration agreement that sets forth the subject matter submitted to the arbitrator shall be in writing. Each such arbitration agreement shall specify a maximum award that may be issued by the arbitrator and may specify other conditions limiting the range of possible outcomes.
(b) With the concurrence of the Federal Maritime Commission Dispute Resolution Specialist, binding arbitration may be used to resolve any and all disputes that could be the subject of a Commission administrative proceeding before an Administrative Law Judge. The Federal Maritime Commission Dispute Resolution Specialist may withhold such concurrence after considering the factors specified in § 502.403, should the Commission’s General Counsel object to use of binding arbitration.
(c)(1) The Federal Maritime Commission Dispute Resolution Specialist will appoint an arbitrator of the parties’ choosing for an arbitration proceeding.
(2) A Commission officer or employee selected as an arbitrator by the parties and appointed by the Federal Maritime Commission Dispute Resolution Specialist shall have authority to settle an issue in controversy through binding arbitration pursuant to the arbitration agreement; provided, however, that decisions by arbitrators shall not have precedential value with respect to decisions by Administrative Law Judges or the Commission. Administrative Law Judges may be appointed as arbitrators with the concurrence of the Chief Administrative Law Judge.
(d) The arbitrator shall be a neutral who meets the criteria of 5 U.S.C. 573.
§ 502.407 Authority of the arbitrator.
An arbitrator to whom a dispute is referred may –
(a) Regulate the course of and conduct arbitral hearings;
(b) Administer oaths and affirmations;
(c) Compel the attendance of witnesses and production of evidence at the hearing under the provisions of 9 U.S.C. 7 only to the extent the Commission is otherwise authorized by law to do so; and
(d) Make awards.
§ 502.408 Conduct of arbitration proceedings.
(a) The arbitrator shall set a time and place for the hearing on the dispute and shall notify the parties not less than seven (7) days before the hearing.
(b) Any party wishing a record of the hearing shall –
(1) Be responsible for the preparation of such record;
(2) Notify the other parties and the arbitrator of the preparation of such record;
(3) Furnish copies to all identified parties and the arbitrator; and
(4) Pay all costs for such record, unless the parties agree otherwise or the arbitrator determines that the costs should be apportioned.
(c)(1) The parties to the arbitration are entitled to be heard, to present evidence material to the controversy, and to cross-examine witnesses appearing at the hearing.
(2) The arbitrator may, with the consent of the parties, conduct all or part of the hearing by telephone, television, computer, or other electronic means, if each party has an opportunity to participate.
(3) The hearing shall be conducted expeditiously and in an informal manner.
(4) The arbitrator may receive any oral or documentary evidence, except that irrelevant, immaterial, unduly repetitious, or privileged evidence may be excluded by the arbitrator.
(5) The arbitrator shall interpret and apply relevant statutory and regulatory requirements, legal precedents, and policy directives.
(d) The provisions of § 502.11 regarding ex parte communications apply to all arbitration proceedings. No interested person shall make or knowingly cause to be made to the arbitrator an unauthorized ex parte communication relevant to the merits of the proceeding, unless the parties agree otherwise. If a communication is made in violation of this subsection, the arbitrator shall ensure that a memorandum of the communication is prepared and made a part of the record, and that an opportunity for rebuttal is allowed. Upon receipt of a communication made in violation of this subsection, the arbitrator may, to the extent consistent with the interests of justice and the policies underlying this subchapter, require the offending party to show cause why the claim of such party should not be resolved against such party as a result of the improper conduct.
(e) The arbitrator shall make an award within 30 days after the close of the hearing, or the date of the filing of any briefs authorized by the arbitrator, whichever date is later, unless the parties agree to some other time limit.
§ 502.409 Arbitration awards.
(a)(1) The award in an arbitration proceeding under this subchapter shall include a brief, informal discussion of the factual and legal basis for the award, but formal findings of fact or conclusions of law shall not be required.
(2) Exceptions to or an appeal of an arbitrator’s decision may not be filed with the Commission.
(b) An award entered in an arbitration proceeding may not serve as an estoppel in any other proceeding for any issue that was resolved in the proceeding. Such an award also may not be used as precedent or otherwise be considered in any factually unrelated proceeding.
§ 502.410 Representation of parties.
(a) The provisions of § 502.21 apply to the representation of parties in dispute resolution proceedings, as do the provisions of § 502.27 regarding the representation of parties by nonattorneys.
(b) A neutral in a dispute resolution proceeding may require participants to demonstrate authority to enter into a binding agreement reached by means of a dispute resolution proceeding.
§ 502.411 Mediation and other alternative means of dispute resolution.
(a) Parties are encouraged to utilize mediation or other forms of alternative dispute resolution in all formal proceedings. The Commission also encourages those with disputes to pursue mediation in lieu of, or prior to, the initiation of a Commission proceeding.
(b) Any party may request, at any time, that a mediator or other neutral be appointed to assist the parties in reaching a settlement. If such a request is made in a proceeding assigned to an Administrative Law Judge, the provisions of § 502.91 apply. For all other matters, alternative dispute resolution services may be requested directly from the Federal Maritime Commission Alternative Dispute Resolution Specialist, who may serve as the neutral if the parties agree or who will arrange for the appointment of a neutral acceptable to all parties.
(c) The neutral shall convene and conduct mediation or other appropriate dispute resolution proceedings with the parties.
(d) Ex parte Communications. Except with respect to arbitration, the provisions of § 502.11 do not apply to dispute resolution proceedings, and mediators are expressly authorized to conduct private sessions with parties.
Subpart V – Implementation of the Equal Access to Justice Act in Commission Proceedings
§ 502.501 General provisions.
(a) Purpose. The Equal Access to Justice Act, 5 U.S.C. 504 (“EAJA”), provides for the award of attorney fees and other expenses to eligible individuals and entities who are parties to certain administrative proceedings (called “adversary adjudications”) before the Federal Maritime Commission (“the Commission”). An eligible party may receive an award when it prevails over an agency, unless the agency’s position was substantially justified or special circumstances make an award unjust. The rules in this subpart describe the parties eligible for awards and the proceedings that are covered. They also explain how to apply for awards, and the procedures and standards that the Commission will use to make them.
(b) When EAJA applies. EAJA applies to any adversary adjudication:
(1) Pending or commenced before the Commission on or after August 5, 1985;
(2) Commenced on or after October 1, 1984, and finally disposed of before August 5, 1985, provided that an application for fees and expenses, as described in § 502.502 of this subpart, has been filed with the Commission within 30 days after August 5, 1985; or
(3) Pending on or commenced on or after October 1, 1981, in which an application for fees and other expenses was timely filed and was dismissed for lack of jurisdiction.
(c) Proceedings covered. (1)(i) EAJA applies to adversary adjudications conducted by the Commission under this part. These are adjudications under 5 U.S.C. 554 in which the position of this or any other agency of the United States, or any component of any agency, is presented by an attorney or other representative who enters an appearance and participates in the proceeding.
(ii) Any proceeding in which the Commission may prescribe a lawful present or future rate is not covered by the Act.
(iii) Proceedings to grant or renew licenses are also excluded, but proceedings to modify, suspend, or revoke licenses are covered if they are otherwise “adversary adjudications.”
(2) The Commission’s failure to identify a type of proceeding as an adversary adjudication shall not preclude the filing of an application by a party who believes the proceeding is covered by the EAJA; whether the proceeding is covered will then be an issue for resolution in proceedings on the application.
(3) If a proceeding includes both matters covered by EAJA and matters specifically excluded from coverage, any award made will include only fees and expenses related to covered issues.
(d) Eligibility of applicants. (1) To be eligible for an award of attorney fees and other expenses under EAJA, the applicant must be a party to the adversary adjudication for which it seeks an award. The term “party” is defined in 5 U.S.C. 551(3). The applicant must show that it meets all conditions of eligibility set out in this section and § 502.502.
(2) The types of eligible applicants are:
(i) An individual with a net worth of not more than $2 million;
(ii) The sole owner of an unincorporated business who has a net worth of not more than $7 million, including both personal and business interests, and not more than 500 employees;
(iii) A charitable or other tax-exempt organization described in section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) with not more than 500 employees;
(iv) A cooperative association as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500 employees; and
(v) Any other partnership, corporation, association, unit of local government, or organization with a net worth of not more than $7 million and not more than 500 employees.
(vi) For purposes of paragraph (e)(3) of this section, a small entity as defined in 5 U.S.C. 601.
(3) For the purpose of eligibility, the net worth and number of employees of an applicant shall be determined as of the date the proceeding was initiated.
(4) An applicant who owns an unincorporated business will be considered as an “individual” rather than a “sole owner of an unincorporated business” if the issues on which the applicant prevails are related primarily to personal interests rather than to business interests.
(5) The employees of an applicant include all persons who regularly perform services for remuneration for the applicant, under the applicant’s direction and control. Part-time employees shall be included on a proportional basis.
(6) The net worth and number of employees of the applicant and all of its affiliates shall be aggregated to determine eligibility. Any individual corporation or other entity that directly or indirectly controls or owns a majority of the voting shares or other interests of the applicant, or any corporation or other entity of which the applicant directly or indirectly owns or controls a majority of the voting shares or other interests, will be considered an affiliate for purposes of this subpart, unless the adjudicative officer determines that such treatment would be unjust and contrary to the purposes of EAJA in light of the actual relationship between the affiliated entities. In addition, the adjudicative officer may determine that financial relationships of the applicant other than those described in this paragraph constitute special circumstances that would make an award unjust.
(7) An applicant that participates in a proceeding primarily on behalf of one or more other persons or entities that would be ineligible is not itself eligible for an award.
(e) Standards for awards. (1) A prevailing applicant may receive an award for fees and expenses incurred in connection with a proceeding or in a significant and discrete substantive portion of the proceeding, unless the position of the agency over which the applicant has prevailed was substantially justified. The position of the agency includes, in addition to the position taken by the agency in the adversary adjudication, the action or failure to act by the agency upon which the adversary adjudication is based. The burden of proof that an award should not be made to an eligible prevailing applicant is on agency counsel.
(2) An award will be reduced or denied if the applicant has unduly or unreasonably protracted the proceeding or if special circumstances make the award sought unjust.
(3) In an adversary adjudication arising from a Commission action to enforce a party’s compliance with a statutory or regulatory requirement, if the demand by the Commission is substantially in excess of the decision of the presiding officer and is unreasonable under the facts and circumstances of the case, the presiding officer shall award to the party fees and other expenses related to defending against the excessive demand, unless the party has committed a willful violation of law or otherwise acted in bad faith, or special circumstances make an award unjust.
(f) Allowable fees and expenses. (1) Awards will be based on rates customarily charged by the persons engaged in the business of acting as attorneys, agents and expert witnesses, even if the services were made available without charge or at a reduced rate to the applicant.
(2) No award for the fee of an attorney or agent under this subpart may exceed $125 per hour. No award to compensate an expert witness may exceed the highest rate at which the Commission pays expert witnesses. However, an award may also include the reasonable expenses of the attorney, agent, or witness as a separate item, if the attorney, agent or witness ordinarily charges clients separately for such expenses.
(3) In determining the reasonableness of the fee sought for an attorney, agent or expert witness, the adjudicative officer shall consider the following:
(i) If the attorney, agent or witness is in private practice, his or her customary fees for similar services, or, if an employee of the applicant, the fully allocated costs of the services;
(ii) The prevailing rate for similar services in the community in which the attorney, agent or witness ordinarily performs services;
(iii) The time actually spent in the representation of the applicant;
(iv) The time reasonably spent in light of the difficulty or complexity of the issues in the proceeding; and
(v) Such other factors as may bear on the value of the services provided.
(4) The reasonable cost of any study, analysis, engineering report, test project or similar matter prepared on behalf of a party may be awarded, to the extent that the charge for the services does not exceed the prevailing rate for similar services, and the study or other matter was necessary for preparation of applicant’s case.
(g) Awards against other agencies. If an applicant is entitled to an award because it prevails over another agency of the United States that participates in a proceeding before the Commission and takes a position that is not substantially justified, the award or an appropriate portion of the award shall be made against that agency. [Rule 501.]
§ 502.502 Information required from applicants.
(a) Contents of petition. (1) An application for an award of fees and expenses under EAJA shall be by petition under § 502.69 of this part, shall clearly indicate that the application is made under EAJA, and shall identify the applicant and the proceeding (including docket number) for which an award is sought. The application shall show that the applicant has prevailed and identify the position of an agency or agencies that the applicant alleges was not substantially justified. Unless the applicant is an individual, the application shall also state the number of employees of the applicant and describe briefly the type and purpose of its organization or business.
(2) The petition shall also include a statement that the applicant’s net worth does not exceed $2 million (if an individual) or $7 million (for all other applicants, including their affiliates). However, an applicant may omit this statement if:
(i) It attaches a copy of a ruling by the Internal Revenue Service that it qualifies as an organization described in section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a tax-exempt organization not required to obtain a ruling from the Internal Revenue Service on its exempt status, a statement that describes the basis for the applicant’s belief that it qualifies under such section; or
(ii) It states that it is a cooperative association as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)).
(3) The petition shall state the amount of fees and expenses for which an award is sought.
(4) The petition may also include any other matters that the applicant wishes the Commission to consider in determining whether and in what amount an award should be made.
(5) The petition shall be signed by the applicant or an authorized officer or attorney of the applicant. It shall also contain or be accompanied by a written verification under oath or under penalty of perjury that the information provided in the application is true and correct.
(b) Net worth exhibit. (1) Each applicant except a qualified tax-exempt organization or cooperative association must provide with its petition a detailed exhibit showing the net worth of the applicant and any affiliates (as defined in § 502.501(d)(6) of this subpart) when the proceeding was initiated. The exhibit may be in any form convenient to the applicant that provides full disclosure of the applicant’s and its affiliates’ assets and liabilities and is sufficient to determine whether the applicant qualifies under the standards in this subpart. The adjudicative officer may require an applicant to file additional information to determine its eligibility for an award.
(2) Ordinarily, the net worth exhibit will be included in the public record of the proceeding. However, an applicant that objects to public disclosure of information in any portion of the exhibit and believes there are legal grounds for withholding it from disclosure may submit that portion of the exhibit directly to the adjudicative officer in a sealed envelope labeled “Confidential Financial Information,” accompanied by a motion to withhold the information from public disclosure. The motion shall describe the information sought to be withheld and explain, in detail, why it falls within one or more of the specific exemptions from mandatory disclosure under the Freedom of Information Act, 5 U.S.C. 552(b)(1)-(9), why public disclosure of the information would adversely affect the applicant, and why disclosure is not required in the public interest. The material in question shall be served on counsel representing the agency against which the applicant seeks an award, but need not be served on any other party to the proceeding. If the adjudicative officer finds that the information should not be withheld from disclosure, it shall be placed in the public record of the proceeding. Otherwise, any request to inspect or copy the exhibit shall be disposed of in accordance with the Commission’s established procedures under the Freedom of Information Act under §§ 503.31-503.43 of this chapter.
(c) Documentation of fees and expenses. The petition shall be accompanied by full documentation of the fees and expenses, including the cost of any study, analysis, engineering report, test, project or similar matter, for which an award is sought. A separate itemized statement shall be submitted for each professional firm or individual whose services are covered by the application, showing the hours spent in connection with the proceeding by each individual, a description of the specific services performed, the rates at which each fee has been computed, any expenses for which reinbursement is sought, the total amount claimed, and the total amount paid or payable by the applicant or by any other person or entity for the services provided. The adjudicative officer may require the applicant to provide vouchers, receipts, or other substantiation for any expenses claimed.
(d) When a petition may be filed. (1) A petition may be filed whenever the applicant has prevailed in the proceeding or in a significant and discrete substantive portion of the proceeding, but in no case later than 30 days after the Commission’s final disposition of the proceeding.
(2) For purposes of this subpart, final disposition means the date on which a decision or order disposing of the merits of the proceeding or any other complete resolution of the proceeding, such as a settlement or voluntary dismissal, becomes final and unappealable, both within the Commission and to the courts.
(3) If review or reconsideration is sought or taken of a decision as to which an applicant believes it has prevailed, proceedings for the award of fees shall be stayed pending final disposition of the underlying controversy. When the United States appeals the underlying merits of an adversary adjudication to a court, no decision on an application for fees and other expenses in connection with that adversary adjudication shall be made until a final and unreviewable decision is rendered by the court on the appeal or until the underlying merits of the case have been finally determined pursuant to the appeal. [Rule 502.]
§ 502.503 Procedures for considering petitions.
(a) Filing and service of documents. (1) Any petition for an award or other pleading or document related to a petition shall be filed and served on all parties to the proceeding in the same manner as other pleadings in the proceeding, except as provided in § 502.502(b)(2) (confidential financial information).
(2) The petition and all other pleadings or documents related to the petition will be referred to an Administrative Law Judge to initially decide the matter as adjudicative officer.
(b) Reply to petition. (1) Within 30 days after service of a petition, counsel representing the agency against which an award is sought may file a reply to the petition. Unless counsel requests an extension of time for filing or files a statement of intent to negotiate under paragraph (b)(2) of this section, failure to file a reply within the 30-day period may be treated as a consent to the award requested.
(2) If agency counsel and the applicant believe that the issues in the fee application can be settled, they may jointly file a statement of their intent to negotiate a settlement. The filing of this statement shall extend the time for filing a reply for an additional 30 days, and further extension may be granted by the adjudicative officer upon request by agency counsel and the applicant.
(3) The reply shall explain in detail any objections to the award requested and identify the facts relied on in support of counsel’s position. If the reply is based on any alleged facts not already in the record of the proceeding, agency counsel shall include with the reply either supporting affidavits or a request for further proceedings under paragraph (f) of this section.
(c) Response to reply. Within 15 days after service of a reply, the applicant may file a response. If the response is based on any alleged facts not already in the record of the proceeding, the applicant shall include with the response either supporting affidavits or a request for further proceedings under paragraph (f) of this section.
(d) Comments by other parties. Any party to a proceeding other than the applicant and agency counsel may file comments on an application within 30 days after it is served, or on a reply, within 15 days after it is served. A commenting party may not participate further in proceedings on the application unless the adjudicative officer determines that the public interest requires such participation in order to permit full exploration of matters raised in the comments.
(e) Settlement. The applicant and agency counsel may agree on a proposed settlement of the award before final action on the application, either in connection with a settlement of the underlying proceeding, or after the underlying proceeding has been concluded in accordance with the rules of this subpart pertaining to settlement. If a prevailing party and agency counsel agree on a proposed settlement of an award before a petition is filed, the petition shall be filed with the proposed settlement.
(f) Further proceedings. (1) Ordinarily, the determination of an award will be made on the basis of the written record. However, on request of either the applicant or agency counsel, or on his or her own initiative, the adjudicative officer may order further proceedings, such as an informal conference, oral argument, additional written submissions or, as to issues other than substantial justification (such as the applicant’s eligibility or substantiation of fees and expenses), pertinent discovery or an evidentiary hearing. Such further proceedings shall be held only when necessary for full and fair resolution of the issues arising from the application, and shall be conducted as promptly as possible. Whether or not the position of the agency was substantially justified shall be determined on the basis of the administrative record, as a whole, which is made in the adversary adjudication for which fees and other expenses are sought.
(2) A request that the adjudicative officer order further proceedings under this section shall specifically identify the information sought or the disputed issues and shall explain why the additional proceedings are necessary to resolve the issues.
(g) Decision. The adjudicative officer shall serve an initial decision on the application within 60 days after completion of proceedings on the application. The decision shall include written findings and conclusions on the applicant’s eligibility and status as a prevailing party, and an explanation of the reasons for any difference between the amount requested and the amount awarded. The decision shall also include, if at issue, findings on whether the agency’s position was substantially justified, whether the applicant unduly protracted the proceedings, or whether special circumstances make an award unjust. If the applicant has sought an award against more than one agency, the decision shall allocate responsibility for payment of any award made among the agencies, and shall explain the reason for the allocation made.
(h) Commission review. Either the applicant or agency counsel may seek review of the initial decision on the fee application, or the Commission may decide to review the decision on its own initiative, in accordance with § 502.227 of this part. If neither the applicant nor agency counsel seeks review and the Commission does not take review on its own initiative, the initial decision on the application shall become a final decision of the Commission 30 days after it is issued. Whether to review a decision is a matter within the discretion of the Commission. If review is taken, the Commission will issue a final decision on the application or remand the application to the adjudicative officer for further proceedings.
(i) Judicial review. Judicial review of final Commission decisions on awards may be sought as provided in 5 U.S.C. 504(c)(2).
(j) Payment of award. (1)(i) An applicant seeking payment of an award shall submit to the comptroller or other disbursing officer of the paying agency a copy of the Commission’s final decision granting the award, accompanied by a certification that the applicant will not seek review of the decision in the United States courts.
(ii) The agency will pay the amount awarded to the applicant within 60 days.
(2) Where the Federal Maritime Commission is the paying agency, the application for payment of award shall be submitted to: Office of Budget and Financial Management, Federal Maritime Commission, Washington, DC 20573. [Rule 503.]
Subpart W – Compromise, Assessment, Mitigation, Settlement, and Collection of Civil Penalties
§ 502.601 Purpose and scope.
The purpose of this subpart is to implement the statutory provisions of section 19 of the Merchant Marine Act, 1920 (46 U.S.C. 42101-42109), section 13 of the Shipping Act of 1984 (46 U.S.C. 41107-41109), and sections 2(c) and 3(c) of Pub. L. 89-777 (46 U.S.C. 44104) by establishing rules and regulations governing the compromise, assessment, settlement and collection of civil penalties arising under certain designated provisions of the Merchant Marine Act, 1920, the Shipping Act of 1984, Public Law 89-777, and/or any order, rule, or regulation (except for procedural rules and regulations contained in this part) issued or made by the Commission in the exercise of its powers, duties and functions under those statutes. [Rule 601.]
§ 502.602 Definitions.
For the purposes of this subpart:
(a) Assessment means the imposition of a civil penalty by order of the Commission after a formal docketed proceeding.
(b) Commission means the Federal Maritime Commission.
(c) Compromise means the process whereby a civil penalty for a violation is agreed upon by the respondent and the Commission outside of a formal, docketed proceeding.
(d) Mitigation means the reduction, in whole or in part, of the amount of a civil penalty.
(e) Person includes individuals, corporations, partnerships, and associations existing under or authorized by the laws of the United States or of a foreign country.
(f) Respondent means any person charged with a violation.
(g) Settlement means the process whereby a civil penalty or other disposition of the case for a violation is agreed to in a formal, docketed proceeding instituted by order of the Commission.
(h) Violation includes any violation of sections 19(f)(4), 19(g)(4) and 19(k) of the Merchant Marine Act, 1920 (46 U.S.C. 42104(a), 42104(d), and 42108); any provision of the Shipping Act of 1984 (46 U.S.C. 40101-41309); sections 2 and 3 of Pub. L. 89-777 (46 U.S.C. 44101-44106); and/or any order, rule or regulation (except for procedural rules and regulations contained in this part) issued or made by the Commission in the exercise of its powers, duties and functions under the Merchant Marine Act, 1920, the Shipping Act of 1984, or Pub. L. 89-777.
(i) Words in the plural form shall include the singular and vice versa; and words importing the masculine gender shall include the feminine and vice versa. The terms “includes” and “including” do not exclude matters not listed but which are in the same general class. The word “and” includes “or”, except where specifically stated or where the context requires otherwise. [Rule 602.]
§ 502.603 Assessment of civil penalties: Procedure; criteria for determining amount; limitations; relation to compromise.
(a) Procedure for assessment of penalty. The Commission may assess a civil penalty only after notice and opportunity for hearing. Civil penalty assessment proceedings, including settlement negotiations, shall be governed by the Commission’s Rules of Practice and Procedure in this part. All settlements must be approved by the Presiding Officer. The full text of any settlement must be included in the final order of the Commission.
(b) Criteria for determining amount of penalty. In determining the amount of any penalties assessed, the Commission shall take into account the nature, circumstances, extent and gravity of the violation committed and the policies for deterrence and future compliance with the Commission’s rules and regulations and the applicable statutes. The Commission shall also consider the respondent’s degree of culpability, history of prior offenses, ability to pay and such other matters as justice requires.
(c) Limitations; relation to compromise. When the Commission, in its discretion, determines that policy, justice or other circumstances warrant, a civil penalty assessment proceeding may be instituted at any time for any violation which occurred within five years prior to the issuance of the order of investigation. Such proceeding may also be instituted at any time after the initiation of informal compromise procedures, except where a compromise agreement for the same violations under the compromise procedures has become effective under § 502.604). [Rule 603.]
§ 502.604 Compromise of penalties: Relation to assessment proceedings.
(a) Scope. Except in pending civil penalty assessment proceedings provided for in § 502.603, the Commission, when it has reason to believe a violation has occurred, may invoke the informal compromise procedures of this section after observing the procedures in § 502.63(d).
(b) Criteria for compromise. In addition to the factors set forth in § 502.603(b), in compromising a penalty claim, the Commission may consider litigative probabilities, the cost of collecting the claim and enforcement policy.
(c) Disposition of claims in compromise procedures. (1) When a penalty is compromised and the respondent agrees to settle for that amount, a compromise agreement shall be executed. (One example of such compromise agreement is set forth as appendix A to this subpart.) This agreement, after reciting the nature of the claim, will include a statement evidencing the respondent’s agreement to the compromise of the Commission’s penalty claim for the amount set forth in the agreement and will also embody an approval and acceptance provision which is to be signed by the appropriate Commission official. Upon compromise of the penalty in the agreed amount, a duplicate original of the executed agreement shall be furnished to the respondent.
(2) Upon completion of the compromise, the Commission may issue a public notice thereof, the terms and language of which are not subject to negotiation.
(d) Relation to assessment proceedings. Except by order of the Commission, no compromise procedure shall be initiated or continued after institution of a Commission assessment proceeding directed to the same violations. Any offer of compromise submitted by the respondent pursuant to this section shall be deemed to have been furnished by the respondent without prejudice and shall not be used against the respondent in any proceeding.
§ 502.605 Payment of penalty: Method; default.
(a) Method. Payment of penalties by the respondent is to be made by bank cashier’s check or other instrument acceptable to the Commission.
(b) All checks or other instruments submitted in payment of claims shall be made payable to the Federal Maritime Commission.
(c) Default in payment. Where a respondent fails or refuses to pay a penalty properly assessed under § 502.603, or compromised and agreed to under § 502.604, appropriate collection efforts will be made by the Commission, including, but not limited to referral to the Department of Justice for collection. Where such defaulting respondent is a licensed freight forwarder, such default also may be grounds for revocation or suspension of the respondent’s license, after notice and opportunity for hearing, unless such notice and hearing have been waived by the respondent in writing. [Rule 605.]
Appendix A to Subpart W of Part 502 – Example of Compromise Agreement To Be Used Under 46 CFR 502.604
This Agreement is entered into between:
(1) the Federal Maritime Commission, hereinafter referred to as Commission, and
(2) ________________, hereinafter referred to as Respondent.
Whereas, the Commission is considering the institution of an assessment proceeding against Respondent for the recovery of civil penalties provided under the [appropriate statute], for alleged violations of section ________;
Whereas, this course of action is the result of practices believed by the Commission to have been engaged in by Respondent, to wit:
[General description of practices and dates or time period involved]
Whereas, the Commission has authority under the Shipping Act of 1984 to compromise and collect civil penalties; and,
Whereas, Respondent has terminated the practices which are the basis for the allegations of violation set forth herein, and has instituted and indicated its willingness to maintain measures designed to eliminate these practices by Respondent, its officers, directors or employees.
Now Therefore, in consideration of the premises herein, and in compromise of all civil penalties arising from the alleged violations, Respondent and the Commission hereby agree upon the following terms and conditions of compromise and settlement:
1. Respondent shall make a monetary payment to the Commission herewith, by bank cashier’s check, in the total amount of $________.
2. Upon acceptance in writing of this Agreement by the Director of the Bureau of Enforcement of the Commission, this instrument shall forever bar the commencement or institution of any assessment proceeding or other claim for recovery of civil penalties from the Respondent arising from the alleged violations set forth above.
3. It is expressly understood and agreed that this Agreement is not, and is not to be construed as, an admission by Respondent to the alleged violations set forth above.
The above terms, conditions and consideration are hereby approved and accepted:
By the Federal Maritime Commission:
Subpart X – Hearing Procedure Governing Denial, Suspension, or Revocation of OTI License
§ 502.701 Purpose and scope.
(a) The purpose of this subpart is to provide the hearing procedures for the denial, suspension, or revocation of an ocean transportation intermediary (OTI) license applied for or issued under part 515 of this chapter when the Bureau of Certification and Licensing has issued a notice of intent to deny under § 515.15 of this chapter or notice of revocation or suspension under § 515.16 of this chapter and the applicant or licensee timely requests a hearing under those sections.
(b) Denial, suspension, and revocation proceedings under this subpart will be adjudicated by the administrative law judges of the Commission under the procedures set forth in this subpart. [Rule 701.]
§ 502.702 Hearing requests.
(a) Upon receipt of a timely hearing request under § 515.17 of this chapter, the Secretary will transmit the request to the Office of Administrative Law Judges.
(b) The assigned administrative law judge will notify the Bureau of Certification and Licensing (BCL) and the Bureau of Enforcement of the hearing request, and the Bureau of Enforcement must file with the administrative law judge and serve on the applicant or licensee a copy of the notice given to the applicant or licensee and a copy of BCL materials supporting the notice. [Rule 702.]
§ 502.703 Applicant or licensee response.
Upon receiving the materials described in § 502.702(b), the administrative law judge will issue a notice advising the applicant or licensee of the right to respond in support of an OTI application or continuation of a current OTI license. The response must be:
(a) Filed with the administrative law judge within 30 days of the administrative law judge’s notice; and
(b) Include any supporting information or documents, such as affidavits of fact, memoranda, or written argument. [Rule 703.]
§ 502.704 Reply.
The Bureau of Enforcement may, within twenty (20) days of service of the response filed by the applicant or licensee, file with the administrative law judge and serve upon the applicant or licensee a reply memorandum accompanied by appropriate affidavits and supporting documents.
§ 502.705 Additional information.
The administrative law judge may require the submission of additional affidavits, documents, or memoranda from the Bureau of Enforcement or the licensee or applicant. [Rule 705.]
§ 502.706 Request for an oral hearing or argument.
(a) In the usual course of disposition of matters filed under this subpart, no oral hearing or argument will be held, but the administrative law judge, in their discretion, may order such hearing or argument.
(b) A request for oral hearing or argument may be incorporated in the applicant or licensee’s response or in the Bureau of Enforcement’s reply to the response. Requests for oral hearing or argument will not be entertained unless they set forth in detail the reasons why the filing of affidavits or other documents will not permit the fair and expeditious disposition of the matter, and the precise nature of the facts sought to be proved or issues to be addressed at an oral hearing or argument.
(c) The administrative law judge will rule upon a request for oral hearing or argument within ten (10) days of its receipt.
(d) In the event oral hearing or argument is ordered, it will be held in accordance with the rules applicable to other formal proceedings, as set forth in subparts A through Q of this part. [Rule 706.]
§ 502.707 Intervention.
Intervention will ordinarily not be permitted. [Rule 707.]
§ 502.708 Decision.
(a) Except as described in paragraph (b) of this section, the administrative law judge will issue a decision within forty (40) days after the submission of the Bureau of Enforcement’s reply.
(b) If oral hearing or argument is conducted or additional information is required, then the decision will be issued within forty (40) days after the oral proceeding or the deadline for submission of additional information, whichever is later.
(c) The decision of the administrative law judge will be final, unless, within twenty-two (22) days from the date of service of the decision, either party files exceptions under § 502.227(a)(1) or the Commission makes a determination to review under § 502.227(a)(3) and (d). [Rule 708.]
§ 502.709 Applicability of other rules to this subpart.
(a) Except as otherwise specifically provided in this subpart or in paragraph (b) of this section, the sections in subparts A through Q, inclusive, of this part do not apply to proceedings covered by this subpart.
(b) The following sections in subparts A through Q apply to proceedings covered by this subpart: §§ 502.1 through 502.11, 502.13 (Filing requirements, Document requirements, and General rules); 502.21 through 502.23 (Appearance, Authority for representation, Notice of appearance, Substitution, and Withdrawal of representative); 502.42 (Bureau of Enforcement); 502.43 (Substitution of parties); 502.101 through 502.105 (Computation of time); 502.114, 502.116 through 502.117 (Service of documents); 502.223 through 502.230 (Decisions). [Rule 709.]
Subpart Y – Paperwork Reduction Act
§ 502.991 OMB control numbers assigned pursuant to the Paperwork Reduction Act.
This section displays the control numbers assigned to information collection requirements of the Commission in this part by the Office of Management and Budget (OMB) pursuant to the Paperwork Reduction Act of 1980, Pub. L. 96-511. The Commission intends that this section comply with the Act, which requires that agencies display a current control number assigned by the Director of OMB for each agency information collection requirement:
| Section | Current OMB control no. |
|---|---|
| 502.27 (Form FMC.12) | 3072-0001 |
PART 503 – PUBLIC INFORMATION
Subpart A – General
§ 503.1 Scope and purpose.
This part implements the Freedom of Information Act (FOIA), 5 U.S.C. 552, as amended, the Privacy Act of 1974, 5 U.S.C. 552a, and the Government in the Sunshine Act (1976), 5 U.S.C. 552b; and sets forth the Commission’s regulations governing:
(a) Public availability of Commission information and records at its Office of the Secretary, published in the
(b) Procedures for requests for testimony by current or former FMC employees relating to official information and production of official Commission records in litigation;
(c) The type of services and amount of fees charged for certain Commission services; and
(d) The Commission’s Information Security Program.
Subpart B – Publication in the Federal Register
§ 503.11 Materials to be published.
The Commission shall separately state and concurrently publish the following materials in the
(a) Descriptions of its central and field organization and the established places at which the officers from whom, and the methods whereby, the public may secure information, make submittals or requests, or obtain decisions.
(b) Statements of the general course and method by which its functions are channeled and determined, including the nature and requirements of all formal and informal procedures available.
(c) Rules of procedure, descriptions of forms available or the places at which forms may be obtained, and instructions as to the scope and contents of all papers, reports, or examinations.
(d) Substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the agency.
(e) Every amendment, revision, or repeal of the foregoing.
§ 503.12 Effect of nonpublication.
Except to the extent that a person has actual and timely notice of the terms thereof, no person shall in any manner be required to resort to, or be adversely affected by any matter required to be published in the
§ 503.13 Incorporation by reference.
For purposes of this subpart, matter which is reasonably available to the class of persons affected hereby shall be deemed published in the
Subpart C – Records, Information and Materials Generally Available to the Public Without Resort to Freedom of Information Act Procedures
§ 503.21 Mandatory public records.
(a) The Commission, as required by the Freedom of Information Act, 5 U.S.C. 552, is responsible for determining which of its records must be made publicly available, for identifying additional records of interest to the public that are appropriate for public disclosure, for posting and indexing such records, and for reviewing and updating posted records and indices on an ongoing basis. The Commission makes the following materials available for public inspection in electronic format on its Web site at www.fmc.gov:
(1) Final opinions (including concurring and dissenting opinions) and all orders made in the adjudication of cases.
(2) Those statements of policy and interpretations which have been adopted by the Commission.
(3) Administrative staff manuals and instructions to staff that affect any member of the public.
(4) Copies of all records, regardless of form or format, which have been released to any person pursuant to a Freedom of Information Act request, and which the Secretary determines have become or are likely to become the subject of subsequent requests for substantially the same records, and a general index of such records.
(b) To prevent unwarranted invasion of personal privacy, the Secretary may delete identifying details when it makes available or publishes an opinion, statement of policy, interpretation, staff manual, instruction, or copies of records referred to in paragraph (a)(4) of this section. In each case, the justification for the deletion shall be explained fully in writing, and the extent of such deletion shall be indicated on that portion of the record which is made available or published, unless including that indication would harm an interest protected by an exemption in § 503.33 under which the deletion is made. If technically feasible, the extent of the deletion shall be indicated at the place in the record where the deletion was made.
(c) The Commission maintains and makes available for public inspection in an electronic format, a current log or index providing identifying information for the public as to any matter which is issued, adopted, or promulgated, and which is required by paragraph (a) of this section to be made available or published.
(1) No final order, opinion, statement of policy, interpretation, or staff manual or instruction that affects any member of the public will be relied upon, used, or cited as precedent by the Commission against any private party unless:
(i) It has been logged or indexed and either made available or published on its public Web site as provided by this subpart; or
(ii) That private party shall have actual and timely notice of the terms thereof.
(2) [Reserved]
(d) Duplication of records may be subject to fees as prescribed in subpart E of this part.
§ 503.22 Records available through the Commission’s Web site or at the Office of the Secretary.
The following records are also available without the requirement of a FOIA request on the Commission’s Web site or by contacting the Office of the Secretary, Federal Maritime Commission, 800 North Capitol St. NW., Washington, DC 20573, [email protected]. Access to requested records may be delayed if they have been sent to archives. Certain fees may be assessed for duplication of records made available by this section as prescribed in subpart F of this part.
(a) Proposed and final rules and regulations of the Commission including general substantive rules, statements of policy and interpretations, and rules of practice and procedure.
(b) Federal Maritime Commission reports.
(c) Official docket files in all formal proceedings including, but not limited to, orders, final decisions, notices, pertinent correspondence, transcripts, exhibits, and briefs, except for materials which are the subject of a protective order.
(d) News releases, consumer alerts, Commissioner statements, and speeches.
(e) Approved summary minutes of Commission actions showing final votes, except for minutes of closed Commission meetings which are not available until the Commission publicly announces the results of such deliberations.
(f) Annual reports of the Commission.
(g) Agreements filed or in effect pursuant to section 5 (46 U.S.C. 40301(d)-(e), 40302-40303, 40305) and section 6 (46 U.S.C. 40304, 40306, 41307(b)-(d)) of the Shipping Act of 1984.
(h) List of FMC-licensed and bonded ocean transportation intermediaries.
(i) Notification of ocean transportation intermediaries license applications, revocations, and suspensions.
(j) General descriptions of the functions, bureaus, and offices of the Commission, phone numbers and email addresses, as well as locations of Area Representatives.
(k) Information about how to file a complaint alleging violations of the Shipping Act, and how to seek mediation or alternative dispute resolution services.
(l) Commonly used forms.
(m) Final and pending proposed rules.
(n) Access to statements of policy and interpretations as published in part 545 of this chapter.
(o) Lists of the location of all common carrier and conference tariffs and publically available terminal schedules of marine terminal operators.
§§ 503.23-503.24 [Reserved]
Subpart D – Requests for Records Under the Freedom of Information Act
§ 503.31 Records available upon written request under the Freedom of Information Act.
(a) Generally. Many documents are available on the Commission’s public Web site and the Commission encourages requesters visit the Web site before making a request for records under FOIA.
(1) Electronic or written requests. A member of the public may request permission to inspect, copy or be provided with any Commission record not described in subpart C of this part or posted on the Commission’s Web site at www.fmc.gov. Such a request must:
(i) Reasonably describe the record or records sought;
(ii) Be submitted electronically to [email protected] or in writing to the Secretary, Federal Maritime Commission, 800 North Capitol Street NW., Washington, DC 20573.
(iii) Be clearly marked on the subject line of an email or on the exterior of the envelope with the term “FOIA.”
(2) [Reserved]
(b) The Secretary shall evaluate each request in conjunction with the official having responsibility for the subject matter area and the General Counsel, and the Secretary shall determine whether or not to grant the request in accordance with the provisions of this subpart.
(c) In making any record available to a person under this subpart, the Secretary shall provide the record in any form or format requested by the person if the record is readily reproducible by the Secretary in that form or format.
(d) Certain fees may be assessed for processing requests under this subpart as prescribed in subpart F of this part.
§ 503.32 Procedures for responding to requests made under the Freedom of Information Act.
(a) Determination to grant or deny request. Upon request by any member of the public for documents, made in accordance with the rules of this part, the Commission’s Secretary or his or her delegate in his or her absence, shall determine whether or not such request shall be granted.
(1) Such determination shall be made by the Secretary within twenty (20) business days after receipt of such request, except as provided in paragraphs (b) and (e)(4) of this section, and the Secretary shall immediately notify the requester of:
(i) Such determination and the reasons therefor;
(ii) The right of such person to seek assistance from the agency’s FOIA Public Liaison; and
(iii) In the case of an adverse determination, the right of such requester to appeal to the Chairman no less than 90 days after the date of such adverse determination, and the right of such requester to seek dispute resolution services from the agency’s FOIA Public Liaison or the Office of Government Information Services.
(2) Upon granting a request, the Secretary shall promptly make records available to the requestor. Upon denial of such a request the Secretary shall promptly notify the requestor of the determination, explain the reason for denial, give an estimate of the volume of matter denied, and set forth the names and titles or positions of each person responsible for the denial of the request.
(3)(i) Any party whose request for documents or other information pursuant to this part has been denied in whole or in part by the Secretary may appeal such determination. Any such appeal must:
(A) Be addressed to: Chairman, Federal Maritime Commission, Washington, D.C. 20573-0001; and
(B) Be filed not later than 90 days following receipt of notification of full or partial denial of records requested.
(ii) The Chairman or the Chairman’s specific delegate, in his or her absence, shall make a determination with respect to that appeal within twenty (20) business days after receipt of such appeal, except as provided in paragraph (b) of this section.
(iii) If, on appeal, the denial is upheld, either in whole or in part, the Chairman shall so notify the party submitting the appeal and shall notify such person of the provisions of 5 U.S.C. 552(a)(4) regarding judicial review of such determination upholding the denial. Notification shall also include the statement that the determination is that of the Chairman of the Federal Maritime Commission and the name of the Chairman.
(b) Extension of time limits. (1) In unusual circumstances, as defined in paragraph (b)(2) of this section, the time limits prescribed with respect to initial actions in response to a FOIA request or actions on appeal may be extended by written notice from the Secretary of the Commission to the person making such request, setting forth the reasons for such extension and the date on which a determination is expected to be dispatched. No such notice shall specify a date that would result in an extension for more than ten (10) working days, except as provided in paragraph (b)(3) of this section.
(2) As used in this paragraph, unusual circumstances means, but only to the extent reasonably necessary to the proper processing of the particular request:
(i) The need to search for and collect the requested records from field facilities or other establishments that are separate from the office processing the request;
(ii) The need to search for, collect, and appropriately examine a voluminous amount of separate and distinct records which are demanded in a single request; or
(iii) The need for consultation, which shall be conducted with all practicable speed, with another agency having a substantial interest in the determination of the request or among two or more components of the agency having substantial subject matter interest therein.
(3) If the time limit is extended as prescribed under this section, and the request cannot be processed within the extended time limit, the Secretary shall notify the requestor, and either provide the requestor with an opportunity to limit the scope of the request so that it may be processed within the time limit, or provide the requestor an opportunity to arrange with the Secretary an alternative time frame for processing the request or a modified request. To aid the requester, the Commission will make available its FOIA Public Liaison, who shall assist in the resolution of any dispute between the requester and the Commission, and notify the requester of the right of the requester to seek dispute resolution services from the Office of Government Information Services.
(4) The Secretary may make an initial written request to the requestor for information to clarify the request which will toll the 20-day processing period until such information has been received. The 20-day processing period will recommence after receipt of the requested information.
(5) The Secretary may also make written requests to clarify issues regarding fee assessments. Such written requests will toll the 20-day processing period until such information has been received from the requestor. The 20-day processing period will recommence after receipt of the requested information.
(c) Aggregation of requests. Certain requests by the same requestor, or by a group of requestors acting in concert, may be aggregated:
(1) Upon the Secretary’s reasonable belief that such requests actually constitute a single request, which if not aggregated would satisfy the unusual circumstances specified in paragraph (b)(2) of this section; and
(2) If the requests involve clearly related matters.
(d) Multitrack processing of requests. The Secretary uses multitrack processing of FOIA requests. Requests which seek and are granted expedited processing are put on the expedited track. All other requests are designated either simple or complex requests based on the amount of time and/or complexity needed to process the request. A request may be considered simple if it involves records that are routinely requested and readily available.
(e) Expedited processing of requests. (1) The Secretary will provide for expedited processing of requests for records when the person requesting the records can demonstrate a compelling need.
(2) The term compelling need means:
(i) A failure to obtain requested records on an expedited basis under this paragraph could reasonably be expected to pose an imminent threat to the life or physical safety of an individual; or
(ii) With respect to a request made by a person primarily engaged in disseminating information, urgency to inform the public concerning actual or alleged Federal Government activity.
(3) A demonstration of compelling need by a person making a request for expedited processing must be made in the form of a statement describing the circumstances and certified by such person to be true and correct to the best of such person’s knowledge and belief.
(4) The Secretary shall determine whether to provide expedited processing, and provide notice of the determination to the person making the request, within ten (10) calendar days after the receipt date of the request.
(5) Appeal of the determination not to provide expedited processing should be sought in accordance with the provisions of paragraph (a)(3)(i) of § 503.32, and will be considered expeditiously.
(6) Any request granted expedited processing shall be processed as soon as practicable.
§ 503.33 Exceptions to availability of records.
(a) Except as provided in paragraph (b) of this section, the following records may be withheld from disclosure:
(1) Records specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy and which are in fact properly classified pursuant to such Executive order. Records to which this provision applies shall be deemed by the Commission to have been properly classified. This exception may apply to records in the custody of the Commission which have been transmitted to the Commission by another agency which has designated the record as nonpublic under an Executive order.
(2) Records related solely to the internal personnel rules and practices of the Commission.
(3) Records specifically exempted from disclosure by statute, provided that such statute:
(i) Requires that the matter be withheld from the public in such a manner as to leave no discretion on the issue, or
(ii) Establishes particular criteria for withholding or refers to particular types of matters to be withheld.
(4) Trade secrets and commercial financial information obtained from a person and privileged or confidential.
(5) Inter-agency or intra-agency memoranda or letters that would not be available by law to a party other than an agency in litigation with the Commission, provided that the deliberative process privilege shall not apply to records created 25 years or more before the date on which the records were requested.
(6) Personnel and medical files and similar files, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
(7) Records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information:
(i) Could reasonably be expected to interfere with enforcement proceedings;
(ii) Would deprive a person of a right to a fair trial or an impartial adjudication;
(iii) Could reasonably be expected to constitute an unwarranted invasion of personal privacy;
(iv) Could reasonably be expected to disclose the identity of a confidential source, including a State, local, or foreign agency or authority or any private institution which furnished information on a confidential basis, and, in the case of a record or information compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, information furnished by a confidential source;
(v) Would disclose techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law; or
(vi) Could reasonably be expected to endanger the life or physical safety of any individual.
(8) Contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions; or
(9) Geological and geophysical information and data, including maps, concerning wells.
(b) Nothing in this section authorizes withholding of information or limiting the availability of records to the public except as specifically stated in this part, nor shall this part be authority to withhold information from Congress.
(c) Any reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this part. The amount of information deleted shall be indicated on the released portion of the record, unless including that indication would harm an interest protected by the exemption in this section under which the deletion is made. If technically feasible, the amount of the information deleted shall be indicated at the place in the record where such deletion is made.
(d) Whenever a request is made which involves access to records described in paragraph (a)(7)(i) of this section and the investigation or proceeding involves a possible violation of criminal law, and there is reason to believe that the subject of the investigation or proceeding is not aware of its pendency, and disclosure of the existence of the records could reasonably be expected to interfere with enforcement proceedings, the Commission may, during only such time as that circumstance continues, treat the records as not subject to the requirements of 5 U.S.C. 552 and this subpart.
§ 503.34 Annual report of public information request activity.
(a) On or before February 1 of each year, the Commission must submit to the Attorney General of the United States, in the format required by the Attorney General, a report on FOIA activities which shall cover the preceding fiscal year pursuant to 5 U.S.C. 552(e).
(b) Each such report shall be made available to the public in electronic format.
Subpart E – Requests for Testimony by Employees Relating to Official Information and Production of Official Records in Litigation
§ 503.37 Purpose and scope; definitions.
(a) This subpart sets forth the procedures to be followed with respect to:
(1) Service of summonses and complaints or other requests or demands directed to the Federal Maritime Commission (Commission) or to any Commission employee or former employee in connection with litigation arising out of or involving the performance of official activities of the Commission; and
(2) The oral or written disclosure, in response to subpoenas, orders, or other requests or demands of judicial or quasi-judicial authority (collectively “demands”), whether civil or criminal in nature, or in response to requests for depositions, affidavits, admissions, responses to interrogatories, document production, or other litigation-related matters, pursuant to the Federal Rules of Civil Procedure, the Federal Rules of Criminal Procedure, or applicable state rules (collectively “requests”), of any material contained in the files of the Commission, any information relating to material contained in the files of the Commission, or any information acquired while the subject of the demand or request is or was an employee of the Commission, as part of the performance of that person’s duties or by virtue of that person’s official status.
(b) This subpart applies in all litigation in which the United States is not a party.
(c) For purposes of this subpart, the term employee includes:
(1) any current or former Commissioner or employee of the Commission;
(2) any other individual hired through contractual agreement or on behalf of the Commission or who has performed or is performing services under such agreement for the Commission;
(3) Any individual who served or is serving in any consulting or advisory capacity to the Commission, whether informal or formal.
(d) The Commission authorizes the General Counsel or the General Counsel’s designee to make determinations under this section.
(e) For purposes of this subpart, the term litigation encompasses all pre-trial, trial, and post-trial stages of all judicial or administrative actions, hearings, investigations, or similar proceedings before courts, commissions, grand juries, or other judicial or quasi-judicial bodies or tribunals, whether criminal, civil, or administrative in nature. This subpart governs, inter alia, responses to requests for discovery, depositions, and other litigation proceedings, as well as responses to informal requests by attorneys or others in situations involving litigation. However, this subpart shall not apply to any claims against the Commission by Federal Maritime Commission employees (present or former), or applicants for Commission employment, for which jurisdiction resides with the U.S. Equal Employment Opportunity Commission; the U.S. Merit Systems Protection Board; the Office of Special Counsel; the Federal Labor Relations Authority; or a labor arbitrator operating under a collective bargaining agreement between the Commission and a labor organization representing Commission employees; or their successor agencies or entities.
(f) For purposes of this subpart, official information means all information of any kind, however stored, that is:
(1) In the custody and control of the Commission;
(2) Relates to information in the custody and control of the Commission; or
(3) Was acquired by Commission contractors, employees, former employees or former contractors as part of their official duties or because of their official status within the Commission while such individuals were employed by or served on behalf of the Commission.
(g) Nothing in this subpart affects disclosure of information under the Freedom of Information Act (FOIA), 5 U.S.C. 552, the Privacy Act, 5 U.S.C. 552a, the Government in the Sunshine Act, 5 U.S.C. 552b, the Commission’s implementing regulations, or pursuant to congressional subpoena.
(h) Nothing in this subpart affects the disclosure of official information to other federal agencies or Department of Justice attorneys in connection with:
(1) Litigation conducted on behalf or in defense of the United States, its agencies, officers, and employees; or
(2) Litigation in which the United States has an interest.
(i) This subpart is intended only to provide guidance for the internal operations of the Commission, and is not intended to, and does not, and may not be relied upon to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States.
§ 503.38 General prohibition.
(a) No employee or former employee of the Commission shall, in response to a demand or request, produce any material contained in the files of the Commission, or disclose any information relating to or based upon material contained in the files of the Commission, or disclose any information or produce any material acquired as part of the performance of that person’s official duties or because of that person’s official status, without prior approval of the Commission in accordance with §§ 503.39 and 503.40.
§ 503.39 Factors to be considered in response to demands or requests.
(a) The Commission will determine whether testimony or the production of documents will be authorized according to the following criteria:
(1) Statutory restrictions, as well as any legal objection, exemption, or privilege that may apply;
(2) Relevant legal standards for disclosure of nonpublic information and documents;
(3) Commission rules and regulations;
(4) The public interest;
(5) Minimizing or preventing expenditures of Commission time and resources solely for private purposes.
(6) Minimizing the appearance of improperly favoring one litigant over another;
(7) Minimizing the possibility that the public will misconstrue variances between personal opinions of Commission employees and Commission policy; and
(8) Preserving the integrity of the administrative process.
(b) [Reserved]
§ 503.40 Service of process and filing requirements.
(a) Service of summonses and complaints. (1) Except in cases in which the Commission is represented by legal counsel who have entered an appearance or otherwise given notice of their representation, only the General Counsel is authorized to receive and accept subpoenas, or other demands or requests directed to the Commission, or any component thereof, or its employees, or former employees, whether civil or criminal nature, for:
(i) Material, including documents, contained in the files of the Commission;
(ii) Information, including testimony, affidavits, declarations, admissions, responses to interrogatories, or informal statements, relating to material contained in the files of the Commission or which any Commission employee acquired in the course and scope of the performance of his official duties;
(iii) Garnishment or attachment of compensation of current or former employees; or
(iv) The performance or non-performance of any official Commission duty.
(2) All such documents should be delivered or addressed to the General Counsel, Office of the General Counsel, Federal Maritime Commission, 800 North Capitol Street NW., Washington, DC 20573.
(3) In the event that any subpoena, demand, or request is sought to be delivered to a Commission employee (including former employees) other than in the manner prescribed in paragraphs (a)(1) and (2) of this section, such attempted service shall be ineffective. Such employee shall, after consultation with the General Counsel:
(i) Decline to accept the subpoena, demand, or request; or
(ii) Return them to the server under cover of a written communication referring to the procedures prescribed in this part.
(4) Acceptance of such documents by the Office of the General Counsel does not constitute a waiver of any defenses that might otherwise exist with respect to service under the Federal Rules of Civil or Criminal Procedure, or other applicable laws, rules, or regulations.
(b) [Reserved]
§ 503.41 Procedure when testimony or production of documents is sought.
The Commission shall follow the procedures set forth in this part.
(a) If oral testimony is sought by a demand in any case or matter in which the United States is not a party, an affidavit, or, if that is not feasible, a statement by the party seeking the testimony or by his attorney, setting forth a summary of the testimony sought and its relevance to the proceeding, must be furnished to the Commission. Any authorization for testimony by a present or former employee of the Commission shall be limited to the scope of the demand as summarized in such statement.
(b) When information other than oral testimony is sought by a demand, the Commission shall request a summary of the information sought and its relevance to the proceeding.
(c) Permission to testify or to release documents in all cases will be limited to matters outlined in the affidavit or declaration described in § 503.41(a) and (b), or to such matters as deemed appropriate by the Commission. If the Commission, in considering the factors in § 503.39, allows the release of documents or testimony to be given by an employee, arrangements shall be made for the taking of testimony or receipt of documents by the method least disruptive to the employee’s official duties. Testimony may, for example, be provided by affidavits, answers to interrogatories, written depositions, or depositions transcribed, recorded, or preserved by any other means allowable by law.
(d) Upon issuance of a final determination to not authorize testimony or release of Commission information by the Commission, the party or the party’s counsel seeking testimony or documents may consult or negotiate with the Commission to refine and limit the demand.
§ 503.42 Fees.
(a) Generally. The Commission may condition the production of records or appearance for testimony upon advance payment of a reasonable estimate of the costs to the Commission.
(b) Fees for records. Fees for producing records will include fees for searching, reviewing, and duplicating records, costs of attorney time spent in reviewing the demand or request, and expenses generated by materials and equipment used to search for, produce, and copy the responsive information. Costs for employee time will be calculated on the basis of the hourly pay of the employee (including all pay, allowance, and benefits). Fees for duplication will be the same as those charged by the Commission in its regulations at subpart F of this part.
(c) Witness fees. Fees for attendance by a witness will include fees, expenses, and allowances prescribed by the court’s rules. If no such fees are prescribed, witness fees will be determined based upon the rule of the Federal district court closest to the location where the witness will appear. Such fees will include cost of time spent by the witness to prepare for testimony, in travel, and for attendance at the legal proceeding.
(d) Payment of fees. The seeking party must pay witness fees for current Commission employees and any records certification fees by submitting to the General Counsel a check or money order for the appropriate amount made payable to the Treasury of the United States. In the case of testimony by former Commission employees, applicable fees must be paid directly to the former employee in accordance with 28 U.S.C. 1821, per diem and mileage, or other applicable statutes.
(e) Certification (authentication) of copies of records. The Commission may certify that records are true copies in order to facilitate their use as evidence. If certified records are sought, the request for certified copies shall be made at least 45 days before the date they will be needed. The request should be sent to the General Counsel. Fees for certification will be the same as those charged by the Commission in its regulations at subpart F of this part.
(f) Waiver or reduction of fees. The Commission may, upon a showing of reasonable cause, waive or reduce any fees in connection with testimony, production, or certification of records.
(g) De minimis fees. Fees will not be assessed if the total charge would be $10.00 or less.
Subpart F – Fees
§ 503.48 Policy and services available.
Pursuant to policies established by Congress, the Government’s costs for services provided to identifiable persons are to be recovered by the payment of fees (Independent Offices Appropriations Act, 31 U.S.C. 9701 and Freedom of Information Reform Act of 1986, October 27, 1986, 5 U.S.C. 552). Except as otherwise noted, it is the general policy of the Commission not to waive or reduce service and filing fees contained in this chapter. In extraordinary situations, the Commission will accept requests for waivers or fee reductions. Such requests are to be made to the Secretary of the Commission at the time of the information request or the filing of documents and must demonstrate that the waiver or reduction of a fee is in the best interest of the public, or that payment of a fee would impose an undue hardship. The Secretary will notify the requestor of the decision to grant or deny the request for waiver or reduction.
(a) Upon request, the following services are available upon the payment of the fees hereinafter prescribed; except that no fees shall be assessed for search, duplication or review in connection with requests for single copies of materials described in §§ 503.11 and 503.21:
(1) Records/documents search.
(2) Duplication of records/documents.
(3) Review of records/documents.
(4) Certification of copies of records/documents.
(b) Fees shall also be assessed for the following services provided by the Commission:
(1) Placing one’s name, as an interested party, on the mailing list of a docketed proceeding.
(2) Processing nonattorney applications to practice before the Commission.
§ 503.49 Payment of fees and charges.
The fees charged for special services may be paid through the mail by check, draft, or postal money order, payable to the Federal Maritime Commission, except for charges for transcripts of hearings. Transcripts of hearings, testimony and oral argument are furnished by a nongovernmental contractor, and may be purchased directly from the reporting firm.
§ 503.50 Fees for services.
(a) Definitions. The following definitions apply to the terms when used in this subpart:
(1) Search means all time spent looking for material that is responsive to a request, including page-by-page or line-by-line identification of material within documents. Search for material will be done in the most efficient and least expensive manner so as to minimize costs for both the agency and the requester. Search is distinguished, moreover, from review of material in order to determine whether the material is exempt from disclosure. Searches may be done manually or by computer using existing programming.
(2) Duplication means the process of making a copy of a document necessary to respond to a Freedom of Information Act or other request. Such copies can take the form of paper or machine readable documentation (e.g., magnetic tape or disk), among others.
(3) Review means the process of examining documents located in response to a commercial use request to determine whether any portion of any document located is permitted to be withheld. It also includes processing any documents for disclosure, e.g., doing all that is necessary to excise them and otherwise prepare them for release. Review does not include time spent resolving general legal or policy issues regarding the application of exemptions.
(4) Commercial use request means a request from or on behalf of one who seeks information for a use or purpose that furthers the commercial, trade, or profit interests of the requester or the person on whose behalf the request is made. In determining whether a requester properly belongs in this category, the agency must determine the use to which a requester will put the documents requested. Where the agency has reasonable cause to doubt the use to which a requester will put the records sought, or where that use is not clear from the request itself, the agency will seek additional clarification before assigning the request to a specific category.
(5) Educational institution means a preschool, a public or private elementary or secondary school, an institution of graduate higher education, an institution of undergraduate higher education, an institution of professional education, and an institution of vocational education, which operates a program or programs of scholarly research.
(6) Non-commercial scientific institution means an institution that is not operated on a commercial basis as that term is referenced in paragraph (a)(4) of this section, and which is operated solely for the purpose of conducting scientific research the results of which are not intended to promote any particular product or industry.
(7) Representative of the news media means any person actively gathering news for an entity that is organized and operated to publish or broadcast news to the public. The term news means information that is about current events or that would be of current interest to the public. Examples of news media entities include television or radio stations broadcasting to the public at large, and publishers of periodicals (but only in those instances when they can qualify as disseminators of news) who make their products available for purchase or subscription by the general public. These examples are not intended to be all-inclusive. As traditional methods of news delivery evolve (e.g., electronic dissemination of newspapers through telecommunications services), such alternative media would be included in this category. Freelance journalists, may be regarded as working for a news organization if they can demonstrate a solid basis for expecting publication through that organization, even though not actually employed by it. A publication contract would be the clearest proof, but the agency may also look to the past publication record of a requester in making this determination.
(8) Direct costs means those expenditures which the agency actually incurs in searching for and duplicating (and in the case of commercial requester, reviewing) documents to respond to a Freedom of Information Act (“FOIA”) request. Direct costs include, for example, the salary of the employee performing the work (the basic rate of pay for the employee plus 17.5 percent of that rate to cover benefits) and the cost of operating duplicating machinery. Not included in direct costs are overhead expenses such as costs of space, and heating or lighting the facility in which the records are stored.
(b) General. (1) The basic fees set forth in paragraph (c) of this section provide for documents to be mailed with postage prepaid. If copy is to be transmitted by registered, certified, air, or special delivery mail, postage therefor will be added to the basic fee. Also, if special handling or packaging is required, costs thereof will be added to the basic fee.
(2) The fees for search, duplication and review set forth in paragraph (c) of this section reflect the full allowable direct costs expected to be incurred by the agency for the service. Costs of search and review may be assessed even if it is determined that disclosure of the records is to be withheld. Cost of search may be assessed even if the agency fails to locate the records. Requesters much reasonably describe the records sought. The following restrictions, limitations and guidelines apply to the assessment of such fees:
(i) For commercial use requesters, charges recovering full direct costs for search, review and duplication of records will be assessed.
(ii) For educational and non-commercial scientific institution requesters, no charge will be assessed for search or review of records. Charges recovering full direct costs for duplication of records will be assessed, excluding charges for the first 100 pages. To be eligible for inclusion in this category, requesters must show that the request is being made under the auspices of a qualifying institution and that the records are not sought for a commercial use, but are sought in furtherance of scholarly (if the request is from an educational institution) or scientific (if the request is from a non-commercial scientific institution) research.
(iii) For representative of the news media requesters, no charge will be assessed for search or review of records. Charges recovering full direct costs for duplication of records will be assessed, excluding charges for the first 100 pages.
(iv) For all other requesters, no charge will be assessed for review of records. Charges recovering full direct costs for search and duplication of records will be assessed excluding charges for the first 100 pages of duplication and the first two hours of search time. Requests from individuals for records about themselves, filed in a Commission system of records, will be treated under the fee provisions of the Privacy Act of 1984 which permit fees only for duplication.
(v) No fee may be charged for search, review or duplication if the costs of routine collection and processing of the fee are likely to exceed the amount of the fee.
(vi) Documents shall be furnished without any charge or at a reduced charge if disclosure of the information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester. In determining whether a waiver or reduction of charges is appropriate the following factors will be taken into consideration.
(A) The subject of the request: Whether the subject of the requested records concerns the operations or activities of the government;
(B) The informative value of the information to be disclosed: Whether the disclosure is likely to contribute to an understanding of government operations or activities;
(C) The contribution to an understanding of the subject by the general public likely to result from disclosure: Whether disclosure of the requested information will contribute to public understanding;
(D) The significance of the contribution to public understanding: Whether the disclosure is likely to contribute significantly to public understanding of government operations or activities;
(E) The existence and magnitude of a commercial interest: Whether the requester has a commercial interest that would be furthered by the requested disclosure; and, if so
(F) The primary interest in disclosure: Whether the magnitude of the identified commercial interest of the requester is sufficiently large, in comparison with the public interest in disclosure, that disclosure is primarily in the commercial interest of the requester.
(vii) Whenever it is anticipated that fees chargeable under this section will exceed $25.00 and the requester has not indicated in advance a willingness to pay fees as high as anticipated, the requester will be notified of the amount of the anticipated fee. In such cases the requester will be given an opportunity to confer with Commission personnel with the object of reformulating the request to meet the needs of the requester at a lower cost.
(viii) Interest may be charged record requesters who fail to pay fees assessed. Assessment of interest may begin on the amount billed starting on the 31st day following the day on which the billing was sent. Interest will be at the rate prescribed in section 3717 of title 31 U.S.C., and will accrue from the date of the billings. Receipt of payment by the agency will stay the accrual of interest.
(ix) Whenever it reasonably appears that a requester of records or a group of requesters is attempting to break a request down into a series of requests for the purpose of evading the assessment of fees, such requests will be aggregated and fees assessed accordingly. Multiple requests on unrelated subjects will not be aggregated.
(x) The agency may require a requester to make advance payment only when:
(A) A requester has previously failed to pay a fee charged in a timely fashion (i.e., within 30 days of the date of the billing), in which case the requester will be required to pay the full amount owed plus any applicable interest as provided above, and to make an advance payment of the full amount of the estimated fee before the agency begins to process a new request or a pending request from that requester; or
(B) The agency estimates or determines that allowable charges that a requester may be required to pay are likely to exceed $250, in which case, the agency will notify the requester of the likely cost and obtain satisfactory assurance of full payment where the requester has a history of prompt payment of FOIA fees, or will require an advance payment of an amount up to the full estimated charges in the case of requesters with no history of payment.
(xi) Unless applicable fees are paid, the agency may use the authorities of the Debt Collection Act (Pub. L. 97-365), including disclosure to consumer reporting agencies and use of collection agencies where appropriate to encourage payment.
(xii) Whenever action is taken under paragraphs (b)(2)(viii) and (b)(2)(ix) of this section, the administrative time limits prescribed in subsection (a)(6) of 5 U.S.C. 552 (i.e., 10 working days from receipt of initial requests and 20 working days from receipt of appeals from initial denial, plus permissible extensions of these time limits will begin only after the Commission has received fee payments described above.
(c) Charges for search, review, duplication and certification. (1) Records search (including electronic search) will be performed by Commission personnel at the following rates:
(i) Search will be performed by clerical/administrative personnel at a rate of $39 per hour and by professional/executive personnel at a rate of $77 per hour.
(ii) Unless an exception provided in paragraph (b)(2) of this section applies, the minimum charge for record search is $39.
(2) Charges for review of records to determine whether they are exempt from disclosure under § 503.33 must be assessed to recover full costs at the rate of $108 per hour. Charges for review will be assessed only for initial review to determine the applicability of a specific exemptions to a particular record. No charge will be assessed for review at the administrative appeal level.
(3) Charges for duplication of records and documents will be assessed as follows, limited to size 8
(i) If performed by requesting party at the rate of ten cents per page (one side).
(ii) By Commission personnel, at the rate of ten cents per page (one side) plus $39 per hour.
(iii) Unless an exception provided in paragraph (b)(2) of this section applies, the minimum charge for copying is $7.
(iv) No charge will be made by the Commission for notices, decisions, orders, etc., required by law to be served on a party to any proceeding or matter before the Commission. No charge will be made for single copies of such Commission issuances individually requested in person or by mail.
(4) The certification and validation (with Federal Maritime Commission seal) of documents filed with or issued by the Commission will be available at $111 for each certification.
(d) Applications for admission to practice before the Commission for persons not attorneys at law must be accompanied by a fee of $206 pursuant to § 502.27 of this chapter.
Subpart G – Information Security Program
§ 503.51 Definitions.
(a) Access means the ability or opportunity to gain knowledge of classified information.
(b) Classification means the act or process by which information is determined to be classified information.
(c) Classification guide means a documentary form of instruction or source that prescribes the classification of specific information issued by an original classification authority that identifies the elements of information regarding a specific subject that must be classified and establishes the level and duration of classification for each such element.
(d) Classified national security information (hereafter “classified information”) means information that has been determined pursuant to Executive Order 12958 or any predecessor order in force to require protection against unauthorized disclosure and is marked to indicate its classified status when in documentary form.
(e) Commission means the Federal Maritime Commission.
(f) Declassification means the authorized change in the status of information from classified information to unclassified information.
(g) Derivative classification means the incorporating, paraphrasing, restating or generating in new form information that is already classified, and marking the newly developed material consistent with the classification markings that apply to the source information. Derivative classification includes the classification of information based on classification guidance. The duplication or reproduction of existing classified information is not derivative classification.
(h) Downgrading means a determination by a declassification authority that information classified and safeguarded at a specified level shall be classified and safeguarded at a lower level.
(i) Foreign government information means:
(1) Information provided to the United States Government by a foreign government or governments, an international organization of governments, or any element thereof, with the expectation that the information, the source of the information, or both, are to be held in confidence;
(2) Information produced by the United States pursuant to or as a result of a joint arrangement with a foreign government or governments, or an international organization of governments, or any element thereof, requiring that the information, the arrangement, or both, are to be held in confidence; or
(3) Information received and treated as “Foreign Government Information” under the terms of Executive Order 13526 or any predecessor order.
(j) Mandatory declassification review means the review for declassification of classified information in response to a request for declassification that meets the requirements under section 3.5 of Executive Order 13526.
(k) Multiple sources means two or more source documents, classification guides, or a combination of both.
(l) National security means the national defense or foreign relations of the United States.
(m) Need to know means a determination made by an authorized holder of classified information that a prospective recipient requires access to specific classified information in order to perform or assist in a lawful and authorized governmental function.
(n) Original classification means an initial determination that information requires, in the interest of national security, protection against unauthorized disclosure.
(o) Original classification authority means an individual authorized in writing, either by the President, or by agency heads or other officials designated by the President, to classify information in the first instance.
(p) Self-inspection means the internal review and evaluation of individual Commission activities and the Commission as a whole with respect to the implementation of the program established under Executive Order 13526 and its implementing directives.
(q) Senior agency official means the official designated by the Chairman under section 5.4(d) of Executive Order 13526 to direct and administer the Commission’s program under which classified information is safeguarded.
(r) Source document means an existing document that contains classified information that is incorporated, paraphrased, restated, or generated in new form into a new document.
(s) Unauthorized disclosure means a communication or physical transfer of classified information to an unauthorized recipient.
§ 503.52 Senior agency official.
The Managing Director is designated as Senior Agency Official of the Commission, and shall be responsible for directing, administering and reporting on the Commission’s information security program, which includes oversight (self-inspection) and security information programs to ensure effective implementation of Executive Orders 13526 and 12968 and 32 CFR part 2001.
§ 503.53 Oversight Committee.
An Oversight Committee is established, under the chairmanship of the Senior Agency Official with the following responsibilities:
(a) Establish a Commission security education program to familiarize all personnel who have or may have access to classified information with the provisions of Executive Order 13526 and directives of the Information Security Oversight Office. The program shall include initial, refresher, and termination briefings;
(b) Establish controls to ensure that classified information is used, processed, stored, reproduced, and transmitted only under conditions that will provide adequate protection and prevent access by unauthorized persons;
(c) Act on all suggestions and complaints concerning the Commission’s information security program;
(d) Recommend appropriate administrative action to correct abuse or violations of any provision of Executive Order 13526; and
(e) Consider and decide other questions concerning classification and declassification that may be brought before it.
§ 503.54 Original classification.
(a) No Commission Member or employee has the authority to originally classify information.
(b) If a Commission Member or employee develops information that appears to require classification, or receives any foreign government information as defined in section 6.1(s) of Executive Order 13526, the Member or employee shall immediately notify the Senior Agency Official and appropriately protect the information.
(c) If the Senior Agency Official believes the information warrants classification, it shall be sent to the appropriate agency with original classification authority over the subject matter, or to the Information Security Oversight Office, for review and a classification determination.
(d) If there is reasonable doubt about the need to classify information, it shall be safeguarded as if it were classified pending a determination by an original classification authority. If there is reasonable doubt about the appropriate level of classification, it shall be safeguarded at the higher level of classification pending a determination by an original classification authority.
§ 503.55 Derivative classification.
(a) In accordance with Part 2 of Executive Order 13526 and directives of the Information Security Oversight Office, the incorporation, paraphrasing, restating or generation in new form of information that is already classified, and the marking of newly developed material consistent with the classification markings that apply to the source information, is derivative classification.
(1) Derivative classification includes the classification of information based on classification guidance.
(2) The duplication or reproduction of existing classified information is not derivative classification.
(b) Members or employees applying derivative classification markings shall:
(1) Observe and respect original classification decisions; and
(2) Carry forward to any newly created documents the pertinent classification markings.
(3) For information derivatively classified based on multiple sources, the Member or employee shall carry forward:
(i) The date or event for declassification that corresponds to the longest period of classification among the sources; and
(ii) A listing of these sources on or attached to the official file or record copy.
(c) Documents classified derivatively shall bear all markings prescribed by 32 CFR 2001.20 through 2001.23 and shall otherwise conform to the requirements of 32 CFR 2001.20 through 2001.23.
(1) Classification authority. The authority for classification shall be shown as follows:
(i) “Classified by (description of source documents or classification guide),” or
(ii) “Classified by multiple sources,” if a document is classified on the basis of more than one source document or classification guide.
(iii) In these cases, the derivative classifier shall maintain the identification of each source with the file or record copy of the derivatively classified document. A document derivatively classified on the basis of a source document that is marked “Classified by Multiple Sources” shall cite the source document in its “Classified by” line rather than the term “Multiple sources.”
(2) Declassification and downgrading instructions. Date or events for automatic declassification or downgrading, or the notation “Originating Agency’s Determination Required” to indicate that the document is not to be declassified automatically, shall be carried forward from the source document, or as directed by a classification guide, and shown on “declassify on” line as follows:
“Declassify on: (date, description of event);” or “Originating Agency’s Determination Required (OADR).”
§ 503.56 General declassification and downgrading policy.
(a) The Commission exercises declassification and downgrading authority in accordance with section 3.1 of Executive Order 13526, only over that information originally classified by the Commission under previous Executive Orders. Declassification and downgrading authority may be exercised by the Commission Chairman and the Senior Agency Official, and such others as the Chairman may designate. Commission personnel may not declassify information originally classified by other agencies.
(b) The Commission does not now have original classification authority nor does it have in its possession any documents that it originally classified when it had such authority. The Commission has authorized the Archivist of the United States to automatically declassify information originally classified by the Commission and under its exclusive and final declassification jurisdiction at the end of 20 years from the date of original classification.
§ 503.57 Mandatory review for declassification.
(a) Reviews and referrals in response to requests for mandatory declassification shall be conducted in compliance with section 3.5 of Executive Order 13526, 32 CFR 2001.33, and 32 CFR 2001.34.
(b) Any individual may request a review of classified information and material in possession of the Commission for declassification. All information classified under Executive Order 13526 or a predecessor Order shall be subject to a review for declassification by the Commission, if:
(1) The request describes the documents or material containing the information with sufficient specificity to enable the Commission to locate it with a reasonable amount of effort. Requests with insufficient description of the material will be returned to the requester for further information.
(2) The information requested is not the subject of pending litigation.
(3) The information requested has not been reviewed for declassification in the previous two years. If so, the FMC shall inform the requester of this fact and provide the requester with appeal rights in accordance with 32 CFR 2001.33(a)(2)(iii).
(c) Requests shall be in writing, and shall be sent to: Office of the Managing Director, Attn.: Senior Agency Official, Federal Maritime Commission, Washington, DC 20573 or submitted via the FMC’s on-line declassification information portal which provides an e-mail address through which requests can be submitted: http://www.http://www.fmc.gov/about/web_policies_notices_and_acts.aspx.
(d) If the request requires the provision of services by the Commission, fair and equitable fees may be charged pursuant to 31 U.S.C. 9701.
(e) Requests for mandatory declassification reviews shall be acknowledged by the Commission within 15 days of the date of receipt of such requests.
(f) If the document was derivatively classified by the Commission or originally classified by another agency, the request, the document, and a recommendation for action shall be forwarded to the agency with the original classification authority. The Commission may, after consultation with the originating agency, inform the requester of the referral.
(g) If a document is declassified in its entirety, it may be released to the requester, unless withholding is otherwise warranted under applicable law. If a document or any part of it is not declassified, the Senior Agency Official shall furnish the declassified portions to the requester unless withholding is otherwise warranted under applicable law, along with a brief statement concerning the reasons for the denial of the remainder, and the right to appeal that decision to the Commission appellate authority within 60 days.
(h) If a declassification determination cannot be made within 45 days, the requester shall be advised that additional time is needed to process the request. Final determination shall be made within one year from the date of receipt of the request. The Commission shall inform the requester in writing of the final determination and of the reasons for any denials. The Commission shall inform the requester in writing of his or her final appeal rights to the Interagency Security Classification Appeals Panel.
(i) When a request has been submitted both under mandatory declassification review and the Freedom of Information Act (FOIA), the agency shall require the requester to select one process or the other. If the requester fails to select one process or the other, the request will be treated as a FOIA request unless the requested materials are subject only to mandatory declassification review.
§ 503.58 Appeals of denials of mandatory declassification review requests.
(a) Within 60 days after the receipt of denial of a request for mandatory declassification review, the requester may submit an appeal in writing to the Chairman through the Secretary, Federal Maritime Commission, Washington, DC 20573. The appeal shall:
(1) Identify the document in the same manner in which it was identified in the original request;
(2) Indicate the dates of the request and denial, and the expressed basis for the denial; and
(3) State briefly why the document should be declassified.
(b) The Chairman shall rule on the appeal within 60 working days of receiving it. If additional time is required to make a determination, the Chairman shall notify the requester of the additional time needed and provide the requester with the reason for the extension. The Chairman shall notify the requester in writing of the final determination and the reasons for any denial.
(c) In accordance with section 5.3 of Executive Order 13526 and 32 CFR 2001.33, within 60 days of such issuance, the requester may appeal a final determination of the Commission under paragraph (b) of this section to the Interagency Security Classification Appeals Panel. The appeal should be addressed to, Executive Secretary, Interagency Security Classification Appeals Panel, Attn: Classification Challenge Appeals, c/o Information Security Oversight Office, National Archives and Records Administration, 7th and Pennsylvania Avenue, NW., Room 5W, Washington, DC 20408.
§ 503.59 Safeguarding classified information.
(a) All classified information shall be afforded a level of protection against unauthorized disclosure commensurate with its level of classification.
(b) Whenever classified material is removed from a storage facility, such material shall not be left unattended and shall be protected by attaching an appropriate classified document cover sheet to each classified document.
(c) Classified information being transmitted from one Commission office to another shall be protected with a classified document cover sheet and hand delivered by an appropriately cleared person to another appropriately cleared person.
(d) Classified information shall be made available to a recipient only when the authorized holder of the classified information has determined that:
(1) The prospective recipient has a valid security clearance at least commensurate with the level of classification of the information; and
(2) The prospective recipient requires access to the information in order to perform or assist in a lawful and authorized governmental function.
(e) The requirement in paragraph (d)(2) of this section, that access to classified information may be granted only to individuals who have a need-to-know the information, may be waived for persons who:
(1) Are engaged in historical research projects, or
(2) Previously have occupied policy-making positions to which they were appointed by the President.
(f) Waivers under paragraph (e) of this section may be granted when the Commission Senior Agency Official:
(1) Determines in writing that access is consistent with the interest of national security;
(2) Takes appropriate steps to protect classified information from unauthorized disclosure or compromise, and ensures that the information is properly safeguarded; and
(3) Limits the access granted to former presidential appointees to items that the person originated, reviewed, signed, or received while serving as a presidential appointee.
(g) Persons seeking access to classified information in accordance with paragraphs (e) and (f) of this section must agree in writing:
(1) To be subject to a national security check;
(2) To protect the classified information in accordance with the provisions of Executive Order 13526; and
(3) Not to publish or otherwise reveal to unauthorized persons any classified information.
(h) Except as authorized by the originating agency, or otherwise provided for by directives issued by the President, the Commission shall not disclose information originally classified by another agency.
(i) Only appropriately cleared personnel may receive, transmit, and maintain current access and accountability records for classified material.
(j) Each office which has custody of classified material shall maintain:
(1) A classified document register or log containing a listing of all classified holdings, and
(2) A classified document destruction register or log containing the title and date of all classified documents that have been destroyed.
(k) An inventory of all documents classified higher than confidential shall be made at least annually and whenever there is a change in classified document custodians. The Senior Agency Official shall be notified, in writing, of the results of each inventory.
(l) Reproduced copies of classified documents are subject to the same accountability and controls as the original documents.
(m) Combinations to dial-type locks shall be changed only by persons having an appropriate security clearance, and shall be changed whenever such equipment is placed in use; whenever a person knowing the combination no longer requires access to the combination; whenever a combination has been subject to possible compromise; whenever the equipment is taken out of service; and at least once each year. Records of combinations shall be classified no lower than the highest level of classified information to be stored in the security equipment concerned. One copy of the record of each combination shall be provided to the Senior Agency Official.
(n) Individuals charged with the custody of classified information shall conduct the necessary inspections within their areas to insure adherence to procedural safeguards prescribed to protect classified information. The Commission Senior Agency Official shall conduct periodic inspections to determine if the procedural safeguards prescribed in this subpart are in effect at all times.
(o) Whenever classified material is to be transmitted outside the Commission, the custodian of the classified material shall contact the Commission Senior Agency Official for preparation and receipting instructions. If the material is to be hand carried, the Senior Agency Official shall ensure that the person who will carry the material has the appropriate security clearance, is knowledgeable of safeguarding requirements, and is briefed, if appropriate, concerning restrictions with respect to carrying classified material on commercial carriers.
(p) Any person having access to and possession of classified information is responsible for protecting it from persons not authorized access to it, to include securing it in approved equipment or facilities, whenever it is not under the direct supervision of authorized persons.
(q) Employees of the Commission shall be subject to appropriate sanctions, which may include reprimand, suspension without pay, removal, termination of classification authority, loss or denial of access to classified information, or other sanctions in accordance with applicable law and agency regulation, if they:
(1) Knowingly, willfully, or negligently disclose to unauthorized persons information properly classified under Executive Order 13526 or predecessor orders;
(2) Knowingly and willfully classify or continue the classification of information in violation of Executive Order 13526 or any implementing directive; or
(3) Knowingly and willfully violate any other provision of Executive Order 13526 or implementing directive.
(r) Any person who discovers or believes that a classified document is lost or compromised shall immediately report the circumstances to his or her supervisor and the Commission Senior Agency Official, who shall conduct an immediate inquiry into the matter.
(s) Questions with respect to the Commission Information Security Program, particularly those concerning the classification, declassification, downgrading, and safeguarding of classified information, shall be directed to the Commission Senior Agency Official.
Subpart H – Access to Any Record of Identifiable Personal Information
§ 503.60 Definitions.
(a) Agency means each authority of the government of the United States as defined in 5 U.S.C. 551(1) and shall include any executive department, military department, government corporation, government controlled corporation or other establishment in the executive branch of the government (including the Executive Office of the President), or any independent regulatory agency.
(b) Commission means the Federal Maritime Commission.
(c) Individual means a citizen of the United States or an alien lawfully admitted for permanent residence to whom a record pertains.
(d) Maintain includes maintain, collect, use, or disseminate.
(e) Person means any person not an individual and shall include, but is not limited to, corporations, associations, partnerships, trustees, receivers, personal representatives, and public or private organizations.
(f) Record means any item, collection, or grouping of information about an individual that is maintained by the Federal Maritime Commission, including but not limited to a person’s education, financial transactions, medical history, and criminal or employment history, and that contains the person’s name, or the identifying number, symbol or other identifying particular assigned to the individual, such as a finger or voice print, or a photograph.
(g) Routine use means [with respect to the disclosure of a record], the use of such records for a purpose which is compatible with the purpose for which it was collected.
(h) Statistical record means a record in a system of records, maintained for statistical research or reporting purposes only and not used in whole or in part in making any determination about an identifiable individual, but shall not include matter pertaining to the Census as defined in 13 U.S.C. 8.
(i) System of records means a group of any records under the control of the Commission from which information is retrieved by the name of the individual or by some identifying number, symbol or other identifying particular assigned to the individual.
§ 503.61 Conditions of disclosure.
(a) Subject to the conditions of paragraphs (b) and (c) of this section, the Commission shall not disclose any record which is contained in a system of records, by any means of communication, to any person or other agency who is not an individual to whom the record pertains.
(b) Upon written request or with prior written consent of the individual to whom the record pertains, the Commission may disclose any such record to any person or other agency.
(c) In the absence of a written consent from the individual to whom the record pertains, the Commission may disclose any such record, provided such disclosure is:
(1) To those officers and employees of the Commission who have a need for the record in the performance of their duties;
(2) Required under the Freedom of Information Act (5 U.S.C 552);
(3) For a routine use;
(4) To the Bureau of Census for purposes of planning or carrying out a census or survey or related activity under the provisions of title 13 U.S.C.;
(5) To a recipient who has provided the Commission with adequate advance written assurance that the record will be used solely as a statistical research or reporting record, and the record is to be transferred in a form that is not individually identifiable;
(6) To the National Archives of the United States, as a record which has sufficient historical or other value to warrant its continued preservation by the United States government, or for evaluation by the Administrator of General Services or his designee to determine whether the record has such value; –
(7) To another agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity authorized by law, provided the head of the agency or instrumentality has made a prior written request to the Secretary of the Commission specifying the particular record and the law enforcement activity for which it is sought;
(8) To either House of Congress, and to the extent of a matter within its jurisdiction, any committee, subcommittee, or joint committee of Congress;
(9) To the Comptroller General, or any authorized representative, thereof, in the course of the performance of the duties of the GAO; or
(10) Under an order of a court of competent jurisdiction.
§ 503.62 Accounting of disclosures.
(a) The Secretary shall make an accounting of each disclosure of any record contained in a system of records in accordance with 5 U.S.C. 552a(c)(1) and 552a(c)(2).
(b) Except for a disclosure made under § 503.61(c)(7), the Secretary shall make the accounting described in paragraph (a) of this section available to any individual upon written request made in accordance with § 503.63(b) or § 503.63(c).
(c) The Secretary shall make reasonable efforts to notify the individual when any record which pertains to such individual is disclosed to any person under compulsory legal process, when such process becomes a matter of public record.
§ 503.63 Request for information.
(a) Upon request, in person or by mail, made in accordance with the provisions of paragraph (b) or (c) of this section, any individual shall be informed whether or not any Commission system of records contains a record pertaining to him or her.
(b) Any individual requesting such information in person shall personally appear at the Office of the Secretary, Federal Maritime Commission, 800 North Capitol Street, NW, Washington, DC 20573 and shall:
(1) Provide information sufficient, in the opinion of the Secretary, to identify the record, e.g., the individual’s own name, date of birth, place of birth, etc.;
(2) Provide identification acceptable to the Secretary to verify the individual’s identity, e.g., driver’s license, employee identification card or medicare card;
(3) Complete and sign the appropriate form provided by the Secretary.
(c) Any individual requesting such information by mail shall address such request to the Secretary, Federal Maritime Commission, 800 North Capitol Street, NW, Washington, DC 20573 and shall include in such request the following:
(1) Information sufficient in the opinion of the Secretary to identify the record, e.g., the individual’s own name, date of birth, place of birth, etc.;
(2) A signed notarized statement to verify his or her identity.
§ 503.64 Commission procedure on request for information.
Upon request for information made in accordance with § 503.63, the Secretary or his or her delegate shall, within 10 days (excluding Saturdays, Sundays, and legal public holidays), furnish in writing to the requesting party notice of the existence or nonexistence of any records described in such request.
§ 503.65 Request for access to records.
(a) General. Upon request by any individual made in accordance with the procedures set forth in paragraph (b) of this section, such individual shall be granted access to any record pertaining to him or her which is contained in a Commission system of records. However, nothing in this section shall allow an individual access to any information compiled by the Commission in reasonable anticipation of a civil or criminal action or proceeding.
(b) Procedures for requests for access to records. Any individual may request access to a record pertaining to him or her in person or by mail in accordance with paragraphs (b) (1) and (2) of this section:
(1) Any individual making such request in person shall do so at the Office of the Secretary, Federal Maritime Commission, 800 North Capitol Street, NW, Washington, DC 20573 and shall:
(i) Provide identification acceptable to the Secretary to verify the individual’s identity, e.g., driver’s license, employee identification card, or medicare card; and
(ii) Complete and sign the appropriate form provided by the Secretary.
(2) Any individual making a request for access to records by mail shall address such request to the Secretary, Federal Maritime Commission, 800 North Capitol Street, NW, Washington, DC 20573 and shall include therein a signed, notarized statement to verify his or her identity.
(3) Any individual requesting access to records under this section in person may be accompanied by a person of his or her own choosing, while reviewing the record requested. If an individual elects to be so accompanied, he or she shall notify the Secretary of such election in the request and shall provide a written statement authorizing disclosure of the record in the presence of the accompanying person. Failure to so notify the Secretary in a request for access shall be deemed to be a decision by the individual not to be accompanied.
(c) Commission determination of requests for access. (1) Upon request made in accordance with this section, the Secretary or his or her delegate shall:
(i) Determine whether or not such request shall be granted;
(ii) Make such determination and provide notification within 10 days (excluding Saturdays, Sundays, and legal public holidays) after receipt of such request, and, if such request is granted shall:
(iii) Notify the individual that fees for reproducing copies will be made in accordance with § 503.69.
(2) If access to a record is denied because such information has been compiled by the Commission in reasonable anticipation of a civil or criminal action or proceeding, or for any other reason, the Secretary shall notify the individual of such determination and his or her right to judicial appeal under 5 U.S.C. 552a(g).
(d) Manner of providing access. (1) If access is granted, the individual making such request shall notify the Secretary whether the records requested are to be copied and mailed to the individual.
(2) If records are to be made available for personal inspection, the individual shall arrange with the Secretary a mutually agreeable time and place for inspection of the record.
(3) Fees for reproducing and mailing copies of records will be made in accordance with § 503.69.
§ 503.66 Amendment of a record.
(a) General. Any individual may request amendment of a record pertaining to him or her according to the procedure in paragraph (b) of this section.
(b) Procedures for requesting amendment of a record. After inspection of a record pertaining to him or her, an individual may file with the Secretary a request, in person or by mail, for amendment of a record. Such request shall specify the particular portions of the record to be amended, the desired amendments and the reasons therefor.
(c) Commission procedures on request for amendment of a record. (1) Not later than ten (10) days (excluding Saturdays, Sundays, and legal public holidays) after the date of receipt of a request made in accordance with this section to amend a record in whole or in part, the Secretary or his or her delegate shall:
(i) Make any correction of any portion of the record which the individual believes is not accurate, relevant, timely or complete and thereafter inform the individual of such correction; or
(ii) Inform the individual, by certified mail, return receipt requested, of refusal to amend the record, setting out the reasons therefor, and notify the individual of his or her right to appeal that determination to the Chairman of the Commission under § 503.67.
(2) The Secretary shall inform any person or other agency to whom a record has been disclosed of any correction or notation of dispute made by the Secretary with respect to such records, in accordance with 5 U.S.C. 552a(c)(4) referring to amendment of a record, if an accounting of such disclosure has been made.
§ 503.67 Appeals from denial of request for amendment of a record.
(a) General. An individual whose request for amendment of a record pertaining to him or her is denied, may further request a review of such determination in accordance with paragraph (b) of this section.
(b) Procedure for appeal. Not later than thirty (30) days (excluding Saturdays, Sundays, and legal public holidays) following receipt of notification of refusal to amend, an individual may file an appeal to amend the record. Such appeal shall:
(1) Be addressed to the Chairman, Federal Maritime Commission, 800 North Capitol Street, NW, Washington, DC 20573; and
(2) Specify the reasons for which the refusal to amend is challenged.
(c) Commission procedure on appeal. (1) Upon appeal from a denial to amend a record, the Chairman of the Commission or the officer designated by the Chairman to act in his or her absence, shall make a determination whether or not to amend the record and shall notify the individual of that determination by certified mail, return receipt requested, not later than thirty (30) days (excluding Saturdays, Sundays and legal public holidays) after receipt of such appeal, unless extended pursuant to paragraph (d) of this section.
(2) The Chairman shall also notify the individual of the provisions of 5 U.S.C. 552a(g)(1)(A) regarding judicial review of the Chairman’s determination.
(3) If, on appeal, the refusal to amend the record is upheld, the Commission shall permit the individual to file a statement setting forth the reasons for disagreement with the Commission’s determination.
(d) The Chairman, or his or her delegate in his or her absence, may extend up to thirty (30) days the time period prescribed in paragraph (c)(1) of this section within which to make a determination on an appeal from refusal to amend a record for the reasons that a fair and equitable review cannot be completed within the prescribed time period.
§ 503.68 Exemptions.
(a) The system of records designated FMC-25 Inspector General File is exempt from the provisions of 5 U.S.C. 552a except subsections (b), (c) (1) and (2), (e)(4) (A) through (F), (e) (6), (7), (9), (10), and (11) and (i) to the extent it contains information meeting the criteria of 5 U.S.C. 552a(j)(2) pertaining to the enforcement of criminal laws. Exemption is appropriate to avoid compromise of ongoing investigations, disclosure of the identity of confidential sources and unwarranted invasions of personal privacy of third parties.
(b) The following systems of records are exempt from the provisions of 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4) (G), (H) and (I) and (f), which otherwise require the Commission, among other things, to provide the individual named in the records an accounting of disclosures and access to and opportunity to amend the records. The scope of the exemptions and the reasons therefor are described for each particular system of records.
(1) FMC-1 Personnel Security File. All information about individuals that meets the criteria of 5 U.S.C. 552a(k)(5), regarding suitability, eligibility or qualifications for Federal civilian employment or for access to classified information, to the extent that disclosure would reveal the identity of a source who furnished information to the Commission under a promise of confidentiality. Exemption is required to honor promises of confidentiality.
(2) FMC-7 Licensed Ocean Freight Forwarders File. All information that meets the criteria of 5 U.S.C. 552a(k)(2) regarding investigatory materials compiled for law enforcement purposes. Exemption is appropriate to avoid compromise of ongoing investigations, disclosure of the identity of confidential sources and unwarranted invasions of personal privacy of third parties.
(3) FMC-22 Investigatory Files. All information that meets the criteria of 5 U.S.C. 552a(k)(2) regarding investigatory material compiled for law enforcement purposes. Exemption is appropriate to avoid compromise of ongoing investigations, disclosure of the identity of confidential sources and unwarranted invasions of personal privacy of third parties.
(4) FMC-24 Informal Inquiries and Complaint Files. All information that meets the criteria of 5 U.S.C. 552a(k)(2) regarding investigatory material compiled for law enforcement purposes. Exemption is appropriate to avoid compromise of ongoing investigations, disclosure of the identity of confidential sources and unwarranted invasion of personal privacy of third parties.
(5) FMC-25 Inspector General File. (i) All information that meets the criteria of 5 U.S.C. 552a(k)(2) regarding investigatory material compiled for law enforcement purposes. Exemption is appropriate to avoid compromise of ongoing investigations, disclosure of the identity of confidential sources and unwarranted invasions of personal privacy of third parties.
(ii) All information about individuals that meets the criteria of 5 U.S.C. 552a(k)(5), regarding suitability, eligibility or qualifications for Federal civilian employment or for access to classified information, to the extent the disclosure would reveal the identity of a source who furnished information to the Commission under the promises of confidentiality. Exemption is required to honor promises of confidentiality.
(6) FMC-26 Administrative Grievance File. (i) All information that meets the criteria of 5 U.S.C. 552a(k)(2) regarding investigatory material compiled for law enforcement purposes, Exemption is appropriate to avoid compromise of ongoing investigations, disclosure of the identity of confidential sources and unwarranted invasions of personal privacy of third parties.
(ii) All information about individuals that meets the criteria of 5 U.S.C. 552a(k)(5), regarding suitability, eligibility or qualification for Federal civilian employment or for access to classified information, to the extent that disclosure would reveal the identity of a source who furnished information to the Commission under a promise of confidentiality. Exemption is required to honor promises of confidentiality.
§ 503.69 Fees.
(a) General. The following Commission services are available, with respect to requests made under the provisions of this subpart, for which fees will be charged as provided in paragraphs (b) and (c) of this section:
(1) Copying records/documents.
(2) Certification of copies of documents.
(b) Fees for services. The fees set forth below provide for documents to be mailed with ordinary first-class postage prepaid. If a copy is to be transmitted by registered, certified, air, or special delivery mail, postage therefor will be added to the basic fee. Also, if special handling or packaging is required, costs thereof will be added to the basic fee.
(1) The copying of records and documents will be available at the rate of ten cents per page (one side), limited to size 8
(2) The certification and validation (with Federal Maritime Commission seal) of documents filed with or issued by the Commission will be available at $111 for each certification.
(c) Payment of fees and charges. The fees charged for special services may be paid by check, draft, or postal money order, payable to the Federal Maritime Commission.
Subpart I – Public Observation of Federal Maritime Commission Meetings and Public Access to Information Pertaining to Commission Meetings
§ 503.70 Policy.
It is the policy of the Federal Maritime Commission, under the Provisions of the “Government in the Sunshine Act” (5 U.S.C. 552b, Sept. 13, 1976) to entitle the public to the fullest practicable information regarding the decisional processes of the Commission. The provisions of this subpart set forth the procedural requirements designed to provide the public with such information while continuing to protect the rights of individuals and to maintain the capabilities of the Commission in carrying out its responsibilities under the shipping statutes administered by this Commission.
§ 503.71 Definitions.
The following definitions apply for purposes of this subpart:
(a) Agency means the Federal Maritime Commission;
(b) Information pertaining to a meeting means, but is not limited to the following: the record of any agency vote taken under the provisions of this subpart, and the record of the vote of each member; a full written explanation of any agency action to close any portion of any meeting under this subpart; lists of persons expected to attend any meeting of the agency and their affiliation; public announcement by the agency under this subpart of the time, place, and subject matter of any meeting or portion of any meeting; announcement of whether any meeting or portion of any meeting shall be open to public observation or be closed; any announcement of any change regarding any meeting or portion of any meeting; and the name and telephone number of the Secretary of the agency who shall be designated by the agency to respond to requests for information concerning any meeting or portion of any meeting;
(c) Meeting means the deliberations of a majority of the members serving on the agency which determine or result in the joint conduct of or disposition of official agency business, but does not include:
(1) Individual member’s consideration of official agency business circulated to the members in writing for disposition on notation;
(2) Deliberations by the agency in determining whether or not to close a portion or portions of a meeting or series of meetings as provided in §§ 503.74 and 503.75;
(3) Deliberations by the agency in determining whether or not to withhold from disclosure information pertaining to a portion or portions of a meeting or series of meetings as provided in § 503.80; or
(4) Deliberations pertaining to any change in any meeting or to changes in the public announcement of such a meeting as provided in § 503.83;
(d) Member means each individual Commissioner of the agency;
(e) Person means any individual, partnership, corporation, association, or public or private organization, other than an agency as defined in 5 U.S.C. 551(1));
(f) Series f meetings means more than one meeting involving the same particular matters and scheduled to be held no more than thirty (30) days after the initial meeting in such series.
§ 503.72 General rule – meetings.
(a) Except as otherwise provided in §§ 503.73, 503.74, 503.75, 503.76, and 503.84, every portion of every meeting and every portion of a series of meetings of the agency shall be open to public observation.
(b) The opening of a portion or portions of a meeting or a portion or portions of a series of meetings to public observation shall not be construed to include any participation by the public in any manner in the meeting. Such an attempted participation or participation shall be cause for removal of any person so engaged at the discretion of the presiding member of the agency.
§ 503.73 Exceptions – meetings.
Except in a case where the agency finds that the public interest requires otherwise, the provisions of § 503.72(a) shall not apply to any portion or portions of an agency meeting or portion or portions of a series of meetings where the agency determined under the provisions of § 503.74 or § 503.75 that such portion or portions of such meeting or series of meetings is likely to:
(a) Disclose matters that are (1) specifically authorized under criteria established by an Executive order to be kept secret in the interests of national defense or foreign policy and (2) in fact properly classified pursuant to such Executive order;
(b) Relate solely to the internal personnel rules and practices of any agency;
(c) Disclose matters specifically exempted from disclosure by any statute other than 5 U.S.C. 552 (FOIA), provided that such statute (1) requires that the matter be withheld from the public in such a manner as to leave no discretion on the issue, or (2) establishes particular criteria for withholding or refers to particular types of matters to be withheld;
(d) Disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential;
(e) Involve accusing any person of a crime, or formally censuring any person;
(f) Disclose information of a personal nature where disclosure would constitute a clearly unwarranted invasion of personal privacy;
(g) Disclose investigatory records compiled for law enforcement purposes, or information which, if written, would be contained in such records, but only to the extent that the production of such records or information would
(1) Interfere with enforcement proceedings,
(2) Deprive a person of a right to a fair trial or an impartial adjudication,
(3) Constitute an unwarranted invasion of personal privacy,
(4) Disclose the identity of a confidential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source,
(5) Disclose investigative techniques and procedures, or
(6) Endanger the life or physical safety of law enforcement personnel;
(h) Disclose information contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions;
(i) Disclose information, the premature disclosure of which would be likely to significantly frustrate implementation of a proposed agency action unless the agency has already disclosed to the public the content or nature of its proposed action, or where the agency is required by law to make such disclosure on its own initiative prior to taking final agency action on such proposal; or
(j) Specifically concern the agency’s issuance of a subpena, or the agency’s participation in a civil action or proceeding, an action in a foreign court or international tribunal, or an arbitration, or the initiation, conduct, or disposition by the agency of a particular case of formal agency adjudication pursuant to the procedures in 5 U.S.C. 554 or otherwise involving a determination on the record after opportunity for a hearing.
§ 503.74 Procedures for closing a portion or portions of a meeting or a portion or portions of a series of meetings on agency initiated requests.
(a) Any member of the agency, the Managing Director or the General Counsel of the agency may request that any portion or portions of a series of meetings be closed to public observation for any of the reasons provided in § 503.73 by submitting such request in writing to the Secretary of the agency in sufficient time to allow the Secretary to schedule a timely vote on the request pursuant to paragraph (b) of this section.
(b) Upon receipt of any request made under paragraph (a) of this section, the Secretary of the agency shall schedule a time at which the members of the agency shall vote upon the request, which vote shall take place not later then eight (8) days prior to the scheduled meeting of the agency.
(c) At the time the Secretary schedules a time for an agency vote as described in paragraph (b) of this section, he or she shall forward the request to the General Counsel of the agency who shall act upon such request as provided in § 503.77.
(d) At the time schedule d by the Secretary as provided in paragraph (b) of this section, the members of the agency, upon consideration of the request submitted under paragraph (a) of this section and consideration of the certified opinion of the General Counsel of the agency provided to the members under § 503.77, shall vote upon that request. That vote shall determine whether or not any portion or portions of a meeting may be closed to public observation for any of the reasons provided in § 503.73, and whether or not the public interest requires that the portion or portions of the meeting or meetings remain open, notwithstanding the applicability of any of the reasons provided in § 503.73 permitting the closing of any meeting to public observation.
(e) In the case of a vote on a request under this section to close to public observation a portion or portions of a meeting, no such portion or portions of any meeting may be closed unless, by a vote on the issues described in paragraph (d) of this section, a majority of the entire membership of the agency shall vote to close such portion or portions of a meeting by recorded vote.
(f) In the case of a vote on a request under this section to close to public observation a portion or portions of a series of meetings as defined in § 503.71, no such portion or portions of a series of meetings may be closed unless, by a vote on the issues described in paragraph (d) of this section, a majority of the entire membership of the agency shall vote to close such portion or portions of a series of meetings. A determination to close to public observation a portion or portions of a series of meetings may be accomplished by a single vote on each of the issues described in paragraph (d) of this section, provided that the vote of each member of the agency shall be recorded and the vote shall be cast by each member and not by proxy vote.
§ 503.75 Procedures for closing a portion of a meeting on request initiated by an interested person.
(a) Any person as defined in § 503.71, whose interests may be directly affected by a portion of a meeting of the agency, may request that the agency close that portion of a meeting for the reason that matters in deliberation at that portion of the meeting are such that public disclosure of that portion of a meeting is likely to:
(1) Involve accusing any person of a crime, or formally censuring any person;
(2) Disclose information of a personal nature where disclosure would constitute a clearly unwarranted invasion of personal privacy; or
(3) Disclose investigatory records compiled for law enforcement purposes, or information which if written would be contained in such records, but only to the extent that the production of such records or information would:
(i) Interfere with enforcement proceedings;
(ii) Deprive a person of a right to a fair trial or an impartial adjudication;
(iii) Constitute an unwarranted invasion of personal privacy;
(iv) Disclose the identity of a confidential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source;
(v) Disclose investigative techniques and procedures; or
(vi) Endanger the life or physical safety of law enforcement personnel.
(b) Any person described in paragraph (a) of this section who submits a request that a portion of a meeting be closed shall submit an original and 15 copies of that request to the Secretary, Federal Maritime Commission, Washington, DC 20573, and shall state with particularity that portion of a meeting sought to be closed and the reasons therefor as described in paragraph (a) of this section.
(c) Upon receipt of any request made under paragraphs (a) and (b) of this section, the Secretary of the agency shall:
(1) Furnish a copy of the request to each member of the agency; and
(2) Furnish a copy of the request to the General Counsel of the agency.
(d) Upon receipt of a request made under paragraphs (a) and (b) of this section, any member of the agency may request agency action upon the request to close a portion of a meeting by notifying the Secretary of the agency of that request for agency action.
(e) Upon receipt of a request for agency action under paragraph (d) of this section, the Secretary of the agency shall schedule a time for an agency vote upon the request of the person whose interests may be directly affected by a portion of a meeting, which vote shall take place prior to the scheduled meeting of the agency.
(f) At the time the Secretary receives a request for agency action and schedules a time for an agency vote as described in paragraph (e) of this section, the request of the person whose interests may be directly affected by a portion of a meeting shall be forwarded to the General Counsel of the agency who shall act upon such request as provided in § 503.77.
(g) At the time scheduled by the Secretary, as provided in paragraph (e) of this section, the members of the agency, upon consideration of the request of the person whose interests may be directly affected by a portion of a meeting submitted under paragraphs (a) and (b) of this section, and consideration of the certified opinion of the General Counsel of the agency provided to the members under § 503.77, shall vote upon that request. That vote shall determine whether or not any portion or portions of a meeting or portion or portions of a series of meetings may be closed to public observation for any of the reasons provided in paragraph (a) of this section, and whether or not the public interest requires that the portion or portions of the meeting or meetings remain open, notwithstanding the applicability of any of the reasons provided in paragraph (a) of this section permitting the closing of any portion of any meeting to public observation.
(h) In the case of a vote on a request under this section to close to public observation a portion of a meeting, no such portion of a meeting may be closed unless, by a vote on the issues described in paragraph (g) of this section, a majority of the entire membership of the agency shall vote to close such portion of a meeting by a recorded vote.
§ 503.76 Effect of vote to close a portion or portions of a meeting or series of meetings.
(a) Where the agency votes as provided in § 503.74 or § 503.75, to close to public observation a portion or portions of a meeting or a portion or portions of a series of meetings, the portion or portions of a meeting or the portion or portions of a series of meetings shall be closed.
(b) Except as otherwise provided in §§ 503.80, 503.81 and 503.82, not later than the day following the day on which a vote is taken under § 503.74 or § 503.75, by which it is determined to close a portion or portions of a meeting or a portion or portions of a series of meetings to public observation, the Secretary shall make available to the public:
(1) A written copy of the recorded vote reflecting the vote of each member of the agency;
(2) A full written explanation of the agency action closing that portion or those portions to public observation; and
(3) A list of the names and affiliations of all persons expected to attend the portion or portions of the meeting or the portion or portions of a series of meetings.
(c) Except as otherwise provided in §§ 503.80, 503.81 and 503.82, not later than the day following the day on which a vote is taken under § 503.74, or § 503.75, by which it is determined that the portion or portions of a meeting or the portion or portions of a series of meetings shall remain open to public observation, the Secretary shall make available to the public a written copy of the recorded vote reflecting the vote of each member of the agency.
§ 503.77 Responsibilities of the General Counsel of the agency upon a request to close any portion of any meeting.
(a) Upon any request that the agency close a portion or portions of any meeting or any portion or portions of any series of meetings under the provisions of §§ 503.74 and 503.75, the General Counsel of the agency shall certify in writing to the agency, prior to an agency vote on that request, whether or not in his or her opinion the closing of any such portion or portions of a meeting or portion or portions of a series of meetings is proper under the provisions of this subpart and the terms of the Government in the Sunshine Act (5 U.S.C. 552b). If, in the opinion of the General Counsel, the closing of a portion or portions of a meeting or portion or portions of a series of meetings is proper under the provisions of this subpart and the terms of the Government in the Sunshine Act (5 U.S.C. 552b), his or her certification of that opinion shall cite each applicable, particular, exemptive provision of that Act and provision of this subpart.
(b) A copy of the certification of the General Counsel as described in paragraph (a) of this section, together with a statement of the officer presiding over the portion or portions of any meeting or the portion or portions of a series of meetings setting forth the time and place of the relevant meeting or meetings, and the persons present, shall be maintained by the Secretary for public inspection.
§ 503.78 General rule – information pertaining to meeting.
(a) As defined in § 503.71, all information pertaining to a portion or portions of a meeting or portion or portions of a series of meetings of the agency shall be disclosed to the public unless excepted from such disclosure under §§ 503.79 through 503.81 or § 503.84.
(b) All inquiries as to the status of pending matters which were considered by the Commission in closed session should be directed to the Secretary of the Commission. Commission personnel who attend closed meetings of the Commission are prohibited from disclosing anything that occurs during those meetings. An employee’s failure to respect the confidentiality of closed meetings constitutes a violation of Commission’s General Standards of Conduct. The Commission can, of course, determine to make public the events or decisions occurring in a closed meeting, such information to be disseminated by the Office of the Secretary. An inquiry to the Office of the Secretary as to whether any information has been made public is not, therefore, improper. However, a request of or attempt to persuade a Commission employee to divulge the contents of a closed meeting constitutes a lack of proper professional conduct inappropriate to a person practicing before this agency, and requires that the employee file a report of such event so that a determination can be made whether disciplinary action should be initiated pursuant to § 502.30 of this chapter.
§ 503.79 Exceptions – information pertaining to meeting.
Except in a case where the agency finds that the public interest requires otherwise, information pertaining to a portion or portions of a meeting or portion or portions of a series of meetings need not be disclosed by the agency if the agency determines, under the provisions of §§ 503.80 and 503.81 that disclosure of that information is likely to disclose matters which are:
(a) Specifically authorized under criteria established by an Executive order to be kept secret in the interests of national defense or foreign policy and in fact properly classified pursuant to such Executive order;
(b) Related solely to the internal personnel rules and practices of an agency;
(c) Specifically exempted from disclosure by any statute other than 5 U.S.C. 552 (FOIA), provided that such statute (1) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (2) establishes particular criteria for withholding or refers to particular types of matters to be withheld;
(d) Trade secrets and commercial or financial information, obtained from a person and privileged or confidential;
(e) Involved with accusing any person of a crime, or formally censuring any person;
(f) Of a personal nature, where disclosure would constitute a clearly unwarranted invasion of personal privacy;
(g) Investigatory records compiled for law enforcement purposes, or information which if written would be contained in such records, but only to the extent that the production of such record or information would
(1) Interfere with enforcement proceedings,
(2) Deprive a person of a right to a fair trial or an impartial adjudication,
(3) Constitute an unwarranted invasion of personal privacy,
(4) Disclose the identity of a confidential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source,
(5) Disclose investigative techniques and procedures, or
(6) Endanger the life or physical safety of law enforcement personnel;
(h) Contained in or related to examination, operation, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions;
(i) Information, the premature disclosure of which would be likely to significantly frustrate implementation of a proposed agency action, unless the agency has already disclosed to the public the content or nature of its proposed action, or where the agency is required by law to make such disclosure on its own initiative prior to taking final agency action on such proposal; or
(j) Specifically concerned with the agency’s issuance of a subpena, the agency’s participation in a civil action or proceeding, an action in a foreign court or international tribunal, or an arbitration, or the initiation, conduct, or disposition by the agency of a particular case of formal agency adjudication pursuant to the procedures in 5 U.S.C. 554 or otherwise involving a determination on the record after opportunity for a hearing.
§ 503.80 Procedures for withholding information pertaining to meeting.
(a) Any member of the agency, or the General Counsel of the agency may request that information pertaining to a portion or portions of a meeting or to a portion or portions of a series of meetings be withheld from public disclosure for any of the reasons set forth in § 503.79 by submitting such request in writing to the Secretary not later than two (2) weeks prior to the commencement of the first meeting in a series of meetings.
(b) Upon receipt of any request made under paragraph (a) of this section, the Secretary shall schedule a time at which the members of the agency shall vote upon the request, which vote shall take place not later than eight (8) days prior to the scheduled meeting of the agency.
(c) At the time scheduled by the Secretary in paragraph (b) of this section, the Members of the agency, upon consideration of the request submitted under paragraph (a) of this section, shall vote upon that request. That vote shall determine whether or not information pertaining to a meeting may be withheld from public disclosure for any of the reasons provided in § 503.79, and whether or not the public interest requires that the information be disclosed notwithstanding the applicability of the reasons provided in § 503.79 permitting the withholding from public disclosure of the information pertaining to a meeting.
(d) In the case of a vote on a request under this section to withhold from public disclosure information pertaining to a portion or portions of a meeting, no such information shall be withheld from public disclosure unless, by a vote on the issues described in paragraph (c) of this section, a majority of the entire membership of the agency shall vote to withhold such information by recorded vote.
(e) In the case of a vote on a request under this section to withhold information pertaining to a portion or portions of a series of meetings, no such information shall be withheld unless, by a vote on the issues described in paragraph (c) of this section, a majority of the entire membership of the agency shall vote to withhold such information. A determination to withhold information pertaining to a portion or portions of a series of meetings from public disclosure may be accomplished by a single vote on the issues described in paragraph (c) of this section, provided that the vote of each member of the agency shall be recorded and the vote shall be cast by each member and not by proxy vote.
§ 503.81 Effect of vote to withhold information pertaining to meeting.
(a) Where the agency votes as provided in § 503.80 to withhold from public disclosure information pertaining to a portion or portions of a meeting or portion or portions of a series of meetings, such information shall be excepted from the requirements of §§ 503.78, 503.82 and 503.83.
(b) Where the agency votes as provided in § 503.80 to permit public disclosure of information pertaining to a portion of portions of a meeting or portion or portions of a series of meetings, such information shall be disclosed to the public as required by §§ 503.78, 503.82 and 503.83.
(c) Not later than the day following the date on which a vote is taken under § 503.80, by which the information pertaining to a meeting is determined to be disclosed, the Secretary shall make available to the public a written copy of such vote reflecting the vote of each member of the agency on the question.
§ 503.82 Public announcement of agency meeting.
(a) Except as provided in §§ 503.80 and 503.81 regarding a determination to withhold from public disclosure any information pertaining to a portion or portions of a meeting or portion or portions of a series of meetings, or as otherwise provided in paragraph (c) of this section, the Secretary of the agency shall make public announcement of each meeting of the agency.
(b) Except as otherwise provided in this section, public announcement of each meeting of the agency shall be accomplished not later than one week prior to commencement of a meeting or the commencement of the first meeting in a series of meetings, and shall disclose:
(1) The time of the meeting;
(2) The place of the meeting;
(3) The subject matter of each portion of each meeting or series of meetings;
(4) Whether any portion or portions of a meeting or portion or portions of any series of meetings shall be open or closed to public observation; and
(5) The name and telephone number of the Secretary of the agency who shall respond to requests for information about a meeting.
(c) The announcement described in paragraphs (a) and (b) of this section may be accomplished less than one week prior to the commencement of any meeting or series of meetings, provided the agency determines by recorded vote that the agency business requires that any such meeting or series of meetings be held at an earlier date. In the event of such a determination by the agency, public announcement as described in paragraph (b) of this section shall be accomplished at the earliest practicable time.
(d) Immediately following any public announcement accomplished under the provisions of this section, the Secretary of the agency shall submit a notice for publication in the
(1) The time of the meeting;
(2) The place of the meeting;
(3) The subject matter of each portion of each meeting or series of meetings;
(4) Whether any portion or portions of a meeting or portion or portions of any series of meetings is open or closed to public observation; and
(5) The name and telephone number of the Secretary of the agency who shall respond to requests for information about any meeting.
(e) No comments or further information relating to a particular item scheduled for an agency meeting will be accepted by the Secretary for consideration subsequent to public announcement of such meeting; except that the Commission, on its own initiative, or pursuant to a written request, may in its discretion, permit a departure from this limitation for exceptional circumstances.
§ 503.83 Public announcement of changes in meeting.
(a) Except as provided in §§ 503.80 and 503.81, under the provisions of paragraphs (b) and (c) of this section, the time or place of a meeting or series of meetings may be changed by the agency following accomplishment of the announcement and notice required by § 503.82, provided the Secretary of the agency shall publicly announce such change at the earliest practicable time.
(b) The subject matter of a portion or portions of a meeting or a portion or portions of a series of meetings, the time and place of such meeting, and the determination that the portion or portions of a series of meetings shall be open or closed to public observation may be changed following accomplishment of the announcement required by § 503.82, provided:
(1) The agency, by recorded vote of the majority of the entire membership of the agency, determines that agency business so requires and that no earlier announcement of the change was possible; and
(2) The Secretary of the agency publicly announces, at the earliest practicable time, the change made and the vote of each member upon such change.
(c) Immediately following any public announcement of any change accomplished under the provisions of this section, the Secretary of the agency shall submit a notice for publication in the
(1) The time of the meeting;
(2) The place of the meeting;
(3) The subject matter of each portion of each meeting or series of meetings;
(4) Whether any portion or portions of any meeting or any portion or portions of any series of meetings is open or closed to public observation;
(5) Any change in paragraphs (c) (1), (c) (2), (c) (3), or (c) (4) of this section; and
(6) The name and telephone number of the Secretary of the agency who shall respond to requests for information about any meeting.
§ 503.84 Nonpublic Collaborative Discussions.
(a) General. Notwithstanding § 503.72, a majority of the Commissioners may hold a meeting that is not open to public observation to discuss official agency business if:
(1) No formal or informal vote or other official agency action is taken at the meeting;
(2) Each individual present at the meeting is a Commissioner or an employee of the Commission;
(3) At least one (1) Commissioner from each political party is present at the meeting, if there are sitting Commissioners from more than one party; and
(4) The General Counsel of the Commission is present at the meeting.
(b) Disclosure of nonpublic collaborative discussions. Except as provided under paragraph (c) of this section, not later than two (2) business days after the conclusion of a meeting under paragraph (a) of this section, the Commission shall make available to the public, in a place easily accessible to the public:
(1) A list of the individuals present at the meeting; and
(2) A summary of the matters discussed at the meeting, except for any matters the Commission properly determines may be withheld from the public under § 503.73.
(c) Exception. If the Commission properly determines matters may be withheld from the public under § 503.73, the Commission shall provide a summary with as much general information as possible on those matters withheld from the public.
(d) Ongoing proceedings. If a meeting under paragraph (a) of this section directly relates to an ongoing proceeding before the Commission, the Commission shall make the disclosure under paragraph (b) of this section on the date of the final Commission decision.
§ 503.85 Agency recordkeeping requirements.
(a) In the case of any portion or portions of a meeting or portion or portions of a series of meetings determined by the agency to be closed to public observation under the provisions of §§ 502.73 through 503.75, the following records shall be maintained by the Secretary of the agency:
(1) The certification of the General Counsel of the agency required by § 503.77;
(2) A statement from the officer presiding over the portion or portions of the meeting or portion or portions of a series of meetings setting forth the time and place of the portion or portions of the meeting or portion or portions of the series of meetings, the persons present at those times; and
(3) Except as provided in paragraph (b) of this section, a complete transcript or electronic recording fully recording the proceedings at each portion of each meeting closed to public observation.
(b) In case the agency determines to close to public observation any portion or portions of any meeting or portion or portions of any series of meetings because public observation of such portion or portions of any meeting is likely to specifically concern the agency’s issuance of a subpena, or the agency’s participation in a civil action or proceeding, an action in a foreign court or international tribunal, or an arbitration, or the initiation, conduct, or disposition by the agency of a particular case of formal agency adjudication pursuant to the procedures in 5 U.S.C. 554 or otherwise involving a determination on the record after opportunity for a hearing, the agency may maintain a set of minutes in lieu of the transcript or recording described in paragraph (a)(3) of this section. Such minutes shall contain:
(1) A full and clear description of all matters discussed in the closed portion of any meeting;
(2) A full and accurate summary of any action taken on any matter discussed in the closed portion of any meeting and the reasons therefor;
(3) A description of each of the views expressed on any matter upon which action was taken as described in paragraph (b)(2) of this section;
(4) The record of any rollcall vote which shall show the vote of each member on the question; and
(5) An identification of all documents considered in connection with any action taken on a matter described in paragraph (b)(1) of this section.
(c) All records maintained by the agency as described in this section shall be held by the agency for a period of not less than two (2) years following any meeting or not less than one (1) year following the conclusion of any agency proceeding with respect to which that meeting or portion of a meeting was held.
§ 503.86 Public access to records.
(a) All transcripts, electronic recordings or minutes required to be maintained by the agency under the provisions of §§ 503.85(a)(3) and 503.85(b) shall be promptly made available to the public by the Secretary of the agency, except for any item of discussion or testimony of any witnesses which the agency determines to contain information which may be withheld from public disclosure because its disclosure is likely to disclose matters which are:
(1)(i) specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy and (ii) in fact properly classified pursuant to such Executive order;
(2) Related solely to the internal personnel rules and practices of an agency;
(3) Specifically exempted from disclosure by any statute other than 5 U.S.C. 552 (FOIA), provided that such statute
(i) Requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or
(ii) Establishes particular criteria for withholding or refers to particular types of matters to be withheld;
(4) Trade secrets and commercial or financial information obtained from a person and privileged or confidential;
(5) Involved with accusing any person of a crime, or formally censuring any person;
(6) Of a personal nature where disclosure would constitute a clearly unwarranted invasion of personal privacy;
(7) Investigatory records compiled for law enforcement purposes, or information which, if written, would be contained in such records, but only to the extent that the production of such records or information would
(i) Interfere with enforcement proceedings,
(ii) Deprive a person of a right to a fair trial or an impartial adjudication,
(iii) Constitute an unwarranted invasion of personal privacy,
(iv) Disclose the identity of a confidential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source,
(v) Disclose investigative techniques and procedures or
(vi) Endanger the life or physical safety of law enforcement personnel;
(8) Contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions;
(9) Information, the premature disclosure of which would be likely to significantly frustrate implementation of a proposed agency action, unless the agency has already disclosed to the public the content or nature of its proposed action, or where the agency is required by law to make such disclosure on its own initiative prior to taking final agency action on such proposal; or
(10) Specifically concerned with the agency’s issuance of a subpena, or the agency’s participation in a civil action or proceeding, an action in a foreign court or international tribunal, or an arbitration, or the initiation, conduct, or disposition by the agency of a particular case of formal agency adjudication pursuant to the procedures in 5 U.S.C. 554 or otherwise involving a determination on the record after opportunity for a hearing.
(b) Requests for access to the records described in this section shall be made in accordance with procedures described in subparts C and D of this part.
(c) Records disclosed to the public under this section shall be furnished at the expense of the party requesting such access at the actual cost of duplication or transcription.
§ 503.87 Effect of provisions of this subpart on other subparts.
(a) Nothing in this subpart shall limit or expand the ability of any person to seek access to agency records under subpart D (§§ 503.31 to 503.36) of this part except that the exceptions of § 503.86 shall govern requests to copy or inspect any portion of any transcript, electronic recordings or minutes required to be kept under this subpart.
(b) Nothing in this subpart shall permit the withholding from any individual to whom a record pertains any record required by this subpart to be maintained by the agency which record is otherwise available to such an individual under the provisions of subpart H of this part.
PART 504 – PROCEDURES FOR ENVIRONMENTAL POLICY ANALYSIS
§ 504.1 Purpose and scope.
(a) This part implements the National Environmental Policy Act of 1969 (NEPA) and Executive Order 12114 and incorporates and complies with the Regulations of the Council on Environmental Quality (CEQ) (40 CFR part 1500 et seq.).
(b) This part applies to all actions of the Federal Maritime Commission (Commission). To the extent possible, the Commission shall integrate the requirements of NEPA with its obligations under section 382(b) of the Energy Policy and Conservation Act of 1975, 42 U.S.C. 6362.
(c) Information obtained under this part is used by the Commission to assess potential environmental impacts of proposed Federal Maritime Commission actions. Compliance is voluntary but may be made mandatory by Commission order to produce the information pursuant to section 15 of the Shipping Act of 1984 (46 U.S.C. 40104). The penalty for violation of a Commission order under section 13 of the Shipping Act of 1984 (46 U.S.C. 41107-41109) may not exceed $5,000 for each violation, unless the violation was willfully and knowingly committed, in which case the amount of the civil penalty may not exceed $25,000 for each violation, as adjusted by § 506.4 of this chapter. (Each day of a continuing violation constitutes a separate offense.)
§ 504.2 Definitions.
(a) Shipping Act of 1984 means the Shipping Act of 1984 (46 U.S.C. 40101-41309).
(b) Common carrier means any common carrier by water as defined in section 3 of the Shipping Act of 1984 (46 U.S.C. 40102), including a conference of such carriers.
(c) Environmental impact means any alteration of existing environmental conditions or creation of a new set of environmental conditions, adverse or beneficial, caused or induced by the action under consideration.
(d) Potential action means the range of possible Commission actions that may result from a Commission proceeding in which the Commission has not yet formulated a proposal.
(e) Proposed action means that stage of activity where the Commission has determined to take a particular course of action and the effects of that course of action can be meaningfully evaluated.
(f) Environmental assessment means a concise document that serves to “provide sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact” (40 CFR 1508.9).
(g) Recyclable means any secondary material that can be used as a raw material in an industrial process in which it is transformed into a new product replacing the use of a depletable natural resource.
(h) Marine Terminal Operator means a person engaged in the United States in the business of furnishing wharfage, dock, warehouse or other terminal facilities in connection with a common carrier, or in connection with a common carrier and a water carrier subject to subchapter II of chapter 135 of Title 49, United States Code.
(i) Commission means the Federal Maritime Commission, including any office or bureau to which the Commission may delegate its environmental policy analysis responsibilities.
§ 504.3 General information.
(a) All comments submitted pursuant to this part shall be addressed to the Secretary, Federal Maritime Commission, 800 North Capitol Street, N.W., Washington, D.C. 20573-0001.
(b) A list of recent Commission actions, if any, for which a finding of no significant impact has been made or for which an environmental impact statement is being prepared will be maintained by the Commission in the Office of the Secretary and will be available for public inspection.
(c) Information or status reports on environmental statements and other elements of the NEPA process can be obtained from the Secretary, Federal Maritime Commission, 800 North Capitol Street, N.W., Washington, D.C. 20573-0001.
§ 504.4 Categorical exclusions.
(a) No environmental analyses need be undertaken or environmental documents prepared in connection with actions which do not individually or cumulatively have a significant effect on the quality of the human environment because they are purely ministerial actions or because they do not increase or decrease air, water or noise pollution or the use of fossil fuels, recyclables, or energy. The following Commission actions, and rulemakings related thereto, are therefore excluded:
(1) Issuance, modification, denial and revocation of ocean transportation intermediary licenses.
(2) Certification of financial responsibility of passenger vessels pursuant to 46 CFR part 540.
(3) Receipt of surety bonds submitted by ocean transportation intermediaries.
(4) Promulgation of procedural rules pursuant to 46 CFR part 502.
(5) Receipt of service contracts.
(6) Consideration of special permission applications pursuant to part 520 of this chapter.
(7)-(8) [Reserved]
(9) Consideration of amendments to agreements filed pursuant to section 5 of the Shipping Act of 1984 (46 U.S.C. 40301(d)-(e), 40302-40303, 40305), which do not increase the authority set forth in the effective agreement.
(10) Consideration of agreements between common carriers which solely affect intraconference or inter-rate agreement relationships or pertain to administrative matters of conferences or rate agreements.
(11) Consideration of agreements between common carriers to discuss, propose or plan future action, the implementation of which requires filing a further agreement.
(12) Consideration of exclusive or non-exclusive equipment interchange or husbanding agreements.
(13) Receipt of non-exclusive transshipment agreements.
(14) Action relating to collective bargaining agreements.
(15) Action pursuant to section 9 of the Shipping Act of 1984 (46 U.S.C. 40701-40706) concerning the justness and reasonableness of controlled carriers’ rates, charges, classifications, rules or regulations.
(16) Receipt of self-policing reports or shipper requests and complaints.
(17) [Reserved]
(18) Consideration of actions solely affecting the environment of a foreign country.
(19) Action taken on special docket applications pursuant to § 502.271 of this chapter.
(20) Consideration of matters related solely to the issue of Commission jurisdiction.
(21) [Reserved]
(22) Investigatory and adjudicatory proceedings, the purpose of which is to ascertain past violations of the Shipping Act of 1984.
(23) [Reserved]
(24) Action regarding access to public information pursuant to 46 CFR part 503.
(25) Action regarding receipt and retention of minutes of conference meetings.
(26) Administrative procurements (general supplies).
(27) Contracts for personal services.
(28) Personnel actions.
(29) Requests for appropriations.
(30) Consideration of all agreements involving marine terminal facilities and/or services except those requiring substantial levels of construction, dredging, land-fill, energy usage and other activities which may have a significant environmental effect.
(31) Consideration of agreements regulating employee wages, hours of work, working conditions or labor exchanges.
(32) Consideration of general agency agreements involving ministerial duties of a common carrier such as internal management, cargo solicitation, booking of cargo, or preparation of documents.
(33) Consideration of agreements pertaining to credit rules.
(34) Consideration of agreements involving performance bonds to a conference from a conference member guaranteeing compliance by the member with the rules and regulations of the conference.
(35) Consideration of agreements between members of two or more conferences or other rate-fixing agreements to discuss and agree upon common self-policing systems and cargo inspection services.
(b) If interested persons allege that a categorically-excluded action will have a significant environmental effect (e.g., increased or decreased air, water or noise pollution; use of recyclables; use of fossil fuels or energy), they shall, by written submission to the Secretary, explain in detail their reasons. The Secretary shall refer these submissions for determination by the appropriate Commission official, not later than ten (10) days after receipt, whether to prepare an environmental assessment. Upon a determination not to prepare an environmental assessment, such persons may petition the Commission for review of the decision within ten (10) days of receipt of notice of such determination.
(c) If the individual or cumulative effect of a particular action otherwise categorically excluded offers a reasonable potential of having a significant environmental impact, an environmental assessment shall be prepared pursuant to § 504.5.
§ 504.5 Environmental assessments.
(a) Every Commission action not specifically excluded under § 504.4 shall be subject to an environmental assessment.
(b) A notice of intent to prepare an environmental assessment briefly describing the nature of the potential or proposed action and inviting written comments to aid in the preparation of the environmental assessment and early identification of the significant environmental issues may be published in the
§ 504.6 Finding of no significant impact.
(a) If upon completion of an environmental assessment, it is determined that a potential or proposed action will not have a significant impact on the quality of the human environment of the United States or of the global commons, a finding of no significant impact shall be prepared and notice of its availability published in the
(b) Petitions for review of a finding of no significant impact must be received by the Commission within ten (10) days from the date of publication of the notice of its availability in the
§ 504.7 Environmental impact statements.
(a) General. (1) An environmental impact statement (EIS) shall be prepared when the environmental assessment indicates that a potential or proposed action may have a significant impact upon the environment of the United States or the global commons.
(2) The EIS process will commence:
(i) For adjudicatory proceedings, when the Commission issues an order of investigation or a complaint is filed;
(ii) For rulemaking or legislative proposals, upon issuance of the proposal by the Commission; and
(iii) For other actions, the time the action is noticed in the
(3) The major decision points in the EIS process are:
(i) The issuance of an initial decision in those cases assigned to be heard by an Administrative Law Judge (ALJ); and
(ii) The issuance of the Commission’s final decision or report on the action.
(4) The EIS shall consider potentially significant impacts upon the quality of the human environment of the United States and, in appropriate cases, upon the environment of the global commons outside the jurisdiction of any nation.
(b) Draft environmental impact statements. (1) A draft environmental impact statement (DEIS) will initially be prepared in accordance with 40 CFR part 1502.
(2) The DEIS shall be distributed to every party to a Commission proceeding for which it was prepared. There will be no fee charged to such parties. One copy per person will also be provided to interested persons at their request. The fee charged such persons shall be that provided in § 503.43 of this chapter.
(3) Comments on the DEIS must be received by the Commission within ten (10) days of the date the Environmental Protection Agency (EPA) publishes in the
(c) Final environmental impact statements. (1) After receipt of comments on the DEIS, a final environmental impact statement (FEIS) will be prepared pursuant to 40 CFR part 1502, which shall include a discussion of the possible alternative actions to a potential or proposed action. The FEIS will be distributed in the same manner as specified in paragraph (b)(2) of this section.
(2) The FEIS shall be prepared prior to the Commission’s final decision and shall be filed with the Secretary, Federal Maritime Commission. Upon filing, it shall become part of the administrative record.
(3) For any Commission action which has been assigned to an ALJ for evidentiary hearing:
(i) The FEIS shall be submitted prior to the close of the record, and
(ii) The ALJ shall consider the environmental impacts and alternatives contained in the FEIS in preparing the initial decision.
(4)(i) For all proposed Commission actions, any party may, by petition to the Commission within ten (10) days following EPA’s notice in the
(ii) The Commission may delineate the issue(s) and refer them to an ALJ for expedited resolution or may elect to refer the petition to an ALJ for consideration.
(iii) The ALJ shall make findings of fact on the issue(s) and shall certify such findings to the Commission as a supplement to the FEIS. To the extent that such findings differ from the FEIS, it shall be modified by the supplement.
(iv) Discovery may be granted by the ALJ on a showing of good cause and, if granted, shall proceed on an expedited basis.
§ 504.8 Record of decision.
The Commission shall consider each alternative described in the FEIS in its decisionmaking and review process. At the time of its final report or order, the Commission shall prepare a record of decision pursuant to 40 CFR 1505.2.
§ 504.9 Information required by the Commission.
(a) Upon request, a person filing a complaint, protest, petition or agreement requesting Commission action shall submit, no later than ten (10) days from the date of the request, a statement setting forth, in detail, the impact of the requested Commission action on the quality of the human environment, if such requested action will:
(1) Alter cargo routing patterns between ports or change modes of transportation;
(2) Change rates or services for recyclables;
(3) Change the type, capacity or number of vessels employed in a specific trade; or
(4) Alter terminal or port facilities.
(b) The statement submitted shall, to the fullest extent possible, include:
(1) The probable impact of the requested Commission action on the environment (e.g., the use of energy or natural resources, the effect on air, noise, or water pollution), compared to the environmental impact created by existing uses in the area affected by it;
(2) Any adverse environmental effects which cannot be avoided if the Commission were to take or adopt the requested action; and
(3) Any alternatives to the requested Commission action.
(c) If environmental impacts, either adverse or beneficial, are alleged, they should be sufficiently identified and quantified to permit meaningful review. Individuals may contact the Secretary of the Federal Maritime Commission for informal assistance in preparing this statement. The Commission shall independently evaluate the information submitted and shall be responsible for assuring its accuracy if used by it in the preparation of an environmental assessment or EIS.
(d) In all cases, the Secretary may request every common carrier by water, or marine terminal operator, or any officer, agent or employee thereof, as well as all parties to proceedings before the Commission, to submit, within ten (10) days of such request, all material information necessary to comply with NEPA and this part. Information not produced in response to an informal request may be obtained by the Commission pursuant to section 15 of the Shipping Act of 1984 (46 U.S.C. 40104).
§ 504.10 Time constraints on final administrative actions.
No decision on a proposed action shall be made or recorded by the Commission until the later of the following dates unless reduced pursuant to 40 CFR 1506.10(d), or unless required by a statutorily-prescribed deadline on the Commission action:
(a) Forty (40) days after EPA’s publication of the notice described in § 504.7(b) for a DEIS; or
(b) Ten (10) days after publication of EPA’s notice for an FEIS.
§ 504.91 OMB control numbers assigned pursuant to the Paperwork Reduction Act.
This section displays the control numbers assigned to information collection requirements of the Commission in this part by the Office of Management and Budget pursuant to the Paperwork Reduction Act of 1980, Public Law 96-511. The Commission intends that this section comply with the requirements of section 3507(f) of the Paperwork Reduction Act, which requires that agencies display a current control number assigned by the Director of the Office of Management and Budget (OMB) for each agency information collection requirement:
| Section | Current OMB Control No. |
|---|---|
| 504.4 through 504.7 | 3072-0035 |
| 504.9 | 3072-0035. |
PART 505 – ADMINISTRATIVE OFFSET
§ 505.1 Scope of regulations.
These regulations apply to the collection of debts owed to the United States arising from transactions with the Commission, or where a request for an offset is received by the Commission from another agency. These regulations are consistent with the Federal Claims Collection Standards on administrative offset issued jointly by the Department of Justice and the General Accounting Office as set forth in 4 CFR 102.3.
§ 505.2 Definitions.
(a) Administrative offset, as defined in 31 U.S.C. 3701(a)(1), means withholding money payable by the United States Government to, or held by the Government for, a person to satisfy a debt the person owes the Government.
(b) Person includes a natural person or persons, profit or non-profit corporation, partnership, association, trust, estate, consortium, or other entity which is capable of owing a debt to the United States Government except that agencies of the United States, or of any State or local government shall be excluded.
§ 505.3 General.
(a) The Chairman or his or her designee, after attempting to collect a debt from a person under section 3(a) of the Federal Claims Collection Act of 1966, as assembled (31 U.S.C. 3711(a)), may collect the debt by administrative offset subject to the following:
(1) The debt is certain in amount; and
(2) It is in the best interests of the United States to collect the debt by administrative offset because of the decreased costs of collection and the acceleration in the payment of the debt.
(b) The Chairman, or his or her designee, may initiate administrative offset with regard to debts owed by a person to another agency of the United States Government, upon receipt of a request from the head of another agency or his or her designee, and a certification that the debt exists and that the person has been afforded the necessary due process rights.
(c) The Chairman, or his or her designee, may request another agency that holds funds payable to a Commission debtor to offset the debt against the funds held and will provide certification that:
(1) The debt exists; and
(2) The person has been afforded the necessary due process rights.
(d) If the six-year period for bringing action on a debt provided in 28 U.S.C. 2415 has expired, then administrative offset may be used to collect the debt only if the costs of bringing such action are likely to be less than the amount of the debt.
(e) No collection by administrative offset shall be made on any debt that has been outstanding for more than 10 years unless facts material to the Government’s right to collect the debt were not known, and reasonably could not have been known, by the official or officials responsible for discovering and collecting such debt.
(f) These regulations do not apply to:
(1) A case in which administrative offset of the type of debt involved is explicitly provided for or prohibited by another statute; or
(2) Debts owed by other agencies of the United States or by any State or local government.
§ 505.4 Notification procedures.
Before collecting any debt through administrative offset, a notice of intent to offset shall be sent to the debtor by certified mail, return receipt requested, at the most current address that is available to the Commission. The notice shall provide:
(a) A description of the nature and amount of the debt and the intention of the Commission to collect the debt through administrative offset;
(b) An opportunity to inspect and copy the records of the Commission with respect to the debt;
(c) An opportunity for review within the Commission of the determination of the Commission with respect to the debt; and
(d) An opportunity to enter into a written agreement for the repayment of the amount of the debt.
§ 505.5 Agency review.
(a) A debtor may dispute the existence of the debt, the amount of debt, or the terms of repayment. A request to review a disputed debt must be submitted to the Commission official who provided notification within 30 calendar days of the receipt of the written notice described in § 505.4.
(b) If the debtor requests an opportunity to inspect or copy the Commission’s records concerning the disputed claim, 10 business days will be granted for the review. The time period will be measured from the time the request for inspection is granted or from the time the copy of the records is received by the debtor.
(c) Pending the resolution of a dispute by the debtor, transactions in any of the debtor’s account(s) maintained in the Commission may be temporarily suspended. Depending on the type of transaction the suspension could preclude its payment, removal, or transfer, as well as prevent the payment of interest or discount due thereon. Should the dispute be resolved in the debtor’s favor, the suspension will be immediately lifted.
(d) During the review period, interest, penalties, and administrative costs authorized under the Federal Claims Collection Act of 1996, as amended, will continue to accrue.
§ 505.6 Written agreement for repayment.
A debtor who admits liability but elects not to have the debt collected by administrative offset will be afforded an opportunity to negotiate a written agreement for the repayment of the debt. If the financial condition of the debtor does not support the ability to pay in one lump-sum, reasonable installments may be considered. No installment arrangement will be considered unless the debtor submits a financial statement, executed under penalty of perjury, reflecting the debtor’s assets, liabilities, income, and expenses. The financial statement must be submitted within 10 business days of the Commission’s request for the statement. At the Commission’s option, a confess-judgment note or bond of indemnity with surety may be required for installment agreements. Notwithstanding the provisions of this section, any reduction or compromise of a claim will be governed by 4 CFR part 103.
§ 505.7 Administrative offset.
(a) If the debtor does not exercise the right to request a review within the time specified in § 505.5 or if as a result of the review, it is determined that the debt is due and no written agreement is executed, then administrative offset shall be ordered in accordance with these regulations without further notice.
(b) Requests for offset to other Federal agencies. The Chairman or his or her designee may request that funds due and payable to a debtor by another Federal agency be administratively offset in order to collect a debt owed to the Commission by that debtor. In requesting administrative offset, the Commission, as creditor, will certify in writing to the Federal agency holding funds of the debtor:
(1) That the debtor owes the debt;
(2) The amount and basis of the debt; and
(3) That the agency has complied with the requirements of 31 U.S.C. 3716, its own administrative offset regulations and the applicable provisions of 4 CFR part 102 with respect to providing the debtor with due process.
(c) Requests for offset from other Federal agencies. Any Federal agency may request that funds due and payable to its debtor by the Commission be administratively offset in order to collect a debt owed to such Federal agency by the debtor. The Commission shall initiate the requested offset only upon:
(1) Receipt of written certification from the creditor agency:
(i) That the debtor owes the debt;
(ii) The amount and basis of the debt;
(iii) That the agency has prescribed regulations for the exercise of administrative offset; and
(iv) That the agency has complied with its own administrative offset regulations and with the applicable provisions of 4 CFR part 102, including providing any required hearing or review.
(2) A determination by the Commission that collection by offset against funds payable by the Commission would be in the best interest of the United States as determined by the facts and circumstances of the particular case, and that such offset would not otherwise be contrary to law.
§ 505.8 Jeopardy procedure.
The Commission may effect an administrative offset against a payment to be made to the debtor prior to the completion of the procedures required by §§ 505.4 and 505.5 of this part if failure to take the offset would substantially jeopardize the Commission’s ability to collect the debt, and the time before the payment is to be made does not reasonably permit the completion of those procedures. Such prior offset shall be promptly followed by the completion of those procedures. Amounts recovered by offset but later found not to be owed to the Commission shall be promptly refunded.
PART 506 – CIVIL MONETARY PENALTY INFLATION ADJUSTMENT
§ 506.1 Scope and purpose.
The purpose of this part is to establish a mechanism for the regular adjustment for inflation of monetary penalties and to adjust such penalties in conformity with the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2641 note) as originally amended by the Debt Collection Improvement Act of 1996, Public Law 104-134, April 26, 1996, and currently amended by the Federal Civil Penalties Inflation Act Adjustment Improvements Act of 2015, Public Law 114-74, in order to maintain the deterrent effect of civil monetary penalties and to promote compliance with the law.
§ 506.2 Definitions.
(a) Commission means the Federal Maritime Commission.
(b) Civil Monetary Penalty means any penalty, fine, or other sanction that:
(1)(i) Is for a specific monetary amount as provided by Federal law; or
(ii) Has a maximum amount provided by Federal law;
(2) Is assessed or enforced by the Commission pursuant to Federal law; and
(3) Is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal Courts.
(c) Consumer Price Index means the Consumer Price Index for all urban consumers published by the Department of Labor.
§ 506.3 Civil monetary penalty inflation adjustment.
The Commission shall, not later than August 1, 2016, and at least every year thereafter –
(a) By regulation adjust each civil monetary penalty provided by law within the jurisdiction of the Commission by the inflation adjustment described in § 506.4; and
(b) Publish each such regulation in the
§ 506.4 Cost of living adjustments of civil monetary penalties.
(a) The inflation adjustment under § 506.3 will initially be determined by increasing the maximum civil monetary penalty for each civil monetary penalty by the initial cost-of-living adjustment. The inflation adjustment will subsequently be determined by increasing the maximum civil monetary penalty for each civil monetary penalty by the cost-of-living adjustment. Any increase determined under this section shall be rounded to the nearest multiple of $1.
(b) Inflation adjustment. For purposes of paragraph (a) of this section, the term `cost-of-living adjustment’ means the percentage (if any) for each civil monetary penalty by which the Consumer Price Index for the month of October preceding the adjustment exceeds the Consumer Price Index for the month of October 1 year before the month of October preceding the adjustment.
(c) Initial adjustment. For purposes of paragraph (a) of this section, the term `initial cost-of-living-adjustment’ means the percentage (if any) for each civil monetary penalty by which the Consumer Price Index for the month of October, 2015 exceeds the Consumer Price Index for the month of October of the calendar year during which the amount of such civil monetary penalty was established or adjusted under a provision of law of civil monetary penalty. The initial cost-of-living adjustment may not exceed 150 percent of such penalty on November 2, 2015, the date of the enactment of the Federal Civil Penalties Inflation Act Adjustment Improvements Act of 2015.
(d) Inflation adjustment. Maximum civil monetary penalties within the jurisdiction of the Federal Maritime Commission are adjusted for inflation as follows:
Table 1 to Paragraph (
| United States Code
citation | Civil monetary penalty description | Maximum
penalty as of January 15, 2022 | Maximum
penalty as of January 15, 2023 |
|---|---|---|---|
| 46 U.S.C. 42304 | Adverse impact on U.S. carriers by foreign shipping practices | $2,301,065 | $2,479,282 |
| 46 U.S.C. 41107(a) | Knowing and Willful violation/Shipping Act of 1984, or Commission regulation or order | 65,666 | 70,752 |
| 46 U.S.C. 41107(a) | Violation of Shipping Act of 1984, Commission regulation or order, not knowing and willful | 13,132 | 14,149 |
| 46 U.S.C. 41108(b) | Operating in foreign commerce after tariff suspension | 131,334 | 141,506 |
| 46 U.S.C. 42104 | Failure to provide required reports, etc./Merchant Marine Act of 1920 | 10,360 | 11,162 |
| 46 U.S.C. 42106 | Adverse shipping conditions/Merchant Marine Act of 1920 | 2,071,819 | 2,232,281 |
| 46 U.S.C. 42108 | Operating after tariff or service contract suspension/Merchant Marine Act of 1920 | 103,591 | 111,614 |
| 46 U.S.C. 44102, 44104 | Failure to establish financial responsibility for non-performance of transportation | 26,167
873 | 28,194
941 |
| 46 U.S.C. 44103, 44104 | Failure to establish financial responsibility for death or injury | 26,167
873 | 28,194
941 |
| 31 U.S.C. 3802(a)(1) | Program Fraud Civil Remedies Act/making false claim | 12,537 | 13,508 |
| 31 U.S.C. 3802(a)(2) | Program Fraud Civil Remedies Act/giving false statement | 12,537 | 13,508 |
§ 506.5 Application of increase to violations.
Any adjustment in a civil monetary penalty under this part shall apply only to civil monetary penalties, including those whose associated violation predated such increase, which are assessed after the date the adjustment takes effect.
PART 507 – ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN PROGRAMS OR ACTIVITIES CONDUCTED BY THE FEDERAL MARITIME COMMISSION
§ 507.101 Purpose.
This part effectuates section 119 of the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978, which amended section 504 of the Rehabilitation Act of 1973 to prohibit discrimination on the basis of handicap in programs or activities conducted by Executive agencies or the United States Postal Service.
§ 507.102 Application.
This part applies to all programs or activities conducted by the agency.
§ 507.103 Definitions.
For purposes of this part, the term –
Assistant Attorney General means the Assistant Attorney General, Civil Rights Division, United States Department of Justice.
Auxiliary aids means services or devices that enable persons with impaired sensory, manual, or speaking skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities conducted by the agency. For example, auxiliary aids useful for persons with impaired vision include readers, brailled materials, audio recordings, telecommunications devices and other similar services and devices. Auxiliary aids useful for persons with impaired hearing include telephone handset amplifiers, telephones compatible with hearing aids, telecommunication devices for deaf persons (TDD’s), interpreters, notetakers, written materials, and other similar services and devices.
Complete complaint means a written statement that contains the complainant’s name and address and describes the agency’s alleged discriminatory action in sufficient detail to inform the agency of the nature and date of the alleged violation of section 504. It shall be signed by the complainant or by someone authorized to do so on his or her behalf. Complaints filed on behalf of classes or third parties shall describe or identify (by name, if possible) the alleged victims of discrimination.
Facility means all or any portion of buildings, structures, equipment, roads, walks, parking lots, rolling stock or other conveyances, or other real or personal property.
Handicapped person means any person who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment.
As used in this definition, the phrase:
(1) Physical or mental impairment includes –
(i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genitourinary; hemic and lymphatic; skin; and endocrine; or
(ii) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. The term physical or mental impairment includes, but is not limited to, such diseases and conditions as orthopedic, visual, speech, and hearing impairments, cerebral palsy, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, mental retardation, emotional illness, and drug addiction and alcoholism.
(2) Major life activities includes functions such as caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.
(3) Has a record of such an impairment means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities.
(4) Is regarded as having an impairment means –
(i) Has a physical or mental impairment that does not substantially limit major life activities but is treated by the agency as constituting such a limitation;
(ii) Has a physical or mental impairment that substantially limits major life activities only as a result of the attitudes of others toward such impairment; or
(iii) Has none of the impairments defined in paragraph (1) of this definition but is treated by the agency as having such an impairment.
Historic preservation programs means programs conducted by the agency that have preservation of historic properties as a primary purpose.
Historic properties means those properties that are listed or eligible for listing in the National Register of Historic Places or properties designated as historic under a statute of the appropriate State or local government body.
Qualified handicapped person means –
(1) With respect to preschool, elementary, or secondary education services provided by the agency, a handicapped person who is a member of a class of persons otherwise entitled by statute, regulation, or agency policy to receive education services from the agency.
(2) With respect to any other agency program or activity under which a person is required to perform services or to achieve a level of accomplishment, a handicapped person who meets the essential eligibility requirements and who can achieve the purpose of the program or activity without modifications in the program or activity that the agency can demonstrate would result in a fundamental alteration in its nature;
(3) With respect to any other program or activity, a handicapped person who meets the essential eligibility requirements for participation in, or receipt of benefits from, that program or activity; and
(4) Qualified handicapped person is defined for purposes of employment in 29 CFR 1613.702(f), which is made applicable to this part by § 507.140.
Section 504 means section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617), and the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955). As used in this part, section 504 applies only to programs or activities conducted by Executive agencies and not to federally assisted programs.
Substantial impairment means a significant loss of the integrity of finished materials, design quality, or special character resulting from a permanent alteration.
§§ 507.104-507.109 [Reserved]
§ 507.110 Self-evaluation.
(a) The agency shall, by August 24, 1987, evaluate its current policies and practices, and the effects thereof, that do not or may not meet the requirements of this part, and, to the extent modification of any such policies and practices is required, the agency shall proceed to make the necessary modifications.
(b) The agency shall provide an opportunity to interested persons, including handicapped persons or organizations representing handicapped persons, to participate in the self-evaluation process by submitting comments (both oral and written).
(c) The agency shall, until three years following the completion of the self-evaluation, maintain on file and make available for public inspection:
(1) A description of areas examined and any problems identified, and
(2) A description of any modifications made.
§ 507.111 Notice.
The agency shall make available to employees, applicants, participants, beneficiaries, and other interested persons such information regarding the provisions of this part and its applicability to the programs or activities conducted by the agency, and make such information available to them in such manner as the head of the agency finds necessary to apprise such persons of the protections against discrimination assured them by section 504 and this regulation.
§§ 507.112-507.129 [Reserved]
§ 507.130 General prohibitions against discrimination.
(a) No qualified handicapped person shall, on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity conducted by the agency.
(b)(1) The agency, in providing any aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of handicap –
(i) Deny a qualified handicapped person the opportunity to participate in or benefit from the aid, benefit, or service;
(ii) Afford a qualified handicapped person an opportunity to participate in or benefit from the aid, benefit, or service that is not equal to that afforded others;
(iii) Provide a qualified handicapped person with an aid, benefit, or service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others;
(iv) Provide different or separate aid, benefits, or services to handicapped persons or to any class of handicapped persons than is provided to others unless such action is necessary to provide qualified handicapped persons with aid, benefits, or services that are as effective as those provided to others;
(v) Deny a qualified handicapped person the opportunity to participate as a member of planning or advisory boards; or
(vi) Otherwise limit a qualified handicapped person in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by others receiving the aid, benefit, or service.
(2) The agency may not deny a qualified handicapped person the opportunity to participate in programs or activities that are not separate or different, despite the existence of permissibly separate or different programs or activities.
(3) The agency may not, directly or through contractual or other arrangments, utilize criteria or methods of administration the purpose or effect of which would –
(i) Subject qualified handicapped persons to discrimination on the basis of handicap; or
(ii) Defeat or substantially impair accomplishment of the objectives of a program activity with respect to handicapped persons.
(4) The agency may not, in determining the site or location of a facility, make selections the purpose or effect of which would –
(i) Exclude handicapped persons from, deny them the benefits of, or otherwise subject them to discrimination under any program or activity conducted by the agency; or
(ii) Defeat or substantially impair the accomplishment of the objectives of a program or activity with respect to handicapped persons.
(5) The agency, in the selection of procurement contractors, may not use criteria that subject qualified handicapped persons to discrimination on the basis of handicap.
(6) The agency may not administer a licensing or certification program in a manner that subjects qualified handicapped persons to discrimination on the basis of handicap, nor may the agency establish requirements for the programs or activities of licensees or certified entities that subject qualified handicapped persons to discrimination on the basis of handicap. However, the programs or activities of entities that are licensed or certified by the agency are not, themselves, covered by this part.
(c) The exclusion of nonhandicapped persons from the benefits of a program limited by Federal statute or Executive order to handicapped persons or the exclusion of a specific class of handicapped persons from a program limited by Federal statute or Executive order to a different class of handicapped persons is not prohibited by this part.
(d) The agency shall administer programs and activities in the most integrated setting appropriate to the needs of qualified handicapped persons.
§§ 507.131-507.139 [Reserved]
§ 507.140 Employment.
No qualified handicapped person shall, on the basis of handicap, be subjected to discrimination in employment under any program or activity conducted by the agency. The definitions, requirements, and procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791), as established by the Equal Employment Opportunity Commission in 29 CFR part 1613, shall apply to employment in federally conducted programs or activities.
§§ 507.141-507.148 [Reserved]
§ 507.149 Program accessibility: Discrimination prohibited.
Except as otherwise provided in § 507.150, no qualified handicapped person shall, because the agency’s facilities are inaccessible to or unusable by handicapped persons, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity conducted by the agency.
§ 507.150 Program accessibility: Existing facilities.
(a) General. The agency shall operate each program or activity so that the program or activity, when viewed in its entirety, is readily accessible to and usable by handicapped persons. This paragraph does not –
(1) Necessarily require the agency to make each of its existing facilities accessible to and usable by handicapped persons;
(2) In the case of historic preservation programs, require the agency to take any action that would result in a substantial impairment of significant historic features of an historic property; or
(3) Require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with § 507.150(a) would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the agency head or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that handicapped persons receive the benefits and services of the program or activity.
(b) Methods – (1) General. The agency may comply with the requirements of this section through such means as redesign of equipment, reassignment of services to accessible buildings, assignment of aides to beneficiaries, home visits, delivery of services at alternate accessible sites, alteration of existing facilities and construction of new facilities, use of accessible rolling stock, or any other methods that result in making its programs or activities readily accessible to and usable by handicapped persons. The agency is not required to make structural changes in existing facilities where other methods are effective in achieving compliance with this section. The agency, in making alterations to existing buildings, shall meet accessibility requirements to the extent compelled by the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), and any regulations implementing it. In choosing among available methods for meeting the requirements of this section, the agency shall give priority to those methods that offer programs and activities to qualified handicapped persons in the most integrated setting appropriate.
(2) Historic preservation programs. In meeting the requirements of § 507.150(a) in historic preservation programs, the agency shall give priority to methods that provide physical access to handicapped persons. In cases where a physical alteration to an historic property is not required because of § 507.150 (a)(2) or (a)(3), alternative methods of achieving program accessibility include –
(i) Using audio-visual materials and devices to depict those portions of an historic property that cannot otherwise be made accessible;
(ii) Assigning persons to guide handicapped persons into or through portions of historic properties that cannot otherwise be made accessible; or
(iii) Adopting other innovative methods.
(c) Time period for compliance. The agency shall comply with the obligations established under this section by October 21, 1986, except that where structural changes in facilities are undertaken, such changes shall be made by August 22, 1989, but in any event as expeditiously as possible.
(d) Transition plan. In the event that structural changes to facilities will be undertaken to achieve program accessibility, the agency shall develop, by February 23, 1987, a transition plan setting forth the steps necessary to complete such changes. The agency shall provide an opportunity to interested persons, including handicapped persons or organizations representing handicapped persons, to participate in the development of the transition plan by submitting comments (both oral and written). A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum –
(1) Identify physical obstacles in the agency’s facilities that limit the accessibility of its programs or activities to handicapped persons;
(2) Describe in detail the methods that will be used to make the facilities accessible;
(3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; and
(4) Indicate the official responsible for implementation of the plan.
§ 507.151 Program accessibility: New construction and alterations.
Each building or part of a building that is constructed or altered by, on behalf of, or for the use of the agency shall be designed, constructed, or altered so as to be readily accessible to and usable by handicapped persons. The definitions, requirements, and standards of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this section.
§§ 507.152-507.159 [Reserved]
§ 507.160 Communications.
(a) The agency shall take appropriate steps to ensure effective communication with applicants, participants, personnel of other Federal entities, and members of the public.
(1) The agency shall furnish appropriate auxiliary aids where necessary to afford a handicapped person an equal opportunity to participate in, and enjoy the benefits of, a program or activity conducted by the agency.
(i) In determining what type of auxiliary aid is necessary, the agency shall give primary consideration to the requests of the handicapped person.
(ii) The agency need not provide individually prescribed devices, readers for personal use or study, or other devices of a personal nature.
(2) Where the agency communicates with applicants and beneficiaries by telephone, telecommunication devices for deaf person (TDD’s) or equally effective telecommunication systems shall be used.
(b) The agency shall ensure that interested persons, including persons with impaired vision or hearing, can obtain information as to the existence and location of accessible services, activities, and facilities.
(c) The agency shall provide signage at a primary entrance to each of its inaccessible facilities, directing users to a location at which they can obtain information about accessible facilities. The international symbol for accessibility shall be used at each primary entrance of an accessible facility.
(d) This section does not require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with § 507.160 would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the agency head or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action required to comply with this section would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that, to the maximum extent possible, handicapped persons receive the benefits and services of the program or activity.
§§ 507.161-507.169 [Reserved]
§ 507.170 Compliance procedures.
(a) Except as provided in paragraph (b) of this section, this section applies to all allegations of discrimination on the basis of handicap in programs or activities conducted by the agency.
(b) The agency shall process complaints alleging violations of section 504 with respect to employment according to the procedures established by the Equal Employment Opportunity Commission in 29 CFR part 1614 pursuant to section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791).
(c) The Director, Bureau of Administration shall be responsible for coordinating implementation of this section. Complaints may be sent to the Director, Bureau of Administration, Federal Maritime Commission, 800 North Capitol Street, N.W., Washington, DC 20573.
(d) The agency shall accept and investigate all complete complaints for which it has jurisdiction. All complete complaints must be filed within 180 days of the alleged act of discrimination. The agency may extend this time period for good cause.
(e) If the agency receives a complaint over which it does not have jurisdiction, it shall promptly notify the complainant and shall make reasonable efforts to refer the complaint to the appropriate government entity.
(f) The agency shall notify the Architectural and Transportation Barriers Compliance Board upon receipt of any complaint alleging that a building or facility that is subject to the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), or section 502 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 792), is not readily accessible to and usable by handicapped persons.
(g) Within 180 days of the receipt of a complete complaint for which it has jurisdiction, the agency shall notify the complainant of the results of the investigation in a letter containing –
(1) Findings of fact and conclusions of law;
(2) A description of a remedy for each violation found; and
(3) A notice of the right to appeal.
(h) Appeals of the findings of fact and conclusions of law or remedies must be filed by the complainant within 90 days of receipt from the agency of the letter required by § 507.170(g). The agency may extend this time for good cause.
(i) Timely appeals shall be accepted and processed by the head of the agency.
(j) The head of the agency shall notify the complainant of the results of the appeal within 60 days of the receipt of the request. If the head of the agency determines that additional information is needed from the complainant, he or she shall have 60 days from the date of receipt of the additional information to make his or her determination on the appeal.
(k) The time limits cited in paragraphs (g) and (j) of this section may be extended with the permission of the Assistant Attorney General.
(l) The agency may delegate its authority for conducting complaint investigations to other Federal agencies, except that the authority for making the final determination may not be delegated to another agency.
§§ 507.171-507.999 [Reserved]
PART 508 – EMPLOYEE ETHICAL CONDUCT STANDARDS AND FINANCIAL DISCLOSURE REGULATIONS
§ 508.101 Cross-referrence to employee ethical conduct standards and financial disclosure regulations.
Employees of the Federal Maritime Commission (“FMC”) should refer to the executive branch-wide Standards of Ethical Conduct at 5 CFR part 2635, and the executive branch-wide financial disclosure regulation at 5 CFR part 2634.
SUBCHAPTER B – REGULATIONS AFFECTING OCEAN SHIPPING IN FOREIGN COMMERCE
PART 515 – LICENSING, REGISTRATION, FINANCIAL RESPONSIBILITY REQUIREMENTS AND GENERAL DUTIES FOR OCEAN TRANSPORTATION INTERMEDIARIES
Subpart A – General
§ 515.1 Scope.
(a) This part sets forth regulations providing for the licensing and registration as ocean transportation intermediaries of persons who wish to carry on the business of providing intermediary services, including the grounds and procedures for revocation and suspension of licenses and registrations.
This part also prescribes the financial responsibility requirements and the duties and responsibilities of ocean transportation intermediaries, and regulations concerning practices of ocean transportation intermediaries with respect to common carriers.
(b) Information obtained under this part is used to determine the qualifications of ocean transportation intermediaries and their compliance with shipping statutes and regulations. Failure to follow the provisions of this part may result in denial, revocation or suspension of an ocean transportation intermediary license or registration. Persons operating without the proper license or registration may be subject to civil penalties not to exceed $9,000 for each such violation, unless the violation is willfully and knowingly committed, in which case the amount of the civil penalty may not exceed $45,000 for each violation; for other violations of the provisions of this part, the civil penalties range from $9,000 to $45,000 for each violation (46 U.S.C. 41107-41109). Each day of a continuing violation shall constitute a separate violation.
§ 515.2 Definitions.
The terms used in this part are defined as follows:
(a) Act or Shipping Act means the Shipping Act of 1984, as amended. 46 U.S.C. 40101-41309.
(b) Beneficial interest includes a lien or interest in or right to use, enjoy, profit, benefit, or receive any advantage, either proprietary or financial, from the whole or any part of a shipment of cargo where such interest arises from the financing of the shipment or by operation of law, or by agreement, express or implied. The term “beneficial interest” shall not include any obligation in favor of an ocean transportation intermediary arising solely by reason of the advance of out-of-pocket expenses incurred in dispatching a shipment.
(c) Branch office means any office in the United States established by or maintained by or under the control of a licensee for the purpose of rendering intermediary services, which office is located at an address different from that of the licensee’s designated home office.
(d) Commission means the Federal Maritime Commission.
(e) Common carrier means any person holding itself out to the general public to provide transportation by water of passengers or cargo between the United States and a foreign country for compensation that:
(1) Assumes responsibility for the transportation from the port or point of receipt to the port or point of destination, and
(2) Utilizes, for all or part of that transportation, a vessel operating on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, chemical parcel tanker, or by a vessel when primarily engaged in the carriage of perishable agricultural commodities:
(i) If the common carrier and the owner of those commodities are wholly-owned, directly or indirectly, by a person primarily engaged in the marketing and distribution of those commodities, and
(ii) Only with respect to those commodities.
(f) Compensation means payment by a common carrier to a freight forwarder for the performance of services as specified in § 515.2(h).
(g) Freight forwarding fee means charges billed by an ocean freight forwarder to a shipper, consignee, seller, purchaser, or any agent thereof, for the performance of freight forwarding services.
(h) Freight forwarding services refers to the dispatching of shipments on behalf of others, in order to facilitate shipment by a common carrier, which may include, but are not limited to, the following:
(1) Ordering cargo to port;
(2) Preparing and/or processing export documents, including the required `electronic export information’;
(3) Booking, arranging for or confirming cargo space;
(4) Preparing or processing delivery orders or dock receipts;
(5) Preparing and/or processing common carrier bills of lading or other shipping documents;
(6) Preparing or processing consular documents or arranging for their certification;
(7) Arranging for warehouse storage;
(8) Arranging for cargo insurance;
(9) Assisting with clearing shipments in accordance with United States Government export regulations;
(10) Preparing and/or sending advance notifications of shipments or other documents to banks, shippers, or consignees, as required;
(11) Handling freight or other monies advanced by shippers, or remitting or advancing freight or other monies or credit in connection with the dispatching of shipments;
(12) Coordinating the movement of shipments from origin to vessel; and
(13) Giving expert advice to exporters concerning letters of credit, other documents, licenses or inspections, or on problems germane to the cargoes’ dispatch.
(i) From the United States means oceanborne export commerce from the United States, its territories, or possessions, to foreign countries.
(j) Licensee is any person licensed by the Federal Maritime Commission as an ocean transportation intermediary.
(k) Non-vessel-operating common carrier services refers to the provision of transportation by water of cargo between the United States and a foreign country for compensation without operating the vessels by which the transportation is provided, and may include, but are not limited to, the following:
(1) Purchasing transportation services from a common carrier and offering such services for resale to other persons;
(2) Payment of port-to-port or multimodal transportation charges;
(3) Entering into affreightment agreements with underlying shippers;
(4) Issuing bills of lading or other shipping documents;
(5) Assisting with clearing shipments in accordance with U.S. government regulations;
(6) Arranging for inland transportation and paying for inland freight charges on through transportation movements;
(7) Paying lawful compensation to ocean freight forwarders;
(8) Coordinating the movement of shipments between origin or destination and vessel;
(9) Leasing containers;
(10) Entering into arrangements with origin or destination agents;
(11) Collecting freight monies from shippers and paying common carriers as a shipper on NVOCC’s own behalf.
(l) Ocean common carrier means a common carrier that operates, for all or part of its common carrier service, a vessel on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, or chemical parcel-tanker.
(m) Ocean transportation intermediary (OTI) means an ocean freight forwarder or a non-vessel-operating common carrier. For the purposes of this part, the term:
(1) Ocean freight forwarder (OFF) means a person that –
(i) In the United States, dispatches shipments from the United States via a common carrier and books or otherwise arranges space for those shipments on behalf of shippers; and
(ii) Processes the documentation or performs related activities incident to those shipments; and
(2) Non-vessel-operating common carrier (NVOCC) means a common carrier that does not operate the vessels by which the ocean transportation is provided, and is a shipper in its relationship with an ocean common carrier.
(n) Person means individuals, corporations, companies, including limited liability companies, associations, firms, partnerships, societies and joint stock companies existing under or authorized by the laws of the United States or of a foreign country.
(o) Principal refers to the shipper, consignee, seller, or purchaser of property, and to anyone acting on behalf of such shipper, consignee, seller, or purchaser of property, who employs the services of a licensed freight forwarder to facilitate the ocean transportation of such property.
(p) Qualifying individual (QI) means an individual who meets the experience and character requirements of section 19 of the Shipping Act (46 U.S.C. 40901-40904) and this part.
(q) Reduced forwarding fees means charges to a principal for forwarding services that are below the licensed ocean freight forwarder’s usual charges for such services.
(r) Registered non-vessel-operating common carrier (registered NVOCC) means an NVOCC whose primary place of business is located outside the United States and who elects not to become licensed as an NVOCC, but to register with the Commission as provided in § 515.19, post a bond or other surety in the required amount, and publish a tariff as required by 46 CFR part 520.
(s) Shipment means all of the cargo carried under the terms of a single bill of lading.
(t) Shipper means:
(1) A cargo owner;
(2) The person for whose account the ocean transportation is provided;
(3) The person to whom delivery is to be made;
(4) A shippers’ association; or
(5) A non-vessel-operating common carrier that accepts responsibility for payment of all charges applicable under the tariff or service contract.
(u) Special contract is a contract for ocean freight forwarding services which provides for a periodic lump sum fee.
(v) Transportation-related activities which are covered by the financial responsibility obtained pursuant to this part include, to the extent involved in the foreign commerce of the United States, any activity performed by an ocean transportation intermediary that is necessary or customary in the provision of transportation services to a customer, but are not limited to the following:
(1) For an ocean transportation intermediary operating as an ocean freight forwarder, the freight forwarding services enumerated in paragraph (h) of this section, and
(2) For an ocean transportation intermediary operating as a non-vessel-operating common carrier, the non-vessel-operating common carrier services enumerated in § 515.2(k).
(w) United States includes the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Marianas, and all other United States territories and possessions.
§ 515.3 License; when required.
(a) Except as otherwise provided in this part, no person in the United States may advertise, hold oneself out, or act as an ocean transportation intermediary unless that person holds a valid license issued by the Commission.
(b) For purposes of this part, a person is considered to be “in the United States” if such person is resident in, or incorporated or established under, the laws of the United States.
§ 515.4 License; when not required.
A license is not required in the following circumstances:
(a) Shippers. Any person whose primary business is the sale of merchandise may, without a license, dispatch and perform freight forwarding services on behalf of its own shipments, or on behalf of shipments or consolidated shipments of a parent, subsidiary, affiliate, or associated company. Such person shall not receive compensation from the common carrier for any services rendered in connection with such shipments.
(b) Agents, employees, or branch offices of an ocean transportation intermediary.
(1) A disclosed agent, individual employee, or branch office of an ocean transportation intermediary is not required to be licensed in order to act on behalf of and in the name of such ocean transportation intermediary.
(2) An ocean transportation intermediary must report branch offices to the Commission in Form FMC-18 or under the procedures in § 515.20(e).
(3) An ocean transportation intermediary is fully responsible for the acts and omissions of any of its employees and agents that are performed in connection with the conduct of the ocean transportation intermediary’s business.
(c) Common carriers. A common carrier, or agent thereof, may perform ocean freight forwarding services without a license only with respect to cargo carried under such carrier’s own bill of lading. Charges for such forwarding services shall be assessed in conformance with the carrier’s published tariffs.
(d) Federal military and civilian household goods. Any person which exclusively transports used household goods and personal effects for the account of the Department of Defense, or for the account of the federal civilian executive agencies shipping under the International Household Goods Program administered by the General Services Administration, or both, is not subject to the requirements of subpart B of this part, but may be subject to other requirements, such as alternative surety bonding, imposed by the Department of Defense, or the General Services Administration.
§ 515.5 Forms and fees.
(a) Forms. License Application Form FMC-18 is found at the Commission’s website www.fmc.gov for completion on-line by applicants and licensees. Foreign-based Unlicensed NVOCC Registration/Renewal Form FMC-65 and financial responsibility Forms FMC-48, FMC-67, FMC-68, FMC-69 may be obtained from the Commission’s website at www.fmc.gov, from the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573, or from any of the Commission’s Area Representatives.
(b) Filing of license application forms. All application forms are to be filed electronically.
(c) Fees. (1)(i) All fees shall be paid by:
(A) Money order, certified, cashier’s, or personal check payable to the order of the “Federal Maritime Commission;”
(B) Pay.gov;
(C) The Automated Clearing House system; or
(D) By other means authorized by the Director of the Commission’s Office of Budget and Finance.
(ii) Applications or registrations shall be rejected unless the applicable fee and any bank charges assessed against the Commission are received by the Commission within ten (10) business days after submission of the application or registration. In any instance where an application has been processed in whole or in part, the fee will not be refunded.
(2) Fees under this part shall be as follows:
(i) Application for new OTI license as required by § 515.12(a): Filing $250.
(ii) Application for change to OTI license or license transfer as required by § 515.20(a) and (b): Filing $125.
Subpart B – Eligibility and Procedure for Licensing and Registration
§ 515.11 Basic requirements for licensing; eligibility.
(a) Necessary qualifications. To be eligible for an ocean transportation intermediary license, the applicant must demonstrate to the Commission that:
(1) It possesses the necessary experience, that is, its qualifying individual has a minimum of three (3) years’ experience in ocean transportation intermediary activities in the United States, and the necessary character to render ocean transportation intermediary services. A foreign NVOCC seeking to be licensed under this part must demonstrate that its qualifying individual has a minimum 3 years’ experience in ocean transportation intermediary activities, and the necessary character to render ocean transportation intermediary services. The required OTI experience of the QI of a foreign-based NVOCC seeking to become licensed under this part (foreign-based licensed NVOCC) may be experience acquired in the U.S. or a foreign country with respect to shipments in the United States oceanborne foreign commerce.
(2) In addition to information provided by the applicant and its references, the Commission may consider all information relevant to determining whether an applicant has the necessary character to render ocean transportation intermediary services, including but not limited to, information regarding: Violations of any shipping laws, or statutes relating to the import, export, or transport of merchandise in international trade; operating as an OTI without a license or registration; state and federal felonies and misdemeanors; voluntary and non-voluntary bankruptcies not discharged; outstanding tax liens and other court and administrative judgments and proceedings; compliance with immigration status requirements described in 49 CFR 1572.105; denial, revocation, or suspension of a Transportation Worker Identification Credential under 49 CFR 1572; and the denial, revocation, or suspension of a customs broker’s license under 19 CFR subpart B, section 111. The required OTI experience of the QI of a foreign-based NVOCC seeking to become licensed under this part (foreign-based licensed NVOCC) may be acquired in the U.S. or a foreign country with respect to shipments in the United States oceanborne foreign commerce.
(b) Qualifying individual. The following individuals must qualify the applicant for a license:
(1) Sole proprietorship. The applicant sole proprietor.
(2) Partnership. At least one of the active managing partners, unless the partners are entities, such as corporations, in which case an officer, member, or manager of one of the entities as long as the entity is a general partner.
(3) Corporation. At least one of the active corporate officers.
(4) Limited liability company. One of the members or managers, or an individual in an equivalent position in the LLC as expressly set forth in the LLC operating agreement.
(c) Affiliates of intermediaries. An independently qualified applicant may be granted a separate license to carry on the business of providing ocean transportation intermediary services even though it is associated with, under common control with, or otherwise related to another ocean transportation intermediary through stock ownership or common directors or officers, if such applicant submits: A separate application and fee, and a valid instrument of financial responsibility in the form and amount prescribed under § 515.21. The qualifying individual of one active licensee shall not also be designated as the qualifying individual of an applicant for another ocean transportation intermediary license, unless both entities are commonly owned or where one directly controls the other.
(d) Common carrier. A common carrier or agent thereof which meets the requirements of this part may be licensed as an ocean freight forwarder to dispatch shipments moving on other than such carrier’s own bills of lading subject to the provisions of § 515.42(g).
(e) Foreign-based licensed NVOCC. A foreign-based NVOCC that elects to obtain a license must establish a presence in the United States by opening an unincorporated office that is resident in the United States and is qualified to do business where it is located.
§ 515.12 Application for license.
(a) Application and forms.(1) Any person who wishes to obtain a license to operate as an ocean transportation intermediary shall submit electronically a completed application Form FMC-18 (Application for a License as an Ocean Transportation Intermediary) in accordance with the automated FMC-18 filing system and corresponding instructions.
A filing fee shall be paid, as required under § 515.5(c). Notice of filing of each application shall be published on the Commission’s Web site www.fmc.gov and shall state the name and address of the applicant and the name of the QI. If the applicant is a corporation or partnership, the names of the officers or partners thereof may be published. For an LLC, the names of the managers, members or officers, as applicable, may be published.
(2) An individual who is applying for a license as a sole proprietor must complete the following certification:
(b) Rejection. Any application which appears upon its face to be incomplete or to indicate that the applicant fails to meet the licensing requirements of the Act, or the Commission’s regulations, may be rejected and a notice shall be sent to the applicant, together with an explanation of the reasons for rejection, and the filing fee shall be refunded in full. Persons who have had their applications rejected may submit a new Form FMC-18 at any time, together with the required filing fee.
(c) Failure to provide necessary information and documents. In the event an applicant fails to provide documents or information necessary to complete processing of its application, notice will be sent to the applicant identifying the necessary information and documents and establishing a date for submission by the applicant. Failure of the applicant to submit the identified materials by the established date will result in the closing of its application without further processing. In the event an application is closed as a result of the applicant’s failure to provide information or documents necessary to complete processing, the filing fee will not be returned. Persons who have had their applications closed under this section may reapply at any time by submitting a new application with the required filing fee.
(d) Investigation. Each applicant shall be investigated in accordance with § 515.13.
(e) Changes in fact. Each applicant shall promptly advise the Commission of any material changes in the facts submitted in the application. Any unreported change may delay the processing and investigation of the application and result in rejection, closing, or denial of the application.
§ 515.13 Investigation of applicants.
The Commission shall conduct an investigation of the applicant’s qualifications for a license. Such investigations may address:
(a) The accuracy of the information submitted in the application;
(b) The integrity and financial responsibility of the applicant;
(c) The character of the applicant and its qualifying individual; and
(d) The length and nature of the qualifying individual’s experience in handling ocean transportation intermediary duties.
§ 515.14 Issuance, renewal, and use of license.
(a) Qualification necessary for issuance. (1) The Commission will issue a license if it determines, as a result of its investigation, that the applicant possesses the necessary experience and character to render ocean transportation intermediary services; has filed the required bond, insurance or other surety; and has electronically submitted Form FMC-1 pursuant to § 520.3 if approved to offer NVOCC service.
(2) If, within 120 days of notification of conditional approval for licensing by the Commission, proof of financial responsibility and, in the case of an NVOCC, the Form FMC-1 is not received, the conditional approval of the application will be invalid. Applicants whose applications/approvals have become invalid may submit a new Form FMC-18, together with the required filing fee, at any time.
(b) To whom issued. The Commission will issue a license only in the name of the applicant, whether the applicant is a sole proprietorship, a partnership, a corporation, or limited liability company. A license issued to a sole proprietor doing business under a trade name shall be in the name of the sole proprietor, indicating the trade name under which the licensee will be conducting business. Only one license shall be issued to any applicant regardless of the number of names under which such applicant may be doing business, and except as otherwise provided in this part, such license is limited exclusively to use by the named licensee and shall not be transferred without prior Commission approval to another person.
(c) Duration of license. Licenses shall be issued for an initial period of not less than one year and not greater than four years as determined by the license number and published on the Commission website. Thereafter, licenses will be renewed for sequential three-year periods upon successful completion of the renewal process in paragraph (d) of this section.
(d) License renewal process. (1) The licensee shall submit the renewal electronically to the Director of the Bureau of Certification and Licensing (BCL) no later than the renewal date as published on the Commission website. The renewal date (month/day) will remain the same for subsequent renewals irrespective of the date on which the license renewal is submitted or when the renewal is accepted by the Commission, unless another renewal date is assigned by the Commission.
(2) Where information identified in an OTI’s license renewal process is changed from that set out in its current Form FMC-18 and requires Commission approval pursuant to § 515.20, the licensee must promptly submit a request for such approval on Form FMC-18 together with the required filing fee.
The licensee may continue to operate as an ocean transportation intermediary during the pendency of the Commission’s approval process.
(3) Though the foregoing license renewal process is not intended to result in a re-evaluation of a licensee’s character, the Commission may review a licensee’s character at any time, including at the time of renewal, based upon information received from the licensee or other sources.
§ 515.15 Denial of license.
If the Commission determines, as a result of its investigation, that the applicant:
(a) Does not possess the necessary experience or character to render intermediary services;
(b) Has failed to respond to any lawful inquiry of the Commission; or
(c) Has made any materially false or misleading statement to the Commission in connection with its application; then, a notice of intent to deny the application shall be sent to the applicant stating the reason(s) why the Commission intends to deny the application. The notice of intent to deny the application will provide, in detail, a statement of the facts supporting denial. An applicant may request a hearing on the proposed denial by submitting to the Secretary, Federal Maritime Commission, Washington, DC 20573, within twenty (20) days of the date of the notice, a statement of reasons why the application should not be denied. Such hearing shall be provided pursuant to the procedures contained in § 515.17. Otherwise, the denial of the application will become effective and the applicant shall be so notified.
§ 515.16 Revocation or suspension of license.
(a) Grounds. Except for the automatic revocation for termination of proof of financial responsibility under § 515.26, a license may be revoked or suspended after notice and an opportunity for a hearing under the procedures of § 515.17. The notice of revocation or suspension will provide, in detail, a statement of the facts supporting the action. The licensee may request a hearing on the proposed revocation or suspension by submitting to the Commission’s Secretary, within twenty (20) days of the date of the notice, a statement of reasons why the license should not be revoked or suspended. Such hearing shall be provided pursuant to the procedures contained in § 515.17. Otherwise, the action regarding the license will become effective. A license may be revoked or suspended for any of the following reasons:
(1) Violation of any provision of the Act, or any other statute or Commission order or regulation related to carrying on the business of an ocean transportation intermediary;
(2) Failure to respond to any lawful order or inquiry by the Commission;
(3) Making a materially false or misleading statement to the Commission in connection with an application for a license or an amendment to an existing license;
(4) A Commission determination that the licensee is not qualified to render intermediary services; or
(5) Failure to honor the licensee’s financial obligations to the Commission.
(b) Notice. The Commission shall publish on the Commission’s Web site www.fmc.gov notice of each revocation and suspension.
§ 515.17 Hearing procedures governing denial, revocation, or suspension of OTI license.
All hearing requests under §§ 515.15 and 515.16 shall be submitted to the Commission’s Secretary. The hearing will be adjudicated under the procedures set forth in subpart X of part 502 of this chapter.
§ 515.18 Application after revocation or denial.
Whenever a license has been revoked or an application has been denied because the Commission has found the licensee or applicant to be not qualified to render ocean transportation intermediary services, any further application within 3 years of the Commission’s notice of revocation or denial, made by such former licensee or applicant or by another applicant employing the same qualifying individual, officer(s), member(s), manager(s) or controlled by persons on whose conduct the Commission based its determination for revocation or denial, shall be reviewed directly by the Commission. If the Commission denies the application, such denial is final and not subject to the hearing procedures described in §§ 515.15 and 515.17.
§ 515.19 Registration of foreign-based unlicensed NVOCC.
(a) Any NVOCC whose primary place of business is located outside the United States and does not elect to become licensed by the Commission shall register with the Commission by submitting to the Director of the Bureau of Certification and Licensing (BCL) a completed registration form, Form FMC-65 (Foreign-based Unlicensed NVOCC Registration/Renewal). A notice of each registration shall be published on the Commission’s Web site www.fmc.gov. It is a violation of the Commission’s regulations implementing the Shipping Act for a foreign-based unlicensed non-vessel-operating common carrier to provide NVOCC services in the U.S. foreign trade without a valid registration and an effective tariff.
(b) A registration form which appears, upon submission, to be substantially incomplete may be rejected. If rejected, a notice, together with the reasons therefore, shall be sent to the foreign-based unlicensed NVOCC. Persons who have had a registration rejected may submit a new registration at any time.
(c) Registrations are complete upon receipt of a registration form which meets the requirements of this section, evidence of financial responsibility pursuant to § 515.21, and Form FMC-1 pursuant to § 520.3.
(d) Registrations shall be effective for a period of three (3) years. Thereafter, registrations will be renewed for sequential three year periods upon submission of an updated registration form.
(e) A tariff shall not be published and NVOCC service shall not commence until the Commission receives valid proof of financial responsibility from the registrant and a Form FMC-1 has been submitted.
(f) Registered NVOCCs must report in writing to BCL any changes, within 30 days of such changes, to: legal name(s) or trade name(s); principal place of business address (including telephone number, facsimile number); contact person and email address (including physical address if different from principal place of business); name of resident agent(s) (including physical address, mailing address, email address, telephone and facsimile number(s), and contact person) in the United States for receipt of service of judicial and administrative process (including subpoenas).
(g) Termination or suspension of registration – (1) Grounds. A registration shall become automatically ineffective for a failure of a registered NVOCC to maintain proof of financial responsibility on file with the Commission. The effectiveness of such a registration may otherwise be terminated or suspended, after notice and the opportunity for a hearing, for any of the following reasons:
(i) Violation of any provision of the Act, or any other statute or Commission order or regulation related to carrying on the business of an ocean transportation intermediary;
(ii) Failure to respond to any lawful order or inquiry by the Commission or an authorized Commission representative;
(iii) Making a materially false or misleading statement to the Commission in connection with a registration or renewal thereof;
(iv) Failure to honor financial obligations to the Commission;
(v) Failure to timely renew a registration;
(vi) Failure to maintain a Form FMC-1 or a tariff in compliance with 46 CFR part 520;
(vii) Knowingly and willfully accepting cargo from or transporting cargo for the account of:
(A) an NVOCC that does not have a published tariff as required by 46 U.S.C. 40501 and part 520 of this chapter, and a bond, insurance, or other surety as required by 46 U.S.C. 40902 and this part; or
(B) an OFF that does not have a bond, insurance, or other surety as required by 46 U.S.C. 40902 and this part; and
(viii) Failure to designate and maintain a person in the United States as legal agent for the receipt of judicial and administrative process, including subpoenas, as required by § 515.24.
(2) Hearing procedure. Registrants may request a hearing for terminations or suspensions of the effectiveness of their registrations following the same procedures set forth in § 515.17 (governing hearing requests for denials, revocations and suspensions of licenses).
(3) Publication of Notice. The Commission shall publish on the Commission’s Web site, www.fmc.gov, a notice of each termination or suspension.
§ 515.20 Changes in organization.
(a) Licenses. The following changes in an existing licensee’s organization require prior approval of the Commission, and application for such status change or license transfer shall be made on Form FMC-18, filed with the Commission’s Bureau of Certification and Licensing, and accompanied by the fee required under § 515.5(c):
(1) Transfer of a corporate license to another person;
(2) Change in ownership of a sole proprietorship;
(3) Any change in the business structure of a licensee from or to a sole proprietorship, partnership, limited liability company, or corporation, whether or not such change involves a change in ownership;
(4) Any change in a licensee’s name, including adding or deleting a trade name relating to its OTI services; or
(5) Change in the identity or status of the designated QI, except as described in paragraphs (b) and (c) of this section.
(b) Operation after death of sole proprietor. In the event that the owner of a licensed sole proprietorship dies, the licensee’s executor, administrator, heir(s), or assign(s) may continue operation of such proprietorship solely with respect to shipments for which the deceased sole proprietor had undertaken to act as an ocean transportation intermediary pursuant to the existing license, if the death is reported within 30 days to the Commission and to all principals and shippers for whom services on such shipments are to be rendered. The acceptance or solicitation of any other shipments is expressly prohibited until a new license has been issued. Applications for a new license by the executor, administrator, heir(s), or assign(s) shall be made on Form FMC-18, and shall be accompanied by the fee required under § 515.5(c).
(c) Operation after retirement, resignation, or death of QI. When a partnership, LLC, or corporation has been licensed on the basis of the qualifications of one or more of the partners, members, managers or officers thereof, and the QI no longer serves as a full-time employee with the OTI or is no longer responsible for the licensee’s OTI activities, the licensee shall report such change to the Commission within thirty (30) days. Within the same 30-day period, the licensee shall furnish to the Commission the name(s) and detailed intermediary experience of any other active partner(s), member(s), manager(s) or officer(s) who may qualify the licensee. Such QI(s) must meet the applicable requirements set forth in § 515.11(a) through (c). The licensee may continue to operate as an ocean transportation intermediary while the Commission investigates the qualifications of the newly designated partner, member, manager, or officer.
(d) Acquisition of one or more additional licensees. In the event a licensee acquires one or more additional licensees, for the purpose of merger, consolidation, or control, the acquiring licensee shall advise the Commission of such acquisition, including any change in ownership, within 30 days after such change occurs by submitting an amended Form FMC-18. No application fee is required when reporting this change.
(e) Other changes. Other changes in material fact of a licensee shall be reported within thirty (30) days of such changes, in writing by mail or email ([email protected]) to the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573. Material changes include, but are not limited to: Changes in business address; any criminal indictment or conviction of a licensee, QI, or officer; any voluntary or involuntary bankruptcy filed by or naming a licensee, QI, or officer; changes of five (5) percent or more of the common equity ownership or voting securities of the OTI; or, the addition or reduction of one or more partners of a licensed partnership, one or more members or managers of a Limited Liability Company, or one or more branch offices. No fee shall be charged for reporting such changes.
Subpart C – Financial Responsibility Requirements; Claims Against Ocean Transportation Intermediaries
§ 515.21 Financial responsibility requirements.
(a) Form and amount. Except as otherwise provided in this part, no person may advertise, hold oneself out, or act as an ocean transportation intermediary unless that person furnishes a bond, proof of insurance, or other surety in a form and amount determined by the Commission to insure financial responsibility. The bond, insurance, or other surety covers the transportation-related activities of an ocean transportation intermediary.
(1) Any person in the United States advertising, holding oneself out, or acting as an ocean freight forwarder as defined in § 515.2(m)(1) shall furnish evidence of financial responsibility in the amount of $50,000.
(2) Any person in the United States advertising, holding oneself out, or acting as an NVOCC as defined in § 515.2(m)(2) shall furnish evidence of financial responsibility in the amount of $75,000.
(3) Any registered NVOCC, as defined in § 515.2(r), shall furnish evidence of financial responsibility in the amount of $150,000. Such registered NVOCC shall be strictly responsible for the acts and omissions of its employees and agents, wherever they are located.
(b) Group financial responsibility. When a group or association of ocean transportation intermediaries accepts liability for an ocean transportation intermediary’s financial responsibility for such ocean transportation intermediary’s transportation-related activities under the Act, the group or association of ocean transportation intermediaries shall file a group bond form, insurance form or guaranty form, clearly identifying each ocean transportation intermediary covered, before a covered ocean transportation intermediary may provide ocean transportation intermediary services. In such cases, a group or association must establish financial responsibility in an amount equal to the lesser of the amount required by paragraph (a) of this section for each member, or $3,000,000 in aggregate. A group or association of ocean transportation intermediaries may also file an optional bond rider as provided in § 515.25(b).
(c) Common trade name. Where more than one person operates under a common trade name, separate proof of financial responsibility is required covering each corporation or person separately providing ocean transportation intermediary services.
(d) Federal military and civilian household goods. Any person which exclusively transports used household goods and personal effects for the account of the Department of Defense, or for the account of the federal civilian executive agencies shipping under the International Household Goods Program administered by the General Services Administration, or both, is not subject to the requirements of subpart C of this part, but may be subject to other requirements, such as alternative surety bonding, imposed by the Department of Defense, or the General Services Administration.
§ 515.22 Proof of financial responsibility.
Prior to the date it commences furnishing ocean transportation intermediary services, every ocean transportation intermediary shall establish its financial responsibility for the purpose of this part by one of the following methods:
(a) Surety bond, by filing with the Commission a valid bond on Form FMC-48. Bonds must be issued by a surety company found acceptable by the Secretary of the Treasury;
(b) Insurance, by filing with the Commission evidence of insurance on Form FMC-67. The insurance must provide coverage for damages, reparations or penalties arising from any transportation-related activities under the Act of the insured ocean transportation intermediary. This evidence of financial responsibility shall be accompanied by: in the case of a financial rating, the Insurer’s financial rating on the rating organization’s letterhead or designated form; in the case of insurance provided by Underwriters at Lloyd’s, documentation verifying membership in Lloyd’s; and in the case of insurance provided by surplus lines insurers, documentation verifying inclusion on a current “white list” issued by the Non-Admitted Insurers’ Information Office of the National Association of Insurance Commissioners. The Insurer must certify that it has sufficient and acceptable assets located in the United States to cover all damages arising from the transportation-related activities of the insured ocean transportation intermediary as specified under the Act. The insurance must be placed with:
(1) An Insurer having a financial rating of Class V or higher under the Financial Size Categories of A.M. Best & Company, or equivalent from an acceptable international rating organization;
(2) Underwriters at Lloyd’s; or
(3) Surplus lines insurers named on a current “white list” issued by the Non-Admitted Insurers’ Information Office of the National Association of Insurance Commissioners; or
(c) Guaranty, by filing with the Commission evidence of guaranty on Form FMC-68. The guaranty must provide coverage for damages, reparations or penalties arising from any transportation-related activities under the Act of the covered ocean transportation intermediary. This evidence of financial responsibility shall be accompanied by: in the case of a financial rating, the Guarantor’s financial rating on the rating organization’s letterhead or designated form; in the case of a guaranty provided by Underwriters at Lloyd’s, documentation verifying membership in Lloyd’s; and in the case of a guaranty provided by surplus lines insurers, documentation verifying inclusion on a current “white list” issued by the Non-Admitted Insurers’ Information Office of the National Association of Insurance Commissioners. The Guarantor must certify that it has sufficient and acceptable assets located in the United States to cover all damages arising from the transportation-related activities of the covered ocean transportation intermediary as specified under the Act. The guaranty must be placed with:
(1) A Guarantor having a financial rating of Class V or higher under the Financial Size Categories of A.M. Best & Company, or equivalent from an acceptable international rating organization;
(2) Underwriters at Lloyd’s; or
(3) Surplus lines insurers named on a current “white list” issued by the Non-Admitted Insurers’ Information Office of the National Association of Insurance Commissioners; or
(d) Evidence of financial responsibility of the type provided for in paragraphs (a), (b) and (c) of this section established through and filed with the Commission by a group or association of ocean transportation intermediaries on behalf of its members, subject to the following conditions and procedures:
(1) Each group or association of ocean transportation intermediaries shall notify the Commission of its intention to participate in such a program and furnish documentation as will demonstrate its authenticity and authority to represent its members, such as articles of incorporation, bylaws, etc.;
(2) Each group or association of ocean transportation intermediaries shall provide the Commission with a list certified by its Chief Executive Officer containing the names of those ocean transportation intermediaries to which it will provide coverage; the manner and amount of existing coverage each covered ocean transportation intermediary has; an indication that the existing coverage provided each ocean transportation intermediary is provided by a surety bond issued by a surety company found acceptable to the Secretary of the Treasury, or by insurance or guaranty issued by a firm meeting the requirements of paragraphs (b) or (c) of this section with coverage limits specified above in § 515.21; and the name, address and facsimile number of each surety, insurer or guarantor providing coverage pursuant to this section. Each group or association of ocean transportation intermediaries or its financial responsibility provider shall notify the Commission within 30 days of any changes to its list;
(3) The group or association shall provide the Commission with a sample copy of each type of existing financial responsibility coverage used by member ocean transportation intermediaries;
(4) Each group or association of ocean transportation intermediaries shall be responsible for ensuring that each member’s financial responsibility coverage allows for claims to be made in the United States against the Surety, Insurer or Guarantor for any judgment for damages against the ocean transportation intermediary arising from its transportation-related activities under the Act, or order for reparations issued pursuant to section 11 of the Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against the ocean transportation intermediary pursuant to section 13 of the Act (46 U.S.C. 41107-41109). Each group or association of ocean transportation intermediaries shall be responsible for requiring each member ocean transportation intermediary to provide it with valid proof of financial responsibility annually;
(5) Where the group or association of ocean transportation intermediaries determines to secure on behalf of its members other forms of financial responsibility, as specified by this section, for damages, reparations or penalties not covered by a member’s individual financial responsibility coverage, such additional coverage must:
(i) Allow claims to be made in the United States directly against the group or association’s Surety, Insurer or Guarantor for damages against each covered member ocean transportation intermediary arising from each covered member ocean transportation intermediary’s transportation-related activities under the Act, or order for reparations issued pursuant to section 11 of the Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against each covered member ocean transportation intermediary pursuant to section 13 of the Act (46 U.S.C. 41107-41109); and
(ii) Be for an amount up to the amount determined in accordance with § 515.21(b), taking into account a member’s individual financial responsibility coverage already in place. In the event of a claim against a group bond, the bond must be replenished up to the original amount of coverage within 30 days of payment of the claim; and
(iii) be in excess of a member’s individual financial responsibility coverage already in place; and
(6) The coverage provided by the group or association of ocean transportation intermediaries on behalf of its members shall be provided by:
(i) in the case of a surety bond, a surety company found acceptable to the Secretary of the Treasury and issued by such a surety company on Form FMC-69; and
(ii) in the case of insurance and guaranty, a firm having a financial rating of Class V or higher under the Financial Size Categories of A.M. Best & Company or equivalent from an acceptable international rating organization, Underwriters at Lloyd’s, or surplus line insurers named on a current “white list” issued by the Non-Admitted Insurers’ Information Office of the National Association of Insurance Commissioners and issued by such firms on Form FMC-67 and Form FMC-68, respectively.
(e) All forms and documents for establishing financial responsibility of ocean transportation intermediaries prescribed in this section shall be submitted to the Director, Bureau of Certification and Licensing, via email to [email protected]. Such forms and documents must clearly identify the principal’s name; trade name, if any; address; the state of incorporation/formation; and the printed name and title of the signatory.
§ 515.23 Claims against an ocean transportation intermediary.
(a) Who may seek payment. Shippers, common carriers, and other affected persons may seek payment from the bond, insurance, or other surety maintained by an ocean transportation intermediary for damages arising out of its ocean transportation-related activities. The Commission may also seek payment of civil penalties assessed under section 13 of the Shipping Act (46 U.S.C. 41107-41109).
(b) Payment pursuant to a claim. (1) If a person does not file a complaint with the Commission pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), but otherwise seeks to pursue a claim against an ocean transportation intermediary bond, insurance, or other surety for damages arising from its transportation-related activities, it shall attempt to resolve its claim with the financial responsibility provider prior to seeking payment on any judgment for damages obtained. When a claimant seeks payment under this section, it simultaneously shall notify both the financial responsibility provider and the ocean transportation intermediary of the claim by mail or courier service. The bond, insurance, or other surety may be available to pay such claim if:
(i) The ocean transportation intermediary consents to payment, subject to review by the financial responsibility provider; or
(ii) The ocean transportation intermediary fails to respond within forty-five (45) days from the date of the notice of the claim to address the validity of the claim, and the financial responsibility provider deems the claim valid.
(2) If the parties fail to reach an agreement in accordance with paragraph (b)(1) of this section within ninety (90) days of the date of the initial notification of the claim, the bond, insurance, or other surety shall be available to pay any final judgment for reparations ordered by the Commission or damages obtained from an appropriate court. The financial responsibility provider shall pay such judgment for damages only to the extent they arise from the transportation-related activities of the ocean transportation intermediary, ordinarily within thirty (30) days, without requiring further evidence related to the validity of the claim; it may, however, inquire into the extent to which the judgment for damages arises from the ocean transportation intermediary’s transportation-related activities.
(c) Notices of court and other claims against OTIs by financial responsibility providers. (1) As provided in each financial responsibility instrument between an OTI and its financial responsibility provider(s), the issuing financial responsibility provider shall submit a notice to the Commission of each claim, court action, or court judgment against the financial responsibility and each claim paid (including the amount) by the provider.
(2) Notices described in paragraph (c)(1) of this section shall be promptly submitted in writing by mail or email ([email protected]) to the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573.
(3) Notices required by this section shall include the name of the claimant, name of the court and case number assigned, and the name and license or organization number of the OTI involved. Such notices may include or attach other information relevant to the claim.
(d) The Federal Maritime Commission shall not serve as depository or distributor to third parties of bond, guaranty, or insurance funds in the event of any claim, judgment, or order for reparation.
(e) Optional bond riders. The Federal Maritime Commission shall not serve as a depository or distributor to third parties of funds payable pursuant to optional bond riders described in § 515.25(b).
§ 515.24 Agent for service of process.
(a) Every ocean transportation intermediary not located in the United States and every group or association of ocean transportation intermediaries not located in the United States which provides financial coverage for the financial responsibility of a member ocean transportation intermediary shall designate and maintain a person in the United States as legal agent for the receipt of judicial and administrative process, including subpoenas.
(b) Service of administrative process, other than subpoenas, may be effected upon the legal agent by dispatching a copy of the document to be served by mail or courier service. Administrative subpoenas shall be served in accordance with § 502.134 of this chapter.
(c) If the designated legal agent cannot be served because of death, disability, unavailability, termination or expiration of the designation, or if a legal agent authorized to receive such service is not designated in compliance with this section, the Secretary of the Federal Maritime Commission will be deemed to be the legal agent for service of process. Any person serving the Secretary must also send to the ocean transportation intermediary, or group or association of ocean transportation intermediaries which provide financial coverage for the financial responsibilities of a member ocean transportation intermediary, by mail or courier service at the ocean transportation intermediary’s, or group’s, address published in its tariff, a copy of each document served upon the Secretary, and shall attest to that service at the time service is made upon the Secretary. For purposes of this paragraph, it is sufficient that a person seeking to serve process on an ocean transportation intermediary, or group of such intermediaries, affirm to the Commission’s Secretary that: they have contacted, or attempted to contact, the designated agent to confirm whether it remained authorized to accept service of process; or, if no legal agent is designated in the tariff, that it has no knowledge of the identity of the ocean transportation intermediary’s legal agent. Designation of the Commission’s Secretary as the legal agent shall survive any cancellation of the OTI’s license or tariff and shall continue for the entire period during which claims may be made under the OTI’s financial responsibility instrument.
(d) Designations of legal agent under paragraphs (a) and (b) of this section and provisions relating to service of process under paragraph (c) of this section shall be published in the ocean transportation intermediary’s tariff, when required, in accordance with part 520 of this chapter.
(e) Every ocean transportation intermediary using a group or association of ocean transportation intermediaries to cover its financial responsibility requirement under § 515.21(b) shall publish the name and address of the group or association’s resident agent for receipt of judicial and administrative process, including subpoenas, in its tariff, when required, in accordance with part 520 of this chapter.
§ 515.25 Filing of proof of financial responsibility.
(a) Filing of proof of financial responsibility – (1) Licenses. Upon notification by the Commission that an applicant has been conditionally approved for licensing, the applicant shall file with the Director of the Commission’s Bureau of Certification and Licensing, proof of financial responsibility in the form and amount prescribed in § 515.21. No license will be issued until the Commission is in receipt of valid proof of financial responsibility.
(2) Registrations. A registration shall not become effective until the applicant has furnished proof of financial responsibility pursuant to § 515.21, has submitted a Form FMC-1, and its published tariff becomes effective pursuant to 46 CFR part 520.
(b) Optional bond rider. Any NVOCC as defined in § 515.2(m)(2), in addition to a bond meeting the requirements of § 515.21(a)(2) or (3), may obtain and file with the Commission proof of an optional bond rider, as provided in Appendix E or Appendix F of this part.
§ 515.26 Termination of financial responsibility.
No license or registration shall remain in effect unless valid proof of a financial responsibility instrument is maintained on file with the Commission. Upon receipt of notice of termination of such financial responsibility, the Commission shall notify the concerned licensee, registrant, or registrant’s legal agent in the United States, by email, mail, courier, or other method reasonably calculated to provide actual notice, at its last known email address or address, that the Commission shall, without hearing or other proceeding, revoke the license or terminate the registration as of the termination date of the financial responsibility instrument, unless the licensee or registrant shall have submitted valid replacement proof of financial responsibility before such termination date. Replacement financial responsibility must bear an effective date no later than the termination date of the expiring financial responsibility instrument.
§ 515.27 Proof of compliance – NVOCC.
(a) No common carrier may knowingly and willfully accept cargo from or transport cargo for the account of:
(1) An NVOCC that does not have a published tariff as required by 46 U.S.C. 40501 and part 520 of this chapter, and a bond, insurance, or other surety as required by 46 U.S.C. 40902 and this part; or
(2) An OFF that does not have a bond, insurance, or other surety as required by 46 U.S.C. 40902 and this part.
(b) A common carrier can obtain proof of an NVOCC or OFF’s compliance with the OTI licensing, registration, tariff and financial responsibility requirements by:
(1) Consulting the Commission’s website www.fmc.gov as provided in paragraph (d) of this section, to verify that the NVOCC or OFF has complied with the applicable licensing, registration, tariff, and financial responsibility requirements; or
(2) Any other appropriate procedure, provided that such procedure is set forth in the carrier’s tariff.
(c) A common carrier that has employed the procedure prescribed in paragraph (b)(1) of this section shall be deemed to have met its obligations under 46 U.S.C. 41104(a)(11), unless the common carrier knew that such NVOCC or OFF was not in compliance with the applicable tariff or financial responsibility requirements.
(d) The Commission will publish at its Web site, www.fmc.gov, a list of the locations of all carrier and conference tariffs, and a list of ocean transportation intermediaries (including a separate list for NVOCCs) who have met all of their applicable licensing, registration, tariff and financial responsibility requirements, current as of the last date on which the list is updated. The Commission will update this list on a periodic basis.
Subpart D – Duties and Responsibilities of Ocean Transportation Intermediaries; Reports to Commission
§ 515.31 General duties.
(a) Licensees and registrants; names and numbers. Each licensee and registrant shall carry on its business only under the name in which it was licensed or registered and only under its license or registration number as assigned by the Commission. When the licensee’s or registrant’s name appears on shipping documents, its Commission license or registration number shall also be included.
(b) Stationery and billing forms. The name and license or registration number of each OTI shall be permanently imprinted on the licensee’s or registrant’s office stationery and billing forms.
(c) Use of license or registration by others; prohibition. No OTI shall permit its name, license, license number, registration, or registration number to be used by any person who is not an employee or an agent of the OTI. An entity that also provides OTI services in its own name and not on behalf of a licensed or registered OTI must be separately licensed under this part and must provide proof of its own financial responsibility and publish a tariff, if applicable. A branch office of an OTI may use the license of the OTI, provided that the address of the branch office has been reported to the Commission in Form FMC-18 or pursuant to § 515.20(e).
(d) Arrangements with ocean transportation intermediaries whose licenses have been revoked. Unless prior written approval from the Commission has been obtained, no OTI shall, directly or indirectly:
(1) Agree to perform ocean transportation intermediary services on shipments as an associate, correspondent, officer, employee, agent, or sub-agent of any person whose license has been revoked or suspended pursuant to § 515.16, or registration terminated or suspended pursuant to § 515.19(g);
(2) Assist in the furtherance of any ocean transportation intermediary business of an OTI whose license has been revoked;
(3) Share forwarding fees or freight compensation with any such person; or
(4) Permit any such person, directly or indirectly, to participate, through ownership or otherwise, in the control or direction of the ocean transportation intermediary business of the licensee or registrant.
(e) False or fraudulent claims, false information. No OTI shall prepare or file or assist in the preparation or filing of any claim, affidavit, letter of indemnity, or other paper or document concerning an ocean transportation intermediary transaction which it has reason to believe is false or fraudulent, nor shall any such OTI knowingly impart to a principal, shipper, common carrier or other person, false information relative to any ocean transportation intermediary transaction.
(f) Errors and omissions of the principal or shipper. An OTI who has reason to believe that its principal or shipper has not, with respect to a shipment to be handled by such OTI, complied with the laws of the United States, or has made any error or misrepresentation in, or omission from, any export declaration, bill of lading, affidavit, or other document which the principal or shipper executes in connection with such shipment, shall advise its principal or shipper promptly of the suspected noncompliance, error, misrepresentation or omission, and shall decline to participate in any transaction involving such document until the matter is properly and lawfully resolved.
(g) Response to requests of Commission. Upon the request of any authorized representative of the Commission, an OTI shall make available promptly for inspection or reproduction all records and books of account in connection with its ocean transportation intermediary business, and shall respond promptly to any lawful inquiries by such representative. All OTIs are responsible for requiring that, upon the request of any authorized Commission representative, their agents make available all records and books of account relating to ocean transportation intermediary service provided by or for their principals, and respond promptly to any lawful inquiries by such representative.
(h) Express written authority. No OTI shall endorse or negotiate any draft, check, or warrant drawn to the order of its OTI principal or shipper without the express written authority of such OTI principal or shipper.
(i) Accounting to principal or shipper. An OTI shall account to its principal(s) or shipper(s) for overpayments, adjustments of charges, reductions in rates, insurance refunds, insurance monies received for claims, proceeds of C.O.D. shipments, drafts, letters of credit, and any other sums due such principal(s) or shipper(s).
(j) Prohibition. No person may advertise or hold out to act as an OTI unless that person holds a valid OTI license or is registered under this part.
§ 515.32 Freight forwarder duties.
(a) Notice of shipper affiliation. When a licensed freight forwarder is a shipper or seller of goods in international commerce or affiliated with such an entity, the licensed freight forwarder shall have the option of:
(1) Identifying itself as such and/or, where applicable, listing its affiliates on its office stationery and billing forms, or
(2) Including the following notice on such items:
This company is a shipper or seller of goods in international commerce or is affiliated with such an entity. Upon request, a general statement of its business activities and those of its affiliates, along with a written list of the names of such affiliates, will be provided.
(b) Arrangements with unauthorized persons. No licensed freight forwarder shall enter into an agreement or other arrangement (excluding agency arrangements not prohibited by law or this part) with an unlicensed person that bestows any fee, compensation, or other benefit upon the unlicensed person. When a licensed freight forwarder is employed to perform forwarding services by the agent of the person responsible for paying for such services, the licensed freight forwarder shall also transmit a copy of its invoice for services rendered to the person paying those charges.
(c) Information provided to the principal. No licensed freight forwarder shall withhold any information concerning a forwarding transaction from its principal, and each licensed freight forwarder shall comply with the laws of the United States and shall exercise due diligence to assure that all information provided to its principal or provided in any export declaration, bill of lading, affidavit, or other document which the licensed freight forwarder executes in connection with a shipment is accurate.
(d) Invoices; documents available upon request. Upon the request of its principal(s), each licensed freight forwarder shall provide a complete breakout of its charges and a true copy of any underlying document or bill of charges pertaining to the licensed freight forwarder’s invoice. The following notice shall appear on each invoice to a principal:
Upon request, we shall provide a detailed breakout of the components of all charges assessed and a true copy of each pertinent document relating to these charges.
§ 515.33 Records required to be kept.
Each licensed or registered NVOCC and each licensed ocean freight forwarder shall maintain in an orderly and systematic manner, and keep current and correct, all records and books of account in connection with its OTI business. The licensed or registered NVOCC and each licensed freight forwarder may maintain these records in either paper or electronic form, which shall be readily available in usable form to the Commission; the electronically maintained records shall be no less accessible than if they were maintained in paper form. These recordkeeping requirements are independent of the retention requirements of other federal agencies. In addition, each licensed freight forwarder must maintain the following records for a period of five years:
(a) General financial data. A current running account of all receipts and disbursements, accounts receivable and payable, and daily cash balances, supported by appropriate books of account, bank deposit slips, canceled checks, and monthly reconciliation of bank statements.
(b) Types of services by shipment. A separate file shall be maintained for each shipment. Each file shall include a copy of each document prepared, processed, or obtained by the licensee, including each invoice for any service arranged by the licensee and performed by others, with respect to such shipment.
(c) Receipts and disbursements by shipment. A record of all sums received and/or disbursed by the licensee for services rendered and out-of-pocket expenses advanced in connection with each shipment, including specific dates and amounts.
(d) Special contracts. A true copy, or if oral, a true and complete memorandum, of every special arrangement or contract between a licensed freight forwarder and a principal, or modification or cancellation thereof.
Subpart E – Freight Forwarding Fees and Compensation
§ 515.41 Forwarder and principal; fees.
(a) Compensation or fee sharing. No licensed freight forwarder shall share, directly or indirectly, any compensation or freight forwarding fee with a shipper, consignee, seller, or purchaser, or an agent, affiliate, or employee thereof; nor with any person advancing the purchase price of the property or guaranteeing payment therefor; nor with any person having a beneficial interest in the shipment.
(b) Receipt for cargo. Each receipt for cargo issued by a licensed freight forwarder shall be clearly identified as “Receipt for Cargo” and be readily distinguishable from a bill of lading.
(c) Reduced forwarding fees. No licensed freight forwarder shall render, or offer to render, any freight forwarding service free of charge or at a reduced fee in consideration of receiving compensation from a common carrier or for any other reason. Exception: A licensed freight forwarder may perform freight forwarding services for recognized relief agencies or charitable organizations, which are designated as such in the tariff of the common carrier, free of charge or at reduced fees.
(d) In-plant arrangements. A licensed freight forwarder may place an employee or employees on the premises of its principal as part of the services rendered to such principal, provided:
(1) The in-plant forwarder arrangement is reduced to writing and identifies all services provided by either party (whether or not constituting a freight forwarding service); states the amount of compensation to be received by either party for such services; sets forth all details concerning the procurement, maintenance or sharing of office facilities, personnel, furnishings, equipment and supplies; describes all powers of supervision or oversight of the licensee’s employee(s) to be exercised by the principal; and details all procedures for the administration or management of in-plant arrangements between the parties; and
(2) The arrangement is not an artifice for a payment or other unlawful benefit to the principal.
§ 515.42 Forwarder and carrier compensation; fees.
(a) Disclosure of principal. The identity of the shipper must always be disclosed in the shipper identification box on the bill of lading. The licensed freight forwarder’s name may appear with the name of the shipper, but the forwarder must be identified as the shipper’s agent.
(b) Certification required for compensation. A common carrier may pay compensation to a licensed freight forwarder only pursuant to such common carrier’s tariff provisions. When a common carrier’s tariff provides for the payment of compensation, such compensation shall be paid on any shipment forwarded on behalf of others where the forwarder has provided a certification as prescribed in paragraph (c) of this section and the shipper has been disclosed on the bill of lading as provided for in paragraph (a) of this section. The common carrier shall be entitled to rely on such certification unless it knows that the certification is incorrect. The common carrier shall retain such certifications for a period of five (5) years.
(c) Form of certification. When a licensed freight forwarder is entitled to compensation, the forwarder shall provide the common carrier with a certification which indicates that the forwarder has performed the required services that entitle it to compensation. The required certification may be provided electronically by the forwarder or may be placed on one copy of the relevant bill of lading, a summary statement from the forwarder, the forwarder’s compensation invoice, or as an endorsement on the carrier’s compensation check. Electronic certification must contain confirmations by the forwarder and the carrier identifying the shipments upon which forwarding compensation may be paid. Each forwarder shall retain evidence in its shipment files that the forwarder, in fact, has performed the required services enumerated on the certification. The certification shall read as follows:
The undersigned hereby certifies that neither it nor any holding company, subsidiary, affiliate, officer, director, agent or executive of the undersigned has a beneficial interest in this shipment; that it is the holder of valid FMC License No. ____, issued by the Federal Maritime Commission and has performed the following services:
(1) Engaged, booked, secured, reserved, or contracted directly with the carrier or its agent for space aboard a vessel or confirmed the availability of that space; and
(2) Prepared and processed the ocean bill of lading, dock receipt, or other similar document with respect to the shipment.
(d) Compensation pursuant to tariff provisions. No licensed freight forwarder, or employee thereof, shall accept compensation from a common carrier which is different from that specifically provided for in the carrier’s effective tariff(s). No conference or group of common carriers shall deny in the export commerce of the United States compensation to an ocean freight forwarder or limit that compensation, as provided for by section 19(e)(4) of the Act (46 U.S.C. 40904(d)) and 46 CFR part 535.
(e) Electronic data interchange. A licensed freight forwarder may own, operate, or otherwise maintain or supervise an electronic data interchange-based computer system in its forwarding business; however, the forwarder must directly perform value-added services as described in paragraph (c) of this section in order to be entitled to carrier compensation.
(f) Compensation; services performed by underlying carrier; exemptions. No licensed freight forwarder shall charge or collect compensation in the event the underlying common carrier, or its agent, has, at the request of such forwarder, performed any of the forwarding services set forth in § 515.2(h), unless such carrier or agent is also a licensed freight forwarder, or unless no other licensed freight forwarder is willing and able to perform such services.
(g) Duplicative compensation. A common carrier shall not pay compensation for the services described in paragraph (c) of this section more than once on the same shipment.
(h) Non-vessel-operating common carriers; compensation. (1) A licensee operating as an NVOCC and a freight forwarder, or a person related thereto, may collect compensation when, and only when, the following certification is made together with the certification required under paragraph (c) of this section:
The undersigned certifies that neither it nor any related person has issued a bill of lading or otherwise undertaken common carrier responsibility as a non-vessel-operating common carrier for the ocean transportation of the shipment covered by this bill of lading.
(2) Whenever a person acts in the capacity of an NVOCC as to any shipment, such person shall not collect compensation, nor shall any underlying ocean common carrier pay compensation to such person, for such shipment.
(i) Compensation; beneficial interest. A licensed freight forwarder may not receive compensation from a common carrier with respect to any shipment in which the forwarder has a beneficial interest or with respect to any shipment in which any holding company, subsidiary, affiliate, officer, director, agent, or executive of such forwarder has a beneficial interest.
§ 515.91 OMB control number assigned pursuant to the Paperwork Reduction Act.
The Commission has received OMB approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. In accordance with that Act, agencies are required to display a currently valid control number. The valid control number for this collection of information is 3072-0018.
Appendix A to Part 515 – Ocean Transportation Intermediary (OTI) Bond Form [Form 48]
Ocean Transportation Intermediary (OTI) Bond (Section 19, Shipping Act of 1984 (46 U.S.C. 40901-40904)) ____ [indicate whether NVOCC or Freight Forwarder], as Principal (hereinafter “Principal”), and ____, as Surety (hereinafter “Surety”) are held and firmly bound unto the United States of America in the sum of $____ for the payment of which sum we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally.
Whereas, Principal operates as an OTI in the waterborne foreign commerce of the United States in accordance with the Shipping Act of 1984, 46 U.S.C. 40101-41309, and, if necessary, has a valid tariff published pursuant to 46 CFR part 515 and 520, and pursuant to section 19 of the Shipping Act (46 U.S.C. 40901-40904), files this bond with the Commission;
Whereas, this bond is written to ensure compliance by the Principal with section 19 of the Shipping Act (46 U.S.C. 40901-40904), and the rules and regulations of the Federal Maritime Commission relating to evidence of financial responsibility for OTIs (46 CFR part 515), this bond shall be available to pay any judgment obtained or any settlement made pursuant to a claim under 46 CFR 515.23 for damages against the Principal arising from the Principal’s transportation-related activities under the Shipping Act, or order for reparations issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against the Principal pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109).
Now, Therefore, The condition of this obligation is that the penalty amount of this bond shall be available to pay any judgment or any settlement made pursuant to a claim under 46 CFR 515.23 for damages against the Principal arising from the Principal’s transportation-related activities or order for reparations issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against the Principal pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109).
This bond shall inure to the benefit of any and all persons who have obtained a judgment or a settlement made pursuant to a claim under 46 CFR § 515.23 for damages against the Principal arising from its transportation-related activities or order of reparation issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), and to the benefit of the Federal Maritime Commission for any penalty assessed against the Principal pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109). However, the bond shall not apply to shipments of used household goods and personal effects for the account of the Department of Defense or the account of federal civilian executive agencies shipping under the International Household Goods Program administered by the General Services Administration.
The liability of the Surety shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall aggregate the penalty amount of this bond, and in no event shall the Surety’s total obligation hereunder exceed said penalty amount, regardless of the number of claims or claimants.
This bond is effective the ____ day of ____, ____ and shall continue in effect until discharged or terminated as herein provided. The Principal or the Surety may at any time terminate this bond by mail or email ([email protected]) written notice to the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573. Such termination shall become effective thirty (30) days after receipt of said notice by the Commission. The Surety shall not be liable for any transportation-related activities of the Principal after the expiration of the 30-day period but such termination shall not affect the liability of the Principal and Surety for any event occurring prior to the date when said termination becomes effective.
The Surety consents to be sued directly in respect of any bona fide claim owed by Principal for damages, reparations or penalties arising from the transportation-related activities under the Shipping Act of Principal in the event that such legal liability has not been discharged by the Principal or Surety after a claimant has obtained a final judgment (after appeal, if any) against the Principal from a United States Federal or State Court of competent jurisdiction and has complied with the procedures for collecting on such a judgment pursuant to 46 CFR 515.23, the Federal Maritime Commission, or where all parties and claimants otherwise mutually consent, from a foreign court, or where such claimant has become entitled to payment of a specified sum by virtue of a compromise settlement agreement made with the Principal and/or Surety pursuant to 46 CFR 515.23, whereby, upon payment of the agreed sum, the Surety is to be fully, irrevocably and unconditionally discharged from all further liability to such claimant; provided, however, that Surety’s total obligation hereunder shall not exceed the amount set forth in 46 CFR 515.21, as applicable.
The underwriting Surety will promptly notify the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573, in writing by mail or email ([email protected]), of all claims made, lawsuits filed, judgments rendered, and payments made against this bond.
Appendix B to Part 515 – Ocean Transportation Intermediary (OTI) Insurance Form [Form 67]
This is to certify, that the (Name of Insurance Company), (hereinafter “Insurer”) of (Home Office Address of Company) has issued to (OTI or Group or Association of OTIs [indicate whether NVOCC(s) or Freight Forwarder(s)]) (hereinafter “Insured”) of (Address of OTI or Group or Association of OTIs) a policy or policies of insurance for purposes of complying with the provisions of Section 19 of the Shipping Act of 1984 (46 U.S.C. 40901-40904) and the rules and regulations, as amended, of the Federal Maritime Commission, which provide compensation for damages, reparations or penalties arising from the transportation-related activities of Insured, and made pursuant to the Shipping Act of 1984 (46 U.S.C. 40101-41309) (Shipping Act).
Whereas, the Insured is or may become an OTI subject to the Shipping Act and the rules and regulations of the Federal Maritime Commission, or is or may become a group or association of OTIs, and desires to establish financial responsibility in accordance with section 19 of the Shipping Act (46 U.S.C. 40901-40904), files with the Commission this Insurance Form as evidence of its financial responsibility and evidence of a financial rating for the Insurer of Class V or higher under the Financial Size Categories of A.M. Best & Company or equivalent from an acceptable international rating organization on such organization’s letterhead or designated form, or, in the case of insurance provided by Underwriters at Lloyd’s, documentation verifying membership in Lloyd’s, or, in the case of surplus lines insurers, documentation verifying inclusion on a current “white list” issued by the Non-Admitted Insurers’ Information Office of the National Association of Insurance Commissioners.
Whereas, the Insurance is written to assure compliance by the Insured with section 19 of the Shipping Act (46 U.S.C. 40901-40904), and the rules and regulations of the Federal Maritime Commission relating to evidence of financial responsibility for OTIs, this Insurance shall be available to pay any judgment obtained or any settlement made pursuant to a claim under 46 CFR 515.23 for damages against the Insured arising from the Insured’s transportation-related activities under the Shipping Act, or order for reparations issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against the Insured pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109).
Whereas, the Insurer certifies that it has sufficient and acceptable assets located in the United States to cover all liabilities of Insured herein described, this Insurance shall inure to the benefit of any and all persons who have a bona fide claim against the Insured pursuant to 46 CFR 515.23 arising from its transportation-related activities under the Shipping Act, or order of reparation issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), and to the benefit of the Federal Maritime Commission for any penalty assessed against the Insured pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109).
The Insurer consents to be sued directly in respect of any bona fide claim owed by Insured for damages, reparations or penalties arising from the transportation-related activities under the Shipping Act, of Insured in the event that such legal liability has not been discharged by the Insured or Insurer after a claimant has obtained a final judgment (after appeal, if any) against the Insured from a United States Federal or State Court of competent jurisdiction and has complied with the procedures for collecting on such a judgment pursuant to 46 CFR 515.23, the Federal Maritime Commission, or where all parties and claimants otherwise mutually consent, from a foreign court, or where such claimant has become entitled to payment of a specified sum by virtue of a compromise settlement agreement made with the Insured and/or Insurer pursuant to 46 CFR 515.23, whereby, upon payment of the agreed sum, the Insurer is to be fully, irrevocably and unconditionally discharged from all further liability to such claimant; provided, however, that Insurer’s total obligation hereunder shall not exceed the amount per OTI set forth in 46 CFR 515.21 or the amount per group or association of OTIs set forth in 46 CFR 515.21.
The liability of the Insurer shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall aggregate the penalty of the Insurance in the amount per member OTI set forth in 46 CFR 515.21, or the amount per group or association of OTIs set forth in 46 CFR 515.21, regardless of the financial responsibility or lack thereof, or the solvency or bankruptcy, of Insured. The insurance evidenced by this undertaking shall be applicable only in relation to incidents occurring on or after the effective date and before the date termination of this undertaking becomes effective. The effective date of this undertaking shall be ____ day of ____, ____, and shall continue in effect until discharged or terminated as herein provided. The Insured or the Insurer may at any time terminate the Insurance by mail or email ([email protected]) written notice to the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573. Such termination shall become effective thirty (30) days after receipt of said notice by the Commission. The Insurer shall not be liable for any transportation-related activities under the Shipping Act of the Insured after the expiration of the 30-day period but such termination shall not affect the liability of the Insured and Insurer for such activities occurring prior to the date when said termination becomes effective.
(Name of Agent) ____ domiciled in the United States, with offices located in the United States, at ____ is hereby designated as the Insurer’s agent for service of process for the purposes of enforcing the Insurance certified to herein.
If more than one insurer joins in executing this document, that action constitutes joint and several liability on the part of the insurers.
The Insurer will promptly notify the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573, in writing by mail or email ([email protected]), of all claims made, lawsuits filed, judgments rendered, and payments made against the Insurance.
Signed and sealed this ____ day of ____, ____.
This Insurance Form has been filed with the Federal Maritime Commission.
Appendix C to Part 515 – Ocean Transportation Intermediary (OTI) Guaranty Form [Form 68]
Guaranty in Respect of Ocean Transportation Intermediary (OTI) Liability for Damages, Reparations or Penalties Arising from Transportation-Related Activities Under the Shipping Act of 1984 (46 U.S.C. 40101-41309) (Shipping Act).
1. Whereas ____ (Name of Applicant [indicate whether NVOCC or Freight Forwarder]) (hereinafter “Applicant”) is or may become an Ocean Transportation Intermediary (“OTI”) subject to the Shipping Act of 1984 (46 U.S.C. 40101-41309) and the rules and regulations of the Federal Maritime Commission (FMC), or is or may become a group or association of OTIs, and desires to establish its financial responsibility in accordance with section 19 of the Shipping Act (46 U.S.C. 41107-41109), then, provided that the FMC shall have accepted, as sufficient for that purpose, the Applicant’s application, supported by evidence of a financial rating for the Guarantor of Class V or higher under the Financial Size Categories of A.M. Best & Company or equivalent from an acceptable international rating organization on such rating organization’s letterhead or designated form, or, in the case of Guaranty provided by Underwriters at Lloyd’s, documentation verifying membership in Lloyd’s, or, in the case of surplus lines insurers, documentation verifying inclusion on a current “white list” issued by the Non-Admitted Insurers’ Information Office of the National Association of Insurance Commissioners, the undersigned Guarantor certifies that it has sufficient and acceptable assets located in the United States to cover all damages arising from the transportation-related activities of the covered OTI as specified under the Shipping Act.
2. Whereas, this Guaranty is written to ensure compliance by the Applicant with section 19 of the Shipping Act (46 U.S.C. 40901-40904), and the rules and regulations of the Federal Maritime Commission relating to evidence of financial responsibility for OTIs (46 CFR part 515), this guaranty shall be available to pay any judgment obtained or any settlement made pursuant to a claim under 46 CFR 515.23 for damages against the Applicant arising from the Applicant’s transportation-related activities under the Shipping Act, or order for reparations issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against the Applicant pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109).
3. Now, Therefore, The condition of this obligation is that the penalty amount of this Guaranty shall be available to pay any judgment obtained or any settlement made pursuant to a claim under 46 CFR 515.23 for damages against the Applicant arising from the Applicant’s transportation-related activities or order for reparations issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against the Principal pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109).
4. The undersigned Guarantor hereby consents to be sued directly in respect of any bona fide claim owed by Applicant for damages, reparations or penalties arising from Applicant’s transportation-related activities under the Shipping Act, in the event that such legal liability has not been discharged by the Applicant after any such claimant has obtained a final judgment (after appeal, if any) against the Applicant from a United States Federal or State Court of competent jurisdiction and has complied with the procedures for collecting on such a judgment pursuant to 46 CFR 515.23, the FMC, or where all parties and claimants otherwise mutually consent, from a foreign court, or where such claimant has become entitled to payment of a specified sum by virtue of a compromise settlement agreement made with the Applicant and/or Guarantor pursuant to 46 CFR 515.23, whereby, upon payment of the agreed sum, the Guarantor is to be fully, irrevocably and unconditionally discharged from all further liability to such claimant. In the case of a guaranty covering the liability of a group or association of OTIs, Guarantor’s obligation extends only to such damages, reparations or penalties described herein as are not covered by another insurance policy, guaranty or surety bond held by the OTI(s) against which a claim or final judgment has been brought.
5. The Guarantor’s liability under this Guaranty in respect to any claimant shall not exceed the amount of the guaranty; and the aggregate amount of the Guarantor’s liability under this Guaranty shall not exceed the amount per OTI set forth in 46 CFR 515.21, or the amount per group or association of OTIs set forth in 46 CFR 515.21 in aggregate.
6. The Guarantor’s liability under this Guaranty shall attach only in respect of such activities giving rise to a cause of action against the Applicant, in respect of any of its transportation-related activities under the Shipping Act, occurring after the Guaranty has become effective, and before the expiration date of this Guaranty, which shall be the date thirty (30) days after the date of receipt of mail or email ([email protected]) written notice to the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573, that either Applicant or the Guarantor has elected to terminate this Guaranty. The Guarantor and/or Applicant specifically agree to file such written notice of cancellation.
7. Guarantor shall not be liable for payments of any of the damages, reparations or penalties hereinbefore described which arise as the result of any transportation-related activities of Applicant after the cancellation of the Guaranty, as herein provided, but such cancellation shall not affect the liability of the Guarantor for the payment of any such damages, reparations or penalties prior to the date such cancellation becomes effective.
8. Guarantor shall pay, subject to the limit of the amount per OTI set forth in 46 CFR 515.21, directly to a claimant any sum or sums which Guarantor, in good faith, determines that the Applicant has failed to pay and would be held legally liable by reason of Applicant’s transportation-related activities, or its legal responsibilities under the Shipping Act and the rules and regulations of the FMC, made by Applicant while this agreement is in effect, regardless of the financial responsibility or lack thereof, or the solvency or bankruptcy, of Applicant.
9. The Applicant or Guarantor will promptly notify the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573, in writing by mail or email ([email protected]), of all claims made, lawsuits filed, judgments rendered, and payments made under the Guaranty.
10. Applicant and Guarantor agree to handle the processing and adjudication of claims by claimants under the Guaranty established herein in the United States, unless by mutual consent of all parties and claimants another country is agreed upon. Guarantor agrees to appoint an agent for service of process in the United States.
11. This Guaranty shall be governed by the laws in the State of ____ to the extent not inconsistent with the rules and regulations of the FMC.
12. This Guaranty is effective the day of ____, ____, ____ 12:01 a.m., standard time at the address of the Guarantor as stated herein and shall continue in force until terminated as herein provided.
13. The Guarantor hereby designates as the Guarantor’s legal agent for service of process domiciled in the United States ____, with offices located in the United States at ____, for the purposes of enforcing the Guaranty described herein.
Appendix D to Part 515 – Ocean Transportation Intermediary (OTI) Group Bond Form [FMC-69]
Ocean Transportation Intermediary (OTI) Group Supplemental Coverage Bond Form (Shipping Act of 1984 (46 U.S.C. 40101-41309)) (Shipping Act).
____ [indicate whether NVOCC or Freight Forwarder], as Principal (hereinafter “Principal”), and ____ as Surety (hereinafter “Surety”) are held and firmly bound unto the United States of America in the sum of $____ for the payment of which sum we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally.
Whereas, (Principal) ____ operates as a group or association of OTIs in the waterborne foreign commerce of the United States and pursuant to section 19 of the Shipping Act of 1984 (46 U.S.C. 40901-40904), files this bond with the Federal Maritime Commission;
Whereas, this group bond is written to ensure compliance by the OTIs, enumerated in Appendix A of this bond, with section 19 of the Shipping Act (46 U.S.C. 40901-40904), and the rules and regulations of the Federal Maritime Commission relating to evidence of financial responsibility for OTIs (46 CFR part 515), this group bond shall be available to pay any judgment obtained or any settlement made pursuant to a claim under 46 CFR 515.23 for damages against such OTIs arising from OTI transportation-related activities under the Shipping Act, or order for reparations issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against one or more OTI members pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109); provided, however, that the Surety’s obligation for a group or association of OTIs shall extend only to such damages, reparations or penalties described herein as are not covered by another surety bond, insurance policy or guaranty held by the OTI(s) against which a claim or final judgment has been brought and that Surety’s total obligation hereunder shall not exceed the amount per OTI provided for in 46 CFR 515.21 or the amount per group or association of OTIs provided for in 46 CFR 515.21 in aggregate.
Now, therefore, the conditions of this obligation are that the penalty amount of this bond shall be available to pay any judgment obtained or any settlement made pursuant to a claim under 46 CFR 515.23 against the OTIs enumerated in Appendix A of this bond for damages arising from any or all of the identified OTIs’ transportation-related activities under the Shipping Act (46 U.S.C. 40101-41309), or order for reparations issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109), that are not covered by the identified OTIs’ individual insurance policy(ies), guaranty(ies) or surety bond(s).
This group bond shall inure to the benefit of any and all persons who have obtained a judgment or made a settlement pursuant to a claim under 46 CFR 515.23 for damages against any or all of the OTIs identified in Appendix A not covered by said OTIs’ insurance policy(ies), guaranty(ies) or surety bond(s) arising from said OTIs’ transportation-related activities under the Shipping Act, or order for reparation issued pursuant to section 11 of the Shipping Act, and to the benefit of the Federal Maritime Commission for any penalty assessed against said OTIs pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109). However, the bond shall not apply to shipments of used household goods and personal effects for the account of the Department of Defense or the account of federal civilian executive agencies shipping under the International Household Goods Program administered by the General Services Administration.
The Surety consents to be sued directly in respect of any bona fide claim owed by any or all of the OTIs identified in Appendix A for damages, reparations or penalties arising from the transportation-related activities under the Shipping Act of the OTIs in the event that such legal liability has not been discharged by the OTIs or Surety after a claimant has obtained a final judgment (after appeal, if any) against the OTIs from a United States Federal or State Court of competent jurisdiction and has complied with the procedures for collecting on such a judgment pursuant to 46 CFR 515.23, the Federal Maritime Commission, or where all parties and claimants otherwise mutually consent, from a foreign court, or where such claimant has become entitled to payment of a specified sum by virtue of a compromise settlement agreement made with the OTI(s) and/or Surety pursuant to 46 CFR 515.23, whereby, upon payment of the agreed sum, the Surety is to be fully, irrevocably and unconditionally discharged from all further liability to such claimant(s).
The liability of the Surety shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall aggregate the penalty of this bond, and in no event shall the Surety’s total obligation hereunder exceed the amount per member OTI set forth in 46 CFR 515.21, identified in Appendix A, or the amount per group or association of OTIs set forth in 46 CFR 515.21, regardless of the number of OTIs, claims or claimants.
This bond is effective the ____, day of ____,____ and shall continue in effect until discharged or terminated as herein provided. The Principal or the Surety may at any time terminate this bond by mail or email ([email protected]) written notice to the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573. Such termination shall become effective thirty (30) days after receipt of said notice by the Commission. The Surety shall not be liable for any transportation-related activities of the OTIs identified in Appendix A as covered by the Principal after the expiration of the 30-day period, but such termination shall not affect the liability of the Principal and Surety for any transportation-related activities occurring prior to the date when said termination becomes effective.
The Principal or financial responsibility provider will promptly notify the underwriting Surety in writing and the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573, by mail or email ([email protected]), of any additions, deletions or changes to the OTIs enumerated in Appendix A. In the event of additions to Appendix A, coverage will be effective upon receipt of such notice, in writing, by the Commission at its office in Washington, DC. In the event of deletions to Appendix A, termination of coverage for such OTI(s) shall become effective 30 days after receipt of written notice by the Commission. Neither the Principal nor the Surety shall be liable for any transportation-related activities of the OTI(s) deleted from Appendix A that occur after the expiration of the 30-day period, but such termination shall not affect the liability of the Principal and Surety for any transportation-related activities of said OTI(s) occurring prior to the date when said termination becomes effective.
The underwriting Surety will promptly notify the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573, in writing by mail or email ([email protected]), of all claims made, lawsuits filed, judgments rendered, and payments made against this group bond.
Signed and sealed this ____ day of ____,
Appendix E to Part 515 – Optional Rider for Additional NVOCC Financial Responsibility (Optional Rider to Form FMC-48) [FORM 48A]
The undersigned ____, as Principal and ____, as Surety do hereby agree that the existing Bond No. ____ to the United States of America and filed with the Federal Maritime Commission pursuant to section 19 of the Shipping Act of 1984 is modified as follows:
1. The following condition is added to this Bond:
a. An additional condition of this Bond is that $____ (payable in U.S. Dollars or Renminbi Yuan at the option of the Surety) shall be available to pay any fines and penalties for activities in the U.S.-China trades imposed by the Ministry of Communications of the People’s Republic of China (“MOC”) or its authorized competent communications department of the people’s government of the province, autonomous region or municipality directly under the Central Government or the State Administration of Industry and Commerce pursuant to the Regulations of the People’s Republic of China on International Maritime Transportation and the Implementing Rules of the Regulations of the PRC on International Maritime Transportation promulgated by MOC Decree No. 1, January 20, 2003.
b. The liability of the Surety shall not be discharged by any payment or succession of payments pursuant to section 1 of this Rider, unless and until the payment or payments shall aggregate the amount set forth in section 1a of this Rider. In no event shall the Surety’s obligation under this Rider exceed the amount set forth in section 1a regardless of the number of claims.
c. The total amount of coverage available under this Bond and all of its riders, available pursuant to the terms of section 1(a.) of this rider, equals $____. The total amount of aggregate coverage equals or exceeds $125,000.
d. This Rider is effective the ____ day of ____, 20____, and shall continue in effect until discharged, terminated as herein provided, or upon termination of the Bond in accordance with the sixth paragraph of the Bond. The Principal or the Surety may at any time terminate this Rider by mail or email ([email protected]) written notice to the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573, accompanied by proof of transmission of notice to MOC. Such termination shall become effective thirty (30) days after receipt of said notice and proof of transmission by the Federal Maritime Commission. The Surety shall not be liable for fines or penalties imposed on the Principal after the expiration of the 30-day period but such termination shall not affect the liability of the Principal and Surety for any fine or penalty imposed prior to the date when said termination becomes effective.
2. This Bond remains in full force and effect according to its terms except as modified above.
In witness whereof we have hereunto set our hands and seals on this day ____ of ____________, 20____,
[Principal],
By: ________________________________________________
[Surety],
By: ________________________________________________
Appendix F to Part 515 – Optional Rider for Additional NVOCC Financial Responsibility for Group Bonds [Optional Rider to Form FMC-69]
The undersigned ____, as Principal and ____, as Surety do hereby agree that the existing Bond No. ____ to the United States of America and filed with the Federal Maritime Commission pursuant to section 19 of the Shipping Act of 1984 is modified as follows:
1. The following condition is added to this Bond:
a. An additional condition of this Bond is that $ ______________(payable in U.S. Dollars or Renminbi Yuan at the option of the Surety) shall be available to any NVOCC enumerated in an Appendix to this Rider to pay any fines and penalties for activities in the U.S.-China trades imposed by the Ministry of Communications of the People’s Republic of China (“MOC”) or its authorized competent communications department of the people’s government of the province, autonomous region or municipality directly under the Central Government or the State Administration of Industry and Commerce pursuant to the Regulations of the People’s Republic of China on International Maritime Transportation and the Implementing Rules of the Regulations of the PRC on International Maritime Transportation promulgated by MOC Decree No. 1, January 20, 2003. Such amount is separate and distinct from the bond amount set forth in the first paragraph of this Bond. Payment under this Rider shall not reduce the bond amount in the first paragraph of this Bond or affect its availability. The Surety shall indicate that $50,000 is available to pay such fines and penalties for each NVOCC listed on appendix A to this Rider wishing to exercise this option.
b. The liability of the Surety shall not be discharged by any payment or succession of payments pursuant to section 1 of this Rider, unless and until the payment or payments shall aggregate the amount set forth in section 1a of this Rider. In no event shall the Surety’s obligation under this Rider exceed the amount set forth in section 1a regardless of the number of claims.
c. This Rider is effective the ____ day of ____, 20____, and shall continue in effect until discharged, terminated as herein provided, or upon termination of the Bond in accordance with the sixth paragraph of the Bond. The Principal or the Surety may at any time terminate this Rider by mail or email ([email protected]) written notice to the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573, accompanied by proof of transmission of notice to MOC. Such termination shall become effective thirty (30) days after receipt of said notice and proof of transmission by the Federal Maritime Commission. The Surety shall not be liable for fines or penalties imposed on the Principal after the expiration of the 30-day period but such termination shall not affect the liability of the Principal and Surety for any fine or penalty imposed prior to the date when said termination becomes effective.
2. This Bond remains in full force and effect according to its terms except as modified above.
In witness whereof we have hereunto set our hands and seals on this ____________day of ____, 20____.
[Principal],
By: ________________________________________________
[Surety],
By: ________________________________________________
The collection of this information is authorized generally by Section 19 of the Shipping Act of 1984 (46 U.S.C. 40901-40904). This is an optional form. Submission is completely voluntary. Failure to submit this form will in no way impact the Federal Maritime Commission’s assessment of your firm’s financial responsibility.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Copies of this form will be maintained until the corresponding license has been revoked.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is: Recordkeeping, 20 minutes; Learning about the form, 20 minutes; Preparing and sending the form to the FMC, 20 minutes.
If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can write to the Secretary, Federal Maritime Commission, 800 North Capitol Street NW., Washington, DC 20573-0001 or email: [email protected]
PART 520 – CARRIER AUTOMATED TARIFFS
§ 520.1 Scope and purpose.
(a) Scope. The regulations of this part govern the publication of tariffs in automated systems by common carriers and conferences in the waterborne foreign commerce of the United States. They cover the transportation of property by such carriers, including through transportation with inland carriers. They implement the tariff publication requirements of section 8 of the Shipping Act of 1984 (“the Act”) (46 U.S.C. 40501-40503), as modified by the Ocean Shipping Reform Act of 1998 and section 424 of Public Law 105-258.
(b) Purpose. The requirements of this part are intended to permit:
(1) Shippers and other members of the public to obtain reliable and useful information concerning the rates and charges that will be assessed by common carriers and conferences for their transportation services;
(2) Carriers and conferences to meet their publication requirements pursuant to section 8 of the Act (46 U.S.C. 40501-40503);
(3) The Commission to ensure that carrier tariff publications are accurate and accessible and to protect the public from violations by carriers of section 10 of the Act (46 U.S.C. 41101-41106); and
(4) The Commission to review and monitor the activities of controlled carriers pursuant to section 9 of the Act (46 U.S.C. 40701-40706).
§ 520.2 Definitions.
The following definitions shall apply to this part:
Act means the Shipping Act of 1984, as amended by the Ocean Shipping Reform Act of 1998.
Amendment means any change, alteration, correction or modification of an existing tariff.
Assessorial charge means the amount that is added to the basic ocean freight rate.
BTA means the Commission’s Bureau of Trade Analysis or its successor bureau.
Bulk cargo means cargo that is loaded and carried in bulk without mark or count in a loose unpackaged form, having homogeneous characteristics. Bulk cargo loaded into intermodal equipment, except LASH or Seabee barges, is subject to mark and count and is, therefore, subject to the requirements of this part.
Co-loading means the combining of cargo by two or more NVOCCs for tendering to an ocean common carrier under the name of one or more of the NVOCCs.
Combination rate means a rate for a shipment moving under intermodal transportation which is computed by the addition of a TRI, and an inland rate applicable from/to inland points not covered by the TRI.
Commission means the Federal Maritime Commission.
Commodity description means a comprehensive description of a commodity listed in a tariff, including a brief definition of the commodity.
Commodity description number means a number that may be used to identify a commodity description.
Commodity index means an index of the commodity descriptions contained in a tariff.
Commodity rate means a rate for shipping to or from specific locations a commodity or commodities specifically named or described in the tariff in which the rate or rates are published.
Common carrier means a person holding itself out to the general public to provide transportation by water of cargo between the United States and a foreign country for compensation that:
(1) Assumes responsibility for the transportation from port or point of receipt to the port or point of destination; and
(2) Utilizes, for all or part of that transportation, a vessel operating on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, or chemical parcel tanker or by a vessel when primarily engaged in the carriage of perishable agricultural commodities:
(i) If the common carrier and the owner of those commodities are wholly-owned, directly or indirectly, by a person primarily engaged in the marketing and distribution of those commodities and
(ii) Only with respect to the carriage of those commodities.
Conference means an agreement between or among two or more ocean common carriers which provides for the fixing of and adherence to uniform tariff rates, charges, practices and conditions of service relating to the receipt, carriage, handling and/or delivery of passengers or cargo for all members, but the term does not include joint service, consortium, pooling, sailing, or transshipment agreements.
Consignee means the recipient of cargo from a shipper; the person to whom a transported commodity is to be delivered.
Container means a demountable and reusable freight-carrying unit designed to be transported by different modes of transportation and having construction, fittings, and fastenings able to withstand, without permanent distortion or additional exterior packaging or containment, the normal stresses that apply on continuous all-water and intermodal transportation. The term includes dry cargo, ventilated, insulated, refrigerated, flat rack, vehicle rack, liquid tank, and open-top containers without chassis, but does not include crates, boxes or pallets.
Controlled carrier means an ocean common carrier that is, or whose operating assets are, directly or indirectly owned or controlled by a government; ownership or control by a government shall be deemed to exist with respect to any common carrier if:
(1) A majority portion of the interest in the common carrier is owned or controlled in any manner by that government, by an agency thereof, or by any public or private person controlled in any manner by that government, by any agency thereof, or by any public or private person controlled by that government; or
(2) That government has the right to appoint or disapprove the appointment of a majority of the directors, the chief operating officer or the chief executive officer of the common carrier.
Effective date means the date upon which a published tariff or tariff element is scheduled to go into effect. Where there are multiple publications to a tariff element on the same day, the last element published with the same effective date is the one effective for that day.
Expiration date means the last day after which the entire tariff or tariff element is no longer in effect.
Foreign commerce means that commerce under the jurisdiction of the Act.
Forest products means forest products including, but not limited to, lumber in bundles, rough timber, ties, poles, piling, laminated beams, bundled siding, bundled plywood, bundled core stock or veneers, bundled particle or fiber boards, bundled hardwood, wood pulp in rolls, wood pulp in unitized bales, paper and paper board in rolls or in pallet or skid-sized sheets, liquid or granular by-products derived from pulping and papermaking, and engineered wood products.
Harmonized Code means the coding provisions of the Harmonized System.
Harmonized System means the Harmonized Tariff Schedule of the United States (“U.S. HTS”), based on the international Harmonized System, administered by the U.S. Customs Service for the U.S. International Trade Commission, and Schedule B, administered by the U.S. Census Bureau.
Inland point means any city and associated state/province, country, U.S. ZIP code, or U.S. ZIP code range, which lies beyond port terminal areas. (A city may share the name of a port: the immediate ship-side and terminal area is the port, but the rest of the city is considered an inland point.)
Inland rate means a rate specified from/to an ocean port to/from an inland point, for specified modes of overland transportation.
Inland rate table means a structured matrix of geographic inland locations (points, postal codes/postal code ranges, etc.) on one axis and transportation modes (truck, rail, etc.) on the other axis, with the inland rates specified at the matrix row and column intersections.
Intermodal transportation means continuous through transportation involving more than one mode of service (e.g., ship, rail, motor, air), for pickup and/or delivery at a point beyond the area of the port at which the vessel calls. The term “intermodal transportation” can apply to “through transportation (at through rates)” or transportation on through routes using combination rates.
Joint rates means rates or charges established by two or more common carriers for ocean transportation over the combined routes of such common carriers.
Local rates means rates or charges for transportation over the route of a single common carrier (or any one common carrier participating in a conference tariff), the application of which is not contingent upon a prior or subsequent movement.
Location group means a logical collection of geographic points, ports, states/provinces, countries, or combinations thereof, which is primarily used to identify, by location group name, a group that may represent tariff origin and/or destination scope and TRI origin and/or destination.
Loyalty contract means a contract with an ocean common carrier or agreement by which a shipper obtains lower rates by committing all or a fixed portion of its cargo to that carrier or agreement and the contract provides for a deferred rebate arrangement.
Motor vehicle means a wheeled vehicle whose primary purpose is ordinarily the non-commercial transportation of passengers, including an automobile, pickup truck, minivan, or sport utility vehicle.
Ocean common carrier means a common carrier that operates, for all or part of its common carrier service, a vessel on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, or chemical parcel-tanker.
Ocean transportation intermediary means an ocean freight forwarder or a non-vessel-operating common carrier. For purposes of this part,
(1) Ocean freight forwarder means a person that –
(i) In the United States, dispatches shipments from the United States via a common carrier and books or otherwise arranges space for those shipments on behalf of shippers; and
(ii) Processes the documentation or performs related activities incident to those shipments; and
(2) Non-vessel-operating common carrier (“NVOCC”) means a common carrier that does not operate the vessels by which the ocean transportation is provided, and is a shipper in its relationship with an ocean common carrier.
Open rate means a rate on a specified commodity or commodities over which a conference relinquishes or suspends its ratemaking authority in whole or in part, thereby permitting each individual ocean common carrier member of the conference to fix its own rate on such commodity or commodities.
Organization name means an entity’s name on file with the Commission and for which the Commission assigns an organization number.
Organization record means information regarding an entity, including its name, address, and organization type.
Origin scope means a location group defining the geographic range of cargo origins covered by a tariff.
Person includes individuals, firms, partnerships, associations, companies, corporations, joint stock associations, trustees, receivers, agents, assignees and personal representatives.
Point of rest means that area on the terminal facility which is assigned for the receipt of inbound cargo from the ship and from which inbound cargo may be delivered to the consignee, and that area which is assigned for the receipt of outbound cargo from shippers for vessel loading.
Port means a place at which a common carrier originates or terminates (by transshipment or otherwise) its actual ocean carriage of cargo or passengers as to any particular transportation movement.
Project rates means rates applicable to the transportation of materials and equipment to be employed in the construction or development of a named facility used for a major governmental, charitable, manufacturing, resource exploitation and public utility or public service purpose, including disaster relief projects.
Proportional rates means rates or charges assessed by a common carrier for transportation services, the application of which is conditioned upon a prior or subsequent movement.
Publication date means the date a tariff or tariff element is published in a carrier’s or conference’s tariff.
Publisher means an organization authorized to publish or amend tariff information.
Rate means a price stated in a tariff for providing a specified level of transportation service for a stated cargo quantity, from origin to destination, on and after a stated effective date or within a defined time frame.
Retrieval means the process by which a person accesses a tariff via dial-up telecommunications or a network link and interacts with the carrier’s or publisher’s system on a transaction-by-transaction basis to retrieve published tariff matter.
Rules means the stated terms and conditions set by the tariff owner which govern the application of tariff rates, charges and other matters.
Scope means the location group(s) (geographic groupings(s)) listing the ports or ranges of ports to and from which the tariff’s rates apply.
Shipment means all of the cargo carried under the terms of a single bill of lading.
Shipper means:
(1) A cargo owner;
(2) The person for whose account the ocean transportation is provided;
(3) The person to whom delivery is to be made;
(4) A shipper’s association; or
(5) An NVOCC that accepts responsibility for payment of all charges applicable under the tariff or service contract.
Shippers’ association means a group of shippers that consolidates or distributes freight on a nonprofit basis for the members of the group in order to secure carload, truckload, or other volume rates or service contracts.
Special permission means permission, authorized by the Commission, for certain tariff publications that do not conform with applicable regulations, usually involving effectiveness on less than statutory notice.
Tariff means a publication containing the actual rates, charges, classifications, rules, regulations and practices of a common carrier or a conference of common carriers. The term “practices” refers to those usages, customs or modes of operation which in any way affect, determine or change the transportation rates, charges or services provided by a common carrier or conference and, in the case of conferences, must be restricted to activities authorized by the basic conference agreement.
Tariff number means a unique 3-digit number assigned by the publisher to distinguish it from other tariffs. Tariffs may be identified by the 6-digit organization number plus the user-assigned tariff number (e.g., 999999-001) or a Standard Carrier Alpha Code (“SCAC”) plus the user-assigned tariff number.
Tariff rate item (“TRI”) means a single freight rate, in effect on and after a specific date or for a specific time period, for the transportation of a stated cargo quantity, which may move from origin to destination under a single specified set of transportation conditions, such as container size or temperature.
TRI number means a number that consists of the numeric commodity code, if any, and a unique numeric suffix used to differentiate TRIs within the same commodity description. TRI numbers are not required in systems that do not use numeric commodity coding.
Through rate means the single amount charged by a common carrier in connection with through transportation.
Through transportation means continuous transportation between points of origin and destination, either or both of which lie beyond port terminal areas, for which a through rate is assessed and which is offered or performed by one or more carriers, at least one of which is a common carrier, between a United States point or port and a foreign point or port.
Thru date means the date after which an amendment to a tariff element is designated by the publisher to be unavailable for use and the previously effective tariff element automatically goes back into effect.
Time/volume rate means a rate published in a tariff which is conditioned upon receipt of a specified aggregate volume of cargo or aggregate freight revenue over a specified period of time.
Trade name means a name used for conducting business, but which is not necessarily its legal name. This is also known as a “d/b/a” (doing business as) name.
Transshipment means the physical transfer of cargo from a vessel of one carrier to a vessel of another in the course of all-water or through transportation, where at least one of the exchanging carriers is an ocean common carrier subject to the Commission’s jurisdiction.
§ 520.3 Publication responsibilities.
(a) General. Unless otherwise exempted by § 520.13, all common carriers and conferences shall keep open for public inspection, in automated tariff systems, tariffs showing all rates, charges, classifications, rules, and practices between all points or ports on their own routes and on any through transportation route that has been established.
(b) Conferences. Conferences shall publish, in their automated tariff systems, rates offered pursuant to independent action by their members and may publish any open rates offered by their members. Alternatively, open rates may be published in individual tariffs of conference members.
(c) Agents. Common carriers or conferences may use agents to meet their publication requirements under this part.
(d) Notification. Each common carrier and conference shall notify BTA, prior to the commencement of common carrier service pursuant to a published tariff, of its organization name, organization number, home office address, name and telephone number of firm’s representative, the location of its tariffs, and the publisher, if any, used to maintain its tariffs, by electronically submitting Form FMC-1 via the Commission’s website at www.fmc.gov. Any changes to the above information shall be immediately transmitted to BTA. The Commission will provide a unique organization number to new entities operating as common carriers or conferences in the U.S. foreign commerce.
(e) Location of tariffs. The Commission will publish on its website, www.fmc.gov, a list of the locations of all carrier and conference tariffs. The Commission will update this list on a periodic basis.
§ 520.4 Tariff contents.
(a) General. Tariffs published pursuant to this part shall:
(1) State the places between which cargo will be carried;
(2) List each classification of cargo in use;
(3) State the level of ocean transportation intermediary, as defined by section 3(17)(A) of the Act (46 U.S.C. 40102(18)), compensation, if any, to be paid by a carrier or conference;
(4) State separately each terminal or other charge, privilege, or facility under the control of the carrier or conference and any rules or regulations that in any way change, affect, or determine any part of the aggregate of the rates or charges;
(5) Include sample copies of any bill of lading, contract of affreightment or other document evidencing the transportation agreement;
(6) Include copies of any loyalty contract, omitting the shipper’s name;
(7) Contain an organization record, tariff record, and tariff rules; and
(8) For commodity tariffs, also contain commodity descriptions and tariff rate items.
(b) Organization record. Common carriers’ and conferences’ organization records shall include:
(1) Organization name;
(2) Organization number assigned by the Commission;
(3) Agreement number, where applicable;
(4) Organization type (e.g., ocean common carrier (VOCC), conference (CONF), non-vessel-operating common carrier (NVOCC) or agent);
(5) Home office address and telephone number of firm’s representative;
(6) Names and organization numbers of all affiliates to conferences or agreements, including trade names; and
(7) The publisher, if any, used to maintain the organization’s tariffs.
(c) Tariff record. The tariff record for each tariff shall include:
(1) Organization number and name, including any trade name;
(2) Tariff number;
(3) Tariff title;
(4) Tariff type (e.g., commodity, rules, equipment interchange, or bill of lading);
(5) Contact person and address;
(6) Default measurement and currency units;
(7) Origination and destination scope; and
(8) A statement certifying that all information contained in the tariff is true and accurate and no unlawful alterations will be permitted.
(d) Tariff rules. Carriers and conferences shall publish in their tariffs any rule that affects the application of the tariff.
(e) Commodity descriptions. (1) For each separate commodity in a tariff, a distinct numeric code may be used. Tariff publishers are not required to use any numeric code to identify commodities, but should they choose to do so, they are encouraged to use the U.S. Harmonized Tariff Schedule (“U.S. HTS”) for both the commodity coding and associated terminology (definitions).
(2) If a tariff publisher uses a numeric code to identify commodities, the following commodity types shall be preceded by their associated 2-digit prefixes, with the remaining digits at the publisher’s option:
(i) Mixed commodities – “99”;
(ii) Projects – “98”; and
(iii) non-commodities, e.g., “cargo, n.o.s.,” “general cargo,” or “freight-all kinds” – “00”.
(3) Commodity index. (i) Each commodity description created under this section shall have at least one similar index entry which will logically represent the commodity within the alphabetical index. Publishers are encouraged, however, to create multiple entries in the index for articles with equally valid common use names, such as, “Sodium Chloride,” “Salt, common,” etc.
(ii) If a commodity description includes two or more commodities, each included commodity shall be shown in the index.
(iii) Items, such as “mixed commodities,” “projects” or “project rates,” “n.o.s.” descriptions, and “FAK,” shall be included in the commodity index.
(f) Tariff rate items. A tariff rate item (“TRI”) is the single freight rate in effect for the transportation of cargo under a specified set of transportation conditions. TRIs must contain the following:
(1) Brief commodity description;
(2) TRI number (optional);
(3) Publication date;
(4) Effective date;
(5) Origin and destination locations or location groups;
(6) Rate and rate basis; and
(7) Service code.
(g) Location groups. In the primary tariff, or in a governing tariff, a publisher may define and create groups of cities, states, provinces and countries (e.g., location groups) or groups of ports (e.g., port groups), which may be used in the construction of TRIs and other tariff objects, in lieu of specifying particular place names in each tariff item, or creating multiple tariff items which are identical in all ways except for place names.
(h) Inland rate tables. If a carrier or conference desires to provide intermodal transportation to or from named points/postal regions at combination rates, it shall clearly and accurately set forth the applicable charges in an “Inland Rate Tables” section. An inland rate table may be constructed to provide an inland distance which is applied to a per mile rate to calculate the inland rate.
(i) Shipper requests. Conference tariffs shall contain clear and complete instructions, in accordance with the agreement’s provisions, stating where and by what method shippers may file requests and complaints and how they may engage in consultation pursuant to section 5(b)(6) of the Act (46 U.S.C. 40303(b)(6)), together with a sample rate request form or a description of the information necessary for processing the request or complaint.
(j) Inland divisions. Common carriers are not required to state separately or otherwise reveal in tariffs the inland division of a through rate.
§ 520.5 Standard tariff terminology.
(a) Approved codes. The Standard Terminology Appendix contains codes for rate bases, container sizes, service, etc., and units for weight, measure and distance. They are intended to provide a standard terminology baseline for tariffs to facilitate retriever efficiency. Tariff publishers may use additional codes, if they are clearly defined in their tariffs.
(b) Geographic names. Tariffs should employ locations (points) that are published in the National Imagery and Mapping Agency (“NIMA”) gazetteer or the Geographic Names Information System (“GNIS”) developed by the U.S. Geological Survey. Ports published or approved for publication in the World Port Index (Pub. No. 150) should also be used in tariffs. Tariff publishers may use geographic names that are currently in use and have not yet been included in these publications.
§ 520.6 Retrieval of information.
(a) General. Tariffs systems shall present retrievers with the ability to:
(1) Search for commonly understood tariff objects (e.g., commodities, origins, destinations, etc.) without restricting such search to a specific tariff;
(2) Search a tariff for a rate on the basis of origin, destination and commodity;
(3) Employ a tariff selection option; or
(4) Select an object group (e.g., rules, locations, groups, etc.) within a particular tariff.
(b) Search capability. Tariffs shall provide the capability to search for tariff matter by non-case sensitive text search. Text search matches for commodity descriptions should result in a commodity or commodity index list.
(c) Commodities and TRIs. Retriever selection of a specific commodity from a commodity index list shall display the commodity description and provide an option for searching for a rate (e.g., on the basis of origin/destination) or a TRI list, if multiple TRIs are in effect for the commodity.
(d) Object groups. Retriever selection of a specific object group shall result in a list of the objects within the group or present a text search mechanism to allow location of an object within the group. For example, selection of the rules object group would present a list of the rules or a text search mechanism for locating specific terms or phrases within the rules.
(e) Basic ocean freight. The minimum rate display for tariffs shall consist of the basic ocean freight rate and a list of all assessorial charges that apply for the retriever-entered shipment parameters. If other rules or charges may be applicable to a shipment under certain circumstances, the tariff shall so indicate.
(f) Displays. All displays of individual tariff matter shall include the publication date, effective date, amendment code (as contained in appendix A of this part) and object name or number. When applicable, a thru date or expiration date shall also be displayed. Use of “S” as an amendment code shall be accompanied by a Commission issued special use number.
§ 520.7 Tariff limitations.
(a) General. Tariffs published pursuant to this part shall:
(1) Be clear and definite;
(2) Use English as the primary textual language;
(3) Not contain cross-references to any other rate tariffs, except:
(i) A tariff of general applicability maintained by that same carrier or conference,
(ii) The individual tariffs of members of a non-conference agreement to enter into time/volume rates may cross-reference the tariffs of other members for purposes of said time/volume rates, and
(iii) Multiple common tariffs of a conference agreement to enter into time/volume rates may cross-reference their own multiple conference tariffs for purposes of said time/volume rates; and
(4) Not duplicate or conflict with any other tariff publication.
(b) Notice of cancellation. Carriers and conferences shall inform BTA, in writing, whenever a tariff is canceled and the effective date of that cancellation.
(c) Applicable rates. The rates, charges, and rules applicable to any given shipment shall be those in effect on the date the cargo is received by the common carrier or its agent including originating carriers in the case of rates for through transportation.
(d) Minimum quantity rates. When two or more TRIs are stated for the same commodity over the same route and under similar conditions, and the application is dependent upon the quantity of the commodity shipped, the total freight charges assessed against the shipment may not exceed the total charges computed for a larger quantity, if the TRI specifying a required minimum quantity (either weight or measurement; per container or in containers) will be applicable to the contents of the container(s), and if the minimum set forth is met or exceeded. At the shipper’s option, a quantity less than the minimum level may be freighted at the lower TRI if the weight or measurement declared for rating purposes is increased to the minimum level.
(e) Green salted hides. The shipping weight for green salted hides shall be either a scale weight or a scale weight minus a deduction, which amount and method of computation are specified in the commodity description. The shipper must furnish the carrier a weight certificate or dock receipt from an inland common carrier for each shipment at or before the time the shipment is tendered for ocean transportation.
(f) Conference situations. (1) New members of a conference shall cancel any independent tariffs applicable to the trades served by the conference, within ninety (90) days of membership in the conference. Individual conference members may publish their own separate open rate tariffs. Admission to the conference may be effective on the date notice is published in the conference tariff.
(2) New conference agreements have ninety (90) days within which to publish a new tariff.
(g) Overcharge claims. (1) No tariff may limit the filing of overcharge claims with a common carrier to a period of less than three (3) years from the accrual of the cause of action.
(2) The acceptance of any overcharge claim may not be conditioned upon the payment of a fee or charge.
(3) No tariff may require that overcharge claims based on alleged errors in weight, measurement or description of cargo be filed before the cargo has left the custody of the common carrier.
(h) Returned cargo. When a carrier or conference offers the return shipment of refused, damaged or rejected shipments, or exhibits at trade fairs, shows or expositions, to port of origin at the TRI assessed on the original movement, and such TRI is lower than the prevailing TRI:
(1) The return shipment must occur within one (1) year;
(2) The return movement must be made over the line of the same common carrier performing the original movement, except in the use of a conference tariff, where return may be made by any member line when the original shipment was carried under the conference tariff; and
(3) A copy of the original bill of lading showing the rate assessed must be presented to the return common carrier.
§ 520.8 Effective dates.
(a) General. (1) No new or initial rate, charge, or change in an existing rate, that results in an increased cost to a shipper may become effective earlier than thirty (30) calendar days after publication.
(2) An amendment which deletes a specific commodity and applicable rate from a tariff, thereby resulting in a higher “cargo n.o.s.” or similar general cargo rate, is a rate increase requiring a 30-day notice period.
(3) Rates for the transportation of cargo for the U.S. Department of Defense may be effective upon publication.
(4) Changes in rates, charges, rules, regulations or other tariff provisions resulting in a decrease in cost to a shipper may become effective upon publication.
(b) Amendments. The following amendments may take effect upon publication:
(1) Those resulting in no change in cost to a shipper;
(2) The canceling of a tariff due to cessation of all service by the carrier between the ports or points covered by the tariff;
(3) The addition of a port or point to a previously existing origin or destination grouping; or
(4) Changes in charges for terminal services, canal tolls, additional charges, or other provisions not under the control of the common carriers or conferences, which merely acts as a collection agent for such charges and the agency making such changes does so without notifying the tariff owner.
(c) Controlled carriers. Published rates by or for controlled carriers shall be governed by the procedures set forth in part 565 of this chapter.
§ 520.9 Access to tariffs.
(a) Methods to access. Carriers and conferences shall provide access to their published tariffs, via a personal computer (“PC”), by:
(1) Dial-up connection via public switched telephone networks (“PSTN”); or
(2) The Internet (Web) by:
(i) Web browser; or
(ii) Telnet session.
(b) Dial-up connection via PSTN. (1) This connection option requires that tariffs provide:
(i) A minimum of a 14.4Kbps modem capable of receiving incoming calls;
(ii) Smart terminal capability for VT-100 terminal or terminal emulation access; and
(iii) Telephone line quality for data transmission.
(2) The modem may be included in a collection (bank) of modems as long as all modems in the bank meet the minimum speed.
(c) Internet connection. (1) This connection option requires that systems provide:
(i) A universal resource locator (“URL”) Internet address (e.g., http://www.tariffsrus.com or http://1.2.3.4); and/or
(ii) A URL Internet address (e.g., telnet://tariffsrus or telnet://1.2.3.4), for Telnet session access over the Internet.
(2) Carriers or conferences shall ensure that their Internet service providers provide static Internet addresses.
(d) Commission access. Commission telecommunications access to systems must include connectivity via a dial-up connection over PSTNs or a connection over the Internet. Connectivity will be provided at the expense of the publishers. Any recurring connection fees, hardware rental fees, usage fees or any other charges associated with the availability of the system are the responsibility of the publisher. The Commission shall only be responsible for the long-haul charges for PSTN calls to a tariff initiated by the FMC.
(e) Limitations. (1) Tariffs must be made available to any person without time, quantity, or other limitations.
(2) Carriers are not required to provide remote terminals for access under this section.
(3) Carriers and conferences may assess a reasonable fee for access to their tariff publication systems and such fees shall not be discriminatory.
(4) Tariff publication systems shall provide user instructions for access to tariff information.
(f) Federal agencies. Carriers and conferences may not assess any access charges against the Commission or any other Federal agency.
(g) User identifications. Carriers and conferences shall provide the Commission with the documentation it requires and the number of user identifications and passwords it requests to facilitate the Commission’s access to their systems, if they require such identifications and passwords.
§ 520.10 Integrity of tariffs.
(a) Historical data. Carriers and conferences shall maintain the data that appeared in their tariff publication systems for a period of five (5) years from the date such information is superseded, canceled or withdrawn, and shall provide on-line access to such data for two (2) years. After two (2) years, such data may be retained on-line or in other electronic form, and shall be made available to any person or the Commission upon request in a reasonable period of time. Carriers and conferences may charge a reasonable fee for the provision of historical data, not to exceed the fees for obtaining such data on-line. No fee shall apply to federal agencies.
(b) Access date capability. Each tariff shall provide the capability for a retriever to enter an access date, i.e., a specific date for the retrieval of tariff data, so that only data in effect on that date would be directly retrievable. This capability would also align any rate adjustments and assessorial charges that were effective on the access date for rate calculations and designation of applicable surcharges. The access date shall also apply to the alignment of tariff objects for any governing tariffs.
(c) Periodic review. The Commission will periodically review published tariff systems and will prohibit the use of any system that fails to meet the requirements of this part.
(d) Access to systems. Carriers and conferences shall provide the Commission reasonable access to their automated systems and records in order to conduct reviews.
§ 520.11 Non-vessel-operating common carriers.
(a) Financial responsibility. An ocean transportation intermediary that operates as a non-vessel-operating common carrier shall state in its tariff publication:
(1) That it has furnished the Commission proof of its financial responsibility in the manner and amount required by part 515 of this chapter;
(2) The manner of its financial responsibility;
(3) Whether it is relying on coverage provided by a group or association to which it is a member;
(4) The name and address of the surety company, insurance company or guarantor issuing the bond, insurance policy, or guaranty;
(5) The number of the bond, insurance policy or guaranty; and
(6) Where applicable, the name and address of the group or association providing coverage.
(b) Agent for service. Every NVOCC not in the United States shall state the name and address of the person in the United States designated under part 515 of this chapter as its legal agent for service of process, including subpoenas. The NVOCC shall further state that in any instance in which the designated legal agent cannot be served because of death, disability or unavailability, the Commission’s Secretary will be deemed to be its legal agent for service of process.
(c) Co-Loading. (1) NVOCCs shall address the following situations in their tariffs:
(i) If an NVOCC does not tender cargo for co-loading, this shall be noted in its tariff.
(ii) If two or more NVOCCs enter into an agreement which establishes a carrier-to-carrier relationship for the co-loading of cargo, then the existence of such agreement shall be noted in the tariff.
(iii) If two NVOCCs enter into a co-loading arrangement which results in a shipper-to-carrier relationship, the tendering NVOCC shall describe its co-loading practices and specify its responsibility to pay any charges for the transportation of the cargo. A shipper-to-carrier relationship shall be presumed to exist where the receiving NVOCC issues a bill of lading to the tendering NVOCC for carriage of the co-loaded cargo.
(2) Documentation requirements. An NVOCC which tenders cargo to another NVOCC for co-loading, whether under a shipper-to-carrier or carrier-to-carrier relationship, shall annotate each applicable bill of lading with the identity of any other NVOCC to which the shipment has been tendered for co-loading. Such annotation shall be shown on the face of the bill of lading in a clear and legible manner.
(3) Co-loading rates. No NVOCC may offer special co-loading rates for the exclusive use of other NVOCCs. If cargo is accepted by an NVOCC from another NVOCC which tenders that cargo in the capacity of a shipper, it must be rated and carried under tariff provisions which are available to all shippers.
§ 520.12 Time/Volume rates.
(a) General. Common carriers or conferences may publish in their tariffs rates which are conditioned upon the receipt of a specified aggregate volume of cargo or aggregate freight revenue over a specified period of time.
(b) Publication requirements. (1) All rates, charges, classifications rules and practices concerning time/volume rates must be set forth in the carrier’s or conference’s tariff.
(2) The tariff shall identify:
(i) The shipment records that will be maintained to support the rate; and
(ii) The method to be used by shippers giving notice of their intention to use a time/volume rate prior to tendering any shipments under the time/volume arrangement.
(c) Accepted rates. Once a time/volume rate is accepted by one shipper, it shall remain in effect for the time specified, without amendment. If no shipper gives notice within 30 days of publication, the time/volume rate may be canceled.
(d) Records. Shipper notices and shipment records supporting a time/volume rate shall be maintained by the offering carrier or conference for at least 5 years after a shipper’s use of a time/volume rate has ended.
(e) Liquidated damages. Time/volume rates may not impose or attempt to impose liquidated damages on any shipper that moves cargo under the rate. Carriers and agreements shall rerate cargo moved at the applicable tariff rate, if a shipper fails to meet the requirements of the time/volume offer.
§ 520.13 Exemptions and exceptions.
(a) General. Exemptions from the requirements of this part are governed by section 16 of the Act (46 U.S.C. 40103) and Rule 67 of the Commission’s Rules of Practice and Procedure, § 502.67 of this chapter.
(b) Services. The following services are exempt from the requirements of this part:
(1) Equipment interchange agreements. Equipment-interchange agreements between common carriers subject to this part and inland carriers, where such agreements are not referred to in the carriers’ tariffs and do not affect the tariff rates, charges or practices of the carriers.
(2) Controlled carriers in foreign commerce. A controlled common carrier shall be exempt from the provisions of this part exclusively applicable to controlled carriers when:
(i) The vessels of the controlling state are entitled by a treaty of the United States to receive national or most-favored-nation treatment; or
(ii) The controlled carrier operates in a trade served exclusively by controlled carriers.
(3) Terminal barge operators in Pacific Slope states. Transportation provided by terminal barge operators in Pacific Slope states barging containers and containerized cargo by barge between points in the United States are exempt from the tariff publication requirements of Act and the rules of this part, where:
(i) The cargo is moving between a point in a foreign country or a non-contiguous State, territory, or possession and a point in the United States;
(ii) The transportation by barge between points in the United States is furnished by a terminal operator as a service substitute in lieu of a direct vessel call by the common carrier by water transporting the containers or containerized cargo under a through bill of lading; and
(iii) Such terminal operator is a Pacific Slope state, municipality, or other public body or agency subject to the jurisdiction of the Commission, and the only one furnishing the particular circumscribed barge service in question as of January 2, 1975.
(c) Cargo types. The following cargo types are not subject to the requirements of this part:
(1) Bulk cargo, forest products, etc. This part does not apply to bulk cargo, forest products, recycled metal scrap, new assembled motor vehicles, waste paper and paper waste. Carriers or conferences which voluntarily publish tariff provisions covering otherwise exempt transportation thereby subject themselves to the requirements of this part, including the requirement to adhere to the tariff provisions.
(2) Mail in foreign commerce. Transportation of mail between the United States and foreign countries.
(3) Used military household goods. Transportation of used military household goods and personal effects by ocean transportation intermediaries.
(4) Department of Defense cargo. Transportation of U.S. Department of Defense cargo moving in foreign commerce under terms and conditions negotiated and approved by the Military Transportation Management Command (“MTMC”) and published in a universal service contract. An exact copy of the universal service contract, including any amendments thereto, shall be filed in paper format with the Commission as soon as it becomes available.
(5) Used household goods – General Services Administration. Transportation of used household goods and personal effects by ocean transportation intermediaries shipped for federal civilian executive agencies under the International Household Goods Program administered by the General Services Administration.
(d) Services involving foreign countries. The following transportation services involving foreign countries are not subject to the requirements of this part:
(1) Between foreign countries. This part does not apply to transportation of cargo between foreign countries, including that which is transshipped from one ocean common carrier to another (or between vessels of the same common carrier) at a U.S. port or transferred between an ocean common carrier and another transportation mode at a U.S. port for overland carriage through the United States, where the ocean common carrier accepts custody of the cargo in a foreign country and issues a through bill of lading covering its transportation to a foreign point of destination.
(2) Between Canada and U.S. The following services are exempt from the filing requirements of the Act and the rules of this part:
(i) Prince Rupert and Alaska. (A) Vehicles. Transportation by vessels operated by the State of Alaska between Prince Rupert, Canada and ports in southeastern Alaska, if all the following conditions are met:
(1) Carriage of property is limited to vehicles;
(2) Tolls levied for vehicles are based solely on space utilized rather than the weight or contents of the vehicle and are the same whether the vehicle is loaded or empty;
(3) The vessel operator does not move the vehicles on or off the ship; and
(4) The common carrier does not participate in any joint rate establishing through routes or in any other type of agreement with any other common carrier.
(B) Passengers. Transportation of passengers, commercial buses carrying passengers, personal vehicles and personal effects by vessels operated by the State of Alaska between Seattle, Washington and Prince Rupert, Canada, only if such vehicles and personal effects are the accompanying personal property of the passengers and are not transported for the purpose of sale.
(ii) British Columbia and Puget Sound Ports; rail cars – (A) Through rates. Transportation by water of cargo moving in rail cars between British Columbia, Canada and United States ports on Puget Sound, and between British Columbia, Canada and ports or points in Alaska, only if the cargo does not originate in or is not destined to foreign countries other than Canada, but only if:
(1) The through rates are filed with the Surface Transportation Board and/or the Canadian Transport Commission; and
(2) Certified copies of the rate divisions and of all agreements, arrangements or concurrences, entered into in connection with the transportation of such cargo, are filed with the Commission within 30 days of the effectiveness of such rate divisions, agreements, arrangements or concurrences.
(B) Bulk; port-to-port. Transportation by water of cargo moving in bulk without mark or count in rail cars on a local port-to-port rate basis between ports in British Columbia, Canada and United States ports on Puget Sound, only if the rates charged for any particular bulk type commodity on any one sailing are identical for all shippers, except that:
(1) This exemption shall not apply to cargo originating in or destined to foreign countries other than Canada; and
(2) The carrier will remain subject to all other provisions of the Act.
(iii) Incan Superior, Ltd. Transportation by Incan Superior, Ltd. of cargo moving in railroad cars between Thunder Bay, Ontario, and Superior, Wisconsin, only if the cargo does not originate in or is not destined to foreign countries other than Canada, and if:
(A) The through rates are filed with the Surface Transportation Board and/or the Canadian Transport Commission; and
(B) Certified copies of the rate divisions and all agreements, arrangements or concurrences entered into in connection with the transportation of such cargo are filed with the Commission within 30 days of the effectiveness of such rate divisions, agreements, arrangements or concurrences.
(e) NVOCC Negotiated Rate Arrangements. An NVOCC that satisfies the requirements of part 532 of this chapter is exempt from the requirement in this part that it include rates in a tariff open to public inspection in an automated tariff system.
§ 520.14 Special permission.
(a) General. Section 8(d) of the Act (46 U.S.C. 40501(e)) authorizes the Commission, in its discretion and for good cause shown, to permit increases or decreases in rates, or the issuance of new or initial rates, on less than the statutory notice. Section 9(c) of the Act (46 U.S.C. 40703, 40704(a)) authorizes the Commission to permit a controlled carrier’s rates, charges, classifications, rules or regulations to become effective on less than 30 days’ notice. The Commission may also in its discretion and for good cause shown, permit departures from the requirements of this part.
(b) Clerical errors. Typographical and/or clerical errors constitute good cause for the exercise of special permission authority but every application based thereon must plainly specify the error and present clear evidence of its existence, together with a full statement of the attending circumstances, and shall be submitted with reasonable promptness after publishing the defective tariff material.
(c) Application. (1) Applications for special permission to establish rate increases or decreases on less than statutory notice or for waiver of the provisions of this part, shall be made by the common carrier, conference or agent for publishing. Every such application must be submitted to the Bureau of Trade Analysis and be accompanied by a filing fee of $307.
(2) Applications for special permission shall be made only by letter, except that in emergency situations, application may be made by telephone or facsimile if the communication is promptly followed by a letter and the filing fee.
(3) Applications for special permission shall contain the following information:
(i) Organization name, number and trade name of the conference or carrier;
(ii) Tariff number and title; and
(iii) The rate, commodity, or rules related to the application, and the special circumstances which the applicant believes constitute good cause to depart from the requirements of this part or to warrant a tariff change upon less than the statutory notice period.
(d) Implementation. The authority granted by the Commission shall be used in its entirety, including the prompt publishing of the material for which permission was requested. Applicants shall use the special case number assigned by the Commission with the symbol “S”.
§ 520.91 OMB control number assigned pursuant to the Paperwork Reduction Act.
The Commission has received OMB approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. In accordance with the Act, agencies are required to display a currently valid control number. The valid control number for this collection of information is 3072-0064.
Appendix A to Part 520 – Standard Terminology and Codes
I – Publishing/Amendment Type Codes
| Code | Definition |
|---|---|
| A | Increase. |
| C | Change resulting in neither increase nor decrease in rate or charges. |
| E | Expiration (also use “A” if the deletion results in the application of a higher “cargo, n.o.s.” or similar rate). |
| I | New or initial matter. |
| K | Rate or change filed by a controlled common carrier member of a conference under independent action. |
| M | Transportation of U.S. Department of Defense cargo by American-flag common carriers. |
| P | Addition of a port or point. |
| R | Reduction. |
| S | Special Case matter filed pursuant to Special Permission, Special Docket or other Commission direction, including filing of tariff data after suspension, such as for controlled carriers. Requires “Special Case Number.” |
| T | Terminal Rates, charges or provisions or canal tolls over which the carrier has no control. |
| W | Withdrawal of an erroneous publication on the same publication date. |
| X | Exemption for controlled carrier data in trades served exclusively by controlled carriers or by controlled carriers of states receiving most-favored-nation treatment. |
II – Unit Codes
| A. Weight Units: | |
| Kilograms | KGS |
| 1000 Kgs (Metric Ton) | KT |
| Pounds | LBS |
| Long Ton (2240 LBS) | LT |
| Short Ton (2000 LBS) | ST |
| B. Volume Units: | |
| Cubic meter | CBM |
| Cubic feet | CFT |
| C. Length Units: | |
| Centimeters | CM |
| Feet | FT |
| Inches | IN |
| Meters | M |
| D. Measure Board Feet: | |
| Thousand Board Feet | MBF |
| E. Distance Units: | |
| Kilometers | KM |
| Miles | MI |
| F. Rate Basis: | |
| Ad Valorem | AV |
| Each | EA |
| Lump Sum | LS |
| Measure | M |
| Thousand Board Feet | MBF |
| Per Container | PC |
| Weight | W |
| Weight/Measure | WM |
| G. Container Size Codes: | |
| Not Applicable | N/A |
| Less Than Load | LTL |
| 10 FT Any Height | 10X |
| 20 FT 8′6″ | 20 |
| 20 FT 9′0″ High Cube | 20A |
| 20 FT 9′6″ High Cube | 20B |
| 20 FT 8′0″ | 20S |
| 20 FT Any Height | 20X |
| 24 FT 8′6″ | 24 |
| 24 FT 9′0″ High Cube | 24A |
| 24 FT 9′6″ High Cube | 24B |
| 24 FT 8′0″ | 24S |
| 24 FT Any Height | 24X |
| 35 FT 8′6″ | 35 |
| 35 FT 9′0″ High Cube | 35A |
| 35 FT 9′6″ High Cube | 35B |
| 35 FT 8′0″ | 35S |
| 35 FT Any Height | 35X |
| 40 FT 8′6″ | 40 |
| 40 FT 9′0″ High Cube | 40A |
| 40 FT 9′6″ High Cube | 40B |
| 40 FT 8′0″ | 40S |
| 40 FT Any Height | 40X |
| 42 FT 8′6″ | 42 |
| 42 FT 9′0″ High Cube | 42A |
| 42 FT 9′6″ High Cube | 42B |
| 42 FT 8′0″ | 42S |
| 42 FT Any Height | 42X |
| 43 FT 8′6″ | 43 |
| 43 FT 9′0″ High Cube | 43A |
| 43 FT 9′6″ High Cube | 43B |
| 43 FT 8′0″ | 43S |
| 43 FT Any Height | 43X |
| 45 FT 8′6″ | 45 |
| 45 FT 9′0″ High Cube | 45A |
| 45 FT 9′6″ High Cube | 45B |
| 45 FT 8′0″ | 45S |
| 45 FT Any Height | 45X |
| 48 FT 8′6″ | 48 |
| 48 FT 9′0″ High Cube | 48A |
| 48 FT 9′6″ High Cube | 48B |
| 48 FT 8′0″ | 48S |
| 48 FT Any Height | 48X |
| 53 FT 8′6″ | 53 |
| 53 FT 9′0″ High Cube | 53A |
| 53 FT 9′6″ High Cube | 53B |
| 53 FT 8′0″ | 53S |
| 53 FT Any Height | 53X |
| H. Container Type Codes: | |
| Not Applicable | N/A |
| Atmosphere Control | AC |
| Collapsible Flatrack | CF |
| Drop Frame | DF |
| Flat Bed | FB |
| Flat Rack | FR |
| Garment Container | GC |
| Half-Height | HH |
| Hardtop | HT |
| Insulated | IN |
| Open Top | OT |
| Dry | PC |
| Platform | PL |
| Reefer | RE |
| Tank | TC |
| Top Loader | TL |
| Trailer | TR |
| Vehicle Racks | VR |
| I. Container Temperature Codes: | |
| Not Appl/Operating | N/A |
| Artificial Atmo Ctrl | AC |
| Chilled | CLD |
| Frozen | FRZ |
| Heated | HTD |
| Refrigerated | RE |
| Ventilated | VEN |
| J. Packaging Codes: | |
| Bag | BAG |
| Bale | BAL |
| Bar | BAR |
| Barrel | BBL |
| Bundle | BDL |
| Beam | BEM |
| Bing Chest | BIC |
| Bin | BIN |
| Bulk | BLK |
| Bobbin | BOB |
| Box | BOX |
| Barge | BRG |
| Basket/Hamper | BSK |
| Bushel | BUS |
| Box, with Inner Cntn | BXI |
| Bucket | BXT |
| Cabinet | CAB |
| Cage | CAG |
| Can | CAN |
| Carrier | CAR |
| Case | CAS |
| Cntnrs of Bulk Cargo | CBC |
| Carboy | CBY |
| Can Case | CCS |
| Cheeses | CHE |
| Core | COR |
| Cradle | CRD |
| Crate | CRT |
| Cask | CSK |
| Carton | CTN |
| Cylinder | CYL |
| Dry Bulk | DBK |
| Double-length Rack | DRK |
| Drum | DRM |
| Double-length Skid | DSK |
| Double-length | DTB |
| Firkin | FIR |
| Flo-Bin | FLO |
| Frame | FRM |
| Flask | FSK |
| Forward Reel | FWR |
| Garment on Hanger | GOH |
| Heads of Beef | HED |
| Hogshead | HGH |
| Hopper Car | HPC |
| Hopper Truck | HPT |
| On Hanger/Rack in bx | HRB |
| Half-Standard Rack | HRK |
| Half-Stand. Tote Bin | HTB |
| Jar | JAR |
| Keg | KEG |
| Kit | KIT |
| Knockdown Rack | KRK |
| Knockdown Wood Crates | KWC |
| Knockdown Tote Bin | KTB |
| Liquid Bulk | LBK |
| Lifts | LIF |
| Log | LOG |
| Loose | LSE |
| Lug | LUG |
| Lift Van | LVN |
| Multi-roll Pak | MRP |
| Noil | NOL |
| Nested | NST |
| Pail | PAL |
| Packed – NOS | PCK |
| Pieces | PCS |
| Pirns | PIR |
| Package | PKG |
| Platform | PLF |
| Pipe Line | PLN |
| Pallet | PLT |
| Private Vehicle | POV |
| Pipe Rack | PRK |
| Quarters of Beef | QTR |
| Rail (semiconductor) | RAL |
| Rack | RCK |
| Reel | REL |
| Roll | ROL |
| Reverse Reel | RVR |
| Sack | SAK |
| Shook | SHK |
| Sides of Beef | SID |
| Skid | SKD |
| Skid, Elev, Lift Trk | SKE |
| Sleeve | SLV |
| Spin Cylinders | SPI |
| Spool | SPL |
| Tube | TBE |
| Tote Bin | TBN |
| Tank Car Rail | TKR |
| Tank Truck | TKT |
| Intermdl Trlr/Cntnr | TLD |
| Tank | TNK |
| Tierce | TRC |
| Trunk and Chest | TRK |
| Tray | TRY |
| Trunk, Salesmen Samp | TSS |
| Tub | TUB |
| Unpacked | UNP |
| Unit | UNT |
| Vehicles | VEH |
| Van Pack | VPK |
| On Own Wheels | WHE |
| Wheeled Carrier | WLC |
| Wood Crates | WC |
| Wrapped | WRP |
| Not Applicable | N/A |
| K. Shipment Stowage Location Codes: | |
| Not Applicable | N/A |
| On Deck | OD |
| Bottom Stowage | BS |
| L. Hazard Codes: | |
| Not Applicable | N/A |
| IMD Stow Category A | A |
| IMD Stow Category B | B |
| IMD Stow Category C | C |
| IMD Stow Category D | D |
| IMD Stow Category E | E |
| Hazardous | HAZ |
| Non-Hazardous | NHZ |
| M. Stuffing/Stripping Modes: | |
| Not Applicable | N/A |
| Mechanical | MECH |
| Hand Loading | HAND |
| N. Inland Transportation Modes: | |
| Not Applicable | N/A |
| Motor | M |
| Rail | R |
| Barge | B |
| Motor/Rail | MR |
| Rail/Motor | RM |
| Motor/Barge | MB |
| Barge/Motor | BM |
| Rail/Barge | RB |
| Barge/Rail | BR |
| O. Shipment Service Types: | |
| Barge | B |
| Door | D |
| House | H |
| Motor | M |
| Ocean Port | O |
| Pier | P |
| Rail Yard | R |
| Container Station | S |
| Terminal | T |
| Container Yard | Y |
| Rail Siding | U |
| Team Tracks | X |
| P. Freight Forwarder/Broker Type Codes: | |
| Not Applicable | N/A |
| Freight Forwarder | FF |
| Customs House Broker | CB |
| Other | OTH |
| Q. Tariff Type Codes: | |
| Bill of Lading Tariff | BL |
| Equipment Interchange Agreement Tariff | EI |
| Essential Terms Publication | ET |
| Foreign Commodity Tariff | FC |
| Foreign Rules Tariff | FR |
| Terminal Tariff | TM |
| Service Contracts | SC |
PART 525 – MARINE TERMINAL OPERATOR SCHEDULES
§ 525.1 Purpose and scope.
(a) Purpose. This part implements the Shipping Act of 1984, as amended (46 U.S.C. 40101-41309). The requirements of this part are necessary to enable the Commission to meet its responsibilities with regard to identifying and preventing unreasonable preference or prejudice and unjust discrimination pursuant to section 10 of the Act (46 U.S.C. 41101-41106).
(b) Scope. This part sets forth the regulations for the publication of terminal schedules by marine terminal operators. Information made available under this part may be used to determine marine terminal operators’ compliance with shipping statutes and regulations.
(c) Definitions. The following definitions apply to the regulations of this part:
(1) Act means the Shipping Act of 1984, as amended.
(2) Bulk cargo means cargo that is loaded and carried in bulk without mark or count, in a loose unpackaged form, having homogenous characteristics. Bulk containerized cargo tendered by the shipper is subject to mark and count and is, therefore, subject to the requirements of this part.
(3) Checking means the service of counting and checking cargo against appropriate documents for the account of the cargo or the vessel, or other person requesting same.
(4) Commission means the Federal Maritime Commission.
(5) Dockage means the charge assessed against a vessel for berthing at a wharf, pier, bulkhead structure, or bank or for mooring to a vessel so berthed.
(6) Effective date means the date a schedule or an element of a schedule becomes effective. Where there are multiple publications on the same day, the last schedule or element of a schedule published with the same effective date is the one effective for that day.
(7) Expiration date means the last day after which the entire schedule or a single element of the schedule, is no longer in effect.
(8) Forest products means forest products including, but not limited to, lumber in bundles, rough timber, ties, poles, piling, laminated beams, bundled siding, bundled plywood, bundled core stock or veneers, bundled particle or fiber boards, bundled hardwood, wood pulp in rolls, wood pulp in unitized bales, paper and paper board in rolls or in pallet or skid-sized sheets, liquid or granular by-products derived from pulping and papermaking, and engineered wood products.
(9) Free time means the period specified in the terminal schedule during which cargo may occupy space assigned to it on terminal property, including off-dock facilities, free of wharf demurrage or terminal storage charges immediately prior to the loading or subsequent to the discharge of such cargo on or off the vessel.
(10) Handling means the service of physically moving cargo between point of rest and any place on the terminal facility, other than the end of ship’s tackle.
(11) Heavy lift means the service of providing heavy lift cranes and equipment for lifting cargo.
(12) Loading and unloading means the service of loading or unloading cargo between any place on the terminal and railroad cars, trucks, lighters or barges or any other means of conveyance to or from the terminal facility.
(13) Marine terminal operator means a person engaged in the United States in the business of providing wharfage, dock, warehouse or other terminal facilities in connection with a common carrier, or in connection with a common carrier and a water carrier subject to Subchapter II of Chapter 135 of Title 49, United States Code. A marine terminal operator includes, but is not limited to, terminals owned or operated by states and their political subdivisions; railroads who perform port terminal services not covered by their line haul rates; common carriers who perform port terminal services; and warehousemen who operate port terminal facilities. For the purposes of this part, marine terminal operator includes conferences of marine terminal operators. This term does not include shippers or consignees who exclusively provide their own marine terminal facilities in connection with tendering or receiving proprietary cargo from a common carrier or water carrier.
(14) Organization name means an entity’s name on file with the Commission and for which the Commission assigns an organizational number.
(15) Person includes individuals, firms, partnerships, associations, companies, corporations, joint stock associations, trustees, receivers, agents, assignees and personal representatives.
(16) Rate means a price quoted in a schedule for providing a specified level of marine terminal service or facility for a stated cargo quantity, on and after a stated effective date or within a defined time frame.
(17) Schedule means a publication containing the actual rates, charges, classifications, regulations and practices of a marine terminal operator. The term “practices” refers to those usages, customs or modes of operation which in any way affect, determine or change the rates, charges or services provided by a marine terminal operator.
(18) Terminal facilities means one or more structures comprising a terminal unit, which include, but are not limited to docks, berths, piers, aprons, wharves, warehouses, covered and/or open storage spaces, cold storage plants, cranes, grain elevators and/or bulk cargo loading and/or unloading structures, landings, and receiving stations, used for the transmission, care and convenience of cargo and/or passengers in the interchange of same between land and ocean common carriers or between two ocean common carriers.
(19) Terminal services includes checking, dockage, free time, handling, heavy lift, loading and unloading, terminal storage, usage, wharfage, and wharf demurrage, as defined in this section. The definitions of terminal services set forth in this section shall be set forth in terminal schedules, except that other definitions of terminal services may be used if they are correlated by footnote, or other appropriate method, to the definitions set forth herein. Any additional services which are offered shall be listed and charges therefor shall be shown in the terminal schedule.
(20) Terminal storage means the service of providing warehouse or other terminal facilities for the storage of inbound or outbound cargo after the expiration of free time, including wharf storage, shipside storage, closed or covered storage, open or ground storage, bonded storage and refrigerated storage.
(21) United States means the States of the United States, the District of Columbia, Guam, Puerto Rico, the Virgin Islands, American Samoa, the Northern Mariana Islands, and any other territory or possession of the United States.
(22) Usage means the use of a terminal facility by any rail carrier, lighter operator, trucker, shipper or consignee, its agents, servants, and/or employees, when it performs its own car, lighter or truck loading or unloading, or the use of said facilities for any other gainful purpose for which a charge is not otherwise specified.
(23) Wharf demurrage means a charge assessed against cargo remaining in or on terminal facilities after the expiration of free time, unless arrangements have been made for storage.
(24) Wharfage means a charge assessed against the cargo or vessel on all cargo passing or conveyed over, onto, or under wharves or between vessels (to or from barge, lighter, or water), when berthed at wharf or when moored in slip adjacent to a wharf. Wharfage is solely the charge for use of a wharf and does not include charges for any other service.
§ 525.2 Terminal schedules.
(a) Marine terminal operator schedules. A marine terminal operator, at its discretion, may make available to the public, subject to section 10(d) of the Act (46 U.S.C. 41102(c), 41103, 41106), a schedule of its rates, regulations, and practices.
(1) Limitations of liability. Any limitations of liability for cargo loss or damage pertaining to receiving, delivering, handling, or storing property at the marine terminal contained in a terminal schedule must be consistent with domestic law and international conventions and agreements adopted by the United States; such terminal schedules cannot contain provisions that exculpate or relieve marine terminal operators from liability for their own negligence, or that impose upon others the obligation to indemnify or hold-harmless the terminals from liability for their own negligence.
(2) Enforcement of terminal schedules. Any schedule that is made available to the public by the marine terminal operator shall be enforceable by an appropriate court as an implied contract between the marine terminal operator and the party receiving the services rendered by the marine terminal operator, without proof that such party has actual knowledge of the provisions of the applicable terminal schedule.
(3) Contracts for terminal services. If the marine terminal operator has an actual contract with a party covering the services rendered by the marine terminal operator to that party, an existing terminal schedule covering those same services shall not be enforceable as an implied contract.
(b) Cargo types not subject to this part. (1) Except as set forth in paragraph (b)(2) of this section, this part does not apply to bulk cargo, forest products, recycled metal scrap, new assembled motor vehicles, waste paper and paper waste in terminal schedules.
(2) Marine terminal operators which voluntarily make available terminal schedules covering any of the commodities identified in paragraph (b)(1) of this section thereby subject their services with respect to those commodities to the requirements of this part.
(c) Marine terminal operator agreements. The regulations relating to agreements to which a marine terminal operator is a party are located at part 535 of this chapter.
§ 525.3 Availability of marine terminal operator schedules.
(a) Availability of terminal schedules – (1) Availability to the Commission. A complete and current set of terminal schedules used by a marine terminal operator, or to which it is a party, shall be maintained in its office(s) for a period of five (5) years, whether or not made available to the public, and shall promptly be made available to the Commission upon request.
(2) Availability to the public. Any terminal schedule that is made available to the public shall be available during normal business hours and in electronic form. The public may be assessed a reasonable nondiscriminatory charge for access to the terminal schedules; no charge will be assessed against the Commission.
(b) Access to electronically published schedules. Marine terminal operators shall provide access to their terminal schedules via the internet.
(c) Internet connection. (1) The internet connection requires that systems provide a uniform resource locator (URL) internet address (e.g., http://www.tariffsrus.com or http://1.2.3.4).
(2) Marine terminal operators shall ensure that their internet service providers provide static internet addresses.
(d) Notification. Each marine terminal operator shall notify the Commission’s Bureau of Trade Analysis (BTA), prior to the commencement of marine terminal operations, of its organization name, home office address, contact information for its representative, the location of its terminal schedule(s), and the publisher, if any, used to maintain its terminal schedule, by electronically submitting Form FMC-1 via the Commission’s website at www.fmc.gov. Any changes to the above information shall be immediately transmitted to BTA within 30 calendar days. BTA has the authority to accept submitted Form FMC-1 filings and revisions. Form FMC-1 filings are pending until accepted. The Commission will publish, on its website, the location of any terminal schedule made available to the public.
(e) Form and manner. A marine terminal operator may make available to the public a schedule of rates, regulations, and practices, including limitations of liability for cargo loss or damage, pertaining to receiving, delivering, handling, or storing property at its marine terminal. Any such schedule made available to the public is enforceable by an appropriate court as an implied contract without proof of actual knowledge of its provisions. Each terminal schedule made available by a marine terminal operator shall contain an individual identification number, effective date, expiration date, if any, and the terminal schedule in full text and/or data format showing the relevant rates, charges, and regulations relating to or connected with the receiving, handling, storing, and/or delivering of property at its terminal facilities.
(f) Notification. Each marine terminal operator shall notify the Commission’s Bureau of Tariffs, Certification and Licensing (“BTCL”), prior to the commencement of marine terminal operations, of its organization name, organization number, home office address, name and telephone number of firm’s representative, the location of its terminal schedule(s), and the publisher, if any, used to maintain its terminal schedule, by electronically submitting Form FMC-1 via the Commission’s website at www.fmc.gov. Any changes to the above information shall be immediately transmitted to BTCL. The Commission will publish a list on its website of the location of any terminal schedule made available to the public.
(g) Form and manner. Each terminal schedule made available by a marine terminal operator shall contain an individual identification number, effective date, expiration date, if any, and the complete terminal schedule in full text and/or data format showing all its rates, charges, and regulations relating to or connected with the receiving, handling, storing, and/or delivering of property at its terminal facilities.
§ 525.4 OMB control number assigned pursuant to the Paperwork Reduction Act.
The Commission has received Office of Management and Budget approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. In accordance with that Act, agencies are required to display a currently valid control number. In this regard, the valid control number for this collection of information is 3072-0061.
PART 530 – SERVICE CONTRACTS
Subpart A – General Provisions
§ 530.1 Purpose.
The purpose of this part is to facilitate the filing of service contracts as required by section 8(c) of the Shipping Act of 1984 (“the Act”) (46 U.S.C. 40502). This part enables the Commission to review service contracts to ensure that these contracts and the parties to them comport with the requirements of the Act. This part also implements electronic filing provisions for service contracts to facilitate compliance and minimize the filing burdens on the oceanborne commerce of the United States.
§ 530.2 Scope and applicability.
An individual ocean common carrier or an agreement between or among ocean common carriers may enter into a service contract with one or more shippers subject to the requirements of the Act.
§ 530.3 Definitions.
When used in this part:
(a) Act means the Shipping Act of 1984 as amended by the Ocean Shipping Reform Act of 1998.
(b) Agreement means an understanding, arrangement, or association (written or oral) and any modification or cancellation thereof which has been filed and effective under part 535 of this chapter with the Commission. The term does not include a maritime labor agreement.
(c) Authorized person means a carrier or a duly appointed agent who is authorized to file service contracts on behalf of the carrier party to a service contract and is registered by the Commission to file under § 530.5(c) and appendix A to this part.
(d) BTA means the Commission’s Bureau of Trade Analysis or its successor bureau.
(e) Commission means the Federal Maritime Commission.
(f) Common carrier means a person holding itself out to the general public to provide transportation by water of passengers or cargo between the United States and a foreign country for compensation that:
(1) Assumes responsibility for the transportation from the port or point of receipt to the port or point of destination; and
(2) Utilizes, for all or part of that transportation, a vessel operating on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, or chemical parcel tanker, or by a vessel when primarily engaged in the carriage of perishable agricultural commodities:
(i) If the common carrier and the owner of those commodities are wholly owned, directly or indirectly, by a person primarily engaged in the marketing and distribution of those commodities and
(ii) Only with respect to those commodities.
(g) Conference means an agreement between or among two or more ocean common carriers which provides for the fixing of and adherence to uniform rates, charges, practices and conditions of service relating to the receipt, carriage, handling and/or delivery of passengers or cargo for all members. The term does not include joint service, pooling, sailing, space charter, or transshipment agreements.
(h) Controlled carrier means an ocean common carrier that is, or whose operating assets are, directly or indirectly owned or controlled by a government. Ownership or control by a government shall be deemed to exist with respect to any ocean common carrier if:
(1) A majority portion of the interest in the carrier is owned or controlled in any manner by that government, by any agency thereof, or by any public or private person controlled by that government; or
(2) That government has the right to appoint or disapprove the appointment of a majority of the directors, the chief operating officer or the chief executive officer of the carrier.
(i) Effective date means the date upon which a service contract or amendment is scheduled to go into effect by the parties to the contract. A service contract or amendment becomes effective at 12:01 a.m. Eastern Standard Time (Coordinated Universal Time (UTC)-05:00) on the effective date. The effective date may not be earlier than the date on which all parties have signed the service contract or amendment.
(j) Expiration date means the last day after which the entire service contract is no longer in effect.
(k) File or filing (of service contracts or amendments thereto) means the use of the Commission’s electronic filing system for receipt of a service contract or an amendment thereto by the Commission, consistent with the method set forth in appendix A of this part, and the recording of its receipt by the Commission.
(l) Labor agreement means a collective-bargaining agreement between an employer subject to the Act, or group of such employers, and a labor organization or an agreement preparatory to such a collective-bargaining agreement among members of a multi-employer bargaining group, or an agreement specifically implementing provisions of such a collective-bargaining agreement or providing for the formation, financing, or administration of a multi-employer bargaining group, but the term does not include an assessment agreement.
(m) Motor vehicle means a wheeled vehicle whose primary purpose is ordinarily the non-commercial transportation of passengers, including an automobile, pickup truck, minivan or sport utility vehicle.
(n) Ocean common carrier means a common carrier that operates, for all or part of its common carrier service, a vessel on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, or chemical parcel-tanker.
(o) OIT means the Commission’s Office of Information Technology.
(p) Non-vessel-operating common carrier (“NVOCC”) means an ocean transportation intermediary as defined by section 3(17)(B) of the Act (46 U.S.C. 40102(16)).
(q) Service contract means a written contract, other than a bill of lading or receipt, between one or more shippers and an individual ocean common carrier or an agreement between or among ocean common carriers in which the shipper makes a commitment to provide a certain minimum quantity or portion of its cargo or freight revenue over a fixed time period, and the individual ocean common carrier or the agreement commits to a certain rate or rate schedule and a defined service level, such as, assured space, transit time, port rotation, or similar service features. The contract may also specify provisions in the event of nonperformance on the part of any party.
(r) Shipper means a cargo owner; the person for whose account the ocean transportation is provided; the person to whom delivery is to be made; a shippers’ association; or an NVOCC that accepts responsibility for payment of all applicable charges under the service contract.
§ 530.4 Confidentiality.
All service contracts and amendments to service contracts filed with the Commission shall, to the full extent permitted by law, be held in confidence. Nothing contained in this part shall preclude the Commission from providing certain information from or access to service contracts to another agency of the Federal government of the United States.
§ 530.5 Duty to file.
(a) The duty under this part to file service contracts, amendments, and notices shall be upon the individual carrier party or parties participating or eligible to participate in the service contract.
(b) Filing may be accomplished by any duly agreed-upon agent, as the parties to the service contract may designate, and subject to conditions as the parties may agree.
(c) Registration – (1) Application. Authority to file or delegate the authority to file must be requested by a responsible official of the service contract carrier in writing by submitting to BTA the Registration Form (FMC-83) in Exhibit 1 to this part.
(2) Approved registrations. OIT shall provide approved Registrants a log-on ID and password for filing and amending service contracts and notify Registrants of such approval.
§ 530.6 Certification of shipper status.
(a) Certification. The shipper contract party shall sign and certify on the signature page of the service contract its shipper status (e.g., owner of the cargo, shippers’ association, NVOCC, or specified other designation), and the status of every affiliate of such contract party or member of a shippers’ association entitled to receive service under the contract.
(b) Proof of tariff and financial responsibility. If the certification completed by the contract party under paragraph (a) of this section identifies the contract party or an affiliate or member of a shippers’ association as an NVOCC, the ocean common carrier, conference or agreement shall obtain proof that such NVOCC has a published tariff and proof of financial responsibility as required under sections 8 (46 U.S.C. 40501-40503) and 19 (46 U.S.C. 40901-40904) of the Act before signing the service contract. An ocean common carrier, conference or agreement can obtain such proof by the same methods prescribed in § 515.27 of this chapter.
(c) Joining shippers’ association during term of contract. If an NVOCC joins a shippers’ association during the term of a service contract and is thereby entitled to receive service under the contract, the NVOCC shall provide to the ocean common carrier, agreement or conference the proof of compliance required by paragraph (b) of this section prior to making any shipments under the contract.
(d) Reliance on NVOCC proof; independent knowledge. An ocean common carrier, agreement or conference executing a service contract shall be deemed to have complied with 46 U.S.C. 41104(a)(12) upon meeting the requirements of paragraphs (a) and (b) of this section, unless the carrier party had reason to know such certification or documentation of NVOCC tariff and bonding was false.
§ 530.7 Duty to labor organizations.
(a) Terms. When used in this section, the following terms will have these meanings:
(1) Dock area and within the port area shall have the same meaning and scope as defined in the applicable collective bargaining agreement.
(2) Reasonable period of time ordinarily means:
(i) If the cargo in question is due to arrive in less than five (5) days from the date of receipt of the request as defined in paragraph (b) of this section, two (2) days from the date of receipt of the request; but
(ii) If cargo in question is due to arrive in more than five (5) days from the date of receipt of the request as defined in paragraph (b) of this section, four (4) days from the date of receipt of the request.
(3) Movement includes, but is not necessarily limited to, the normal and usual aspects of the loading and discharging of cargo in containers; placement, positioning and re-positioning of cargo or of containers; the insertion and removal of cargo into and from containers; and the storage and warehousing of cargo.
(4) Assignment includes, but is not limited to, the carrier’s direct or indirect control over the parties which, the manner by which, or the means by which the shipper’s cargo is moved, regardless of whether such movement is completed within or outside of containers.
(5) Transmit means communication by first-class mail, facsimile, telegram, hand-delivery, or electronic mail (“e-mail”).
(b) Procedure. In response to a written request transmitted from a labor organization with which it is a party or is subject to the provisions of a collective bargaining agreement with a labor organization, an ocean common carrier shall state, within a reasonable period of time, whether it is responsible for the following work at dock areas and within port areas in the United States with respect to cargo transported under a service contract:
(1) The movement of the shipper’s cargo on a dock area or within the port area or to or from railroad cars on a dock area or within a port area;
(2) The assignment of intraport carriage of the shipper’s cargo between areas on a dock or within the port area;
(3) The assignment of the carriage of the shipper’s cargo between a container yard on a dock area or within the port area and a rail yard adjacent to such container yard; or
(4) The assignment of container freight station work and maintenance and repair work performed at a dock area or within the port area.
(c) Applicability. This section requires the disclosure of information by an ocean common carrier only if there exists an applicable and otherwise lawful collective bargaining agreement which pertains to that carrier.
(d) Disclosure not deemed admission or agreement. No disclosure made by an ocean common carrier shall be deemed to be an admission or agreement that any work is covered by a collective bargaining agreement.
(e) Dispute resolution. Any dispute regarding whether any work is covered by a collective bargaining agreement and the responsibility of the ocean common carrier under such agreement shall be resolved solely in accordance with the dispute resolution procedures contained in the collective bargaining agreement and the National Labor Relations Act, and without reference to this section.
(f) Jurisdiction and lawfulness. Nothing in this section has any effect on the lawfulness or unlawfulness under the Shipping Act of 1984, the National Labor Relations Act, the Taft-Hartley Act, the Federal Trade Commission Act, the antitrust laws, or any other federal or state law, or any revisions or amendments thereto, of any collective bargaining agreement or element thereof, including any element that constitutes an essential term of a service contract under section 8(c) of the Act (46 U.S.C. 40502).
Subpart B – Filing Requirements
§ 530.8 Service Contracts.
(a) Filing. (1) Authorized persons shall file with BTA, in the manner set forth in appendix A of this part, a true and complete copy of every service contract and every amendment to a service contract no later than thirty (30) days after the effective date.
(2) Failure to file a service contract or amendment in accordance with paragraph (a)(1) of this section does not affect the applicability of the service contract or amendment to cargo received on or after the effective date by the ocean common carrier or its agent.
(b) Required terms. Every service contract filed with the Commission shall include the complete terms of the service contract including, but not limited to, the following:
(1) The origin port ranges in the case of port-to-port movements and geographic areas in the case of through intermodal movements;
(2) The destination port ranges in the case of port-to-port movements and geographic areas in the case of through intermodal movements;
(3) The commodity or commodities involved;
(4) The minimum volume or portion;
(5) The service commitments;
(6) The line-haul rate;
(7) Liquidated damages for non-performance (if any);
(8) Duration, including the
(i) Effective date; and
(ii) Expiration date;
(9) The legal names and business addresses of the contract parties; the legal names of affiliates entitled to access the contract; the names, titles and addresses of the representatives signing the contract for the parties; and the date upon which the service contract was signed, except that in the case of a contract entered under the authority of an agreement or by a shippers’ association, individual members need not be named unless the contract includes or excludes specific members. Subsequent references in the contract to the contract parties shall be consistent with the first reference (e.g., (exact name), “carrier,” “shipper,” or “association,” etc.). Carrier parties which enter into contracts that include affiliates must either:
(i) List the affiliates’ business addresses; or
(ii) Certify that this information will be provided to the Commission upon request within ten (10) business days of such request. However, the requirements of this section do not apply to amendments to contracts that have been filed in accordance with the requirements of this section unless the amendment adds new parties or affiliates;
(10) A certification of shipper status;
(11) A description of the shipment records which will be maintained to support the service contract and the address, telephone number, and title of the person who will respond to a request by making shipment records available to the Commission for inspection under § 530.15 of this part; and
(12) All other provisions of the contract.
(c) Certainty of terms. The terms described in paragraph (b) of this section may not:
(1) Be uncertain, vague or ambiguous; or
(2) Make reference to terms not explicitly contained in the service contract itself unless those terms are readily available to the parties and the Commission.
(3) Pursuant to § 530.15(c), the carrier party to the service contract must, upon written request by the Commission, provide the Commission with the associated records of the referenced terms. For the purpose of paragraph (c)(2) of this section, the referenced terms will be deemed readily available to the Commission if the carrier party to the service contract provides the Commission with the associated records of the terms within thirty (30) days of the Commission’s written request.
(d) Other requirements. Every service contract filed with BTA shall include, as set forth in appendix A to this part:
(1) A unique service contract number of more than one (1) but less than ten (10) alphanumeric characters in length (“SC Number”); and
(2) A consecutively numbered amendment number no more than three digits in length, with initial service contracts using “0”(“Amendment number”);
(3) The filed FMC Agreement Number(s) assigned by the Commission under 46 CFR part 535 (if applicable); and
(e) Exception in case of malfunction of Commission filing system. In the event that the Commission’s filing systems are not functioning and cannot receive service contract filings for twenty-four (24) continuous hours or more, an original service contract or amendment that must be filed during that period in accordance with paragraph (a)(1) of this section will be considered timely filed so long as the service contract or amendment is filed no later than twenty-four (24) hours after the Commission’s filing systems return to service.
§ 530.9 Notices.
Within thirty (30) days of the occurrence of any event listed below, there shall be filed with the Commission, pursuant to the same procedures as those followed for the filing of an amendment pursuant to § 530.10 and appendix A to this part, a detailed notice of:
(a) Correction (clerical or administrative errors);
(b) Cancellation (as defined in § 530.10(a)(3));
(c) Adjustment of accounts, by re-rating, liquidated damages, or otherwise;
(d) Final settlement of any account adjusted as described in paragraph (c) of this section; and
(e) Any change to:
(1) The name of a basic contract party; or
(2) The list of affiliates under § 530.8(b)(9), including changes to legal names and business addresses, of any contract party entitled to receive or authorized to offer services under the contract.
§ 530.10 Amendment, correction, cancellation, and electronic transmission errors.
(a) Terms. When used in this section, the following terms will have these meanings:
(1) Amendment means any change to a service contract which has prospective effect and which is mutually agreed upon by the service contract parties.
(2) Correction means any change to a service contract which has retroactive effect.
(3) Cancellation means an event which is unanticipated by the service contract, in liquidated damages or otherwise, and is due to the failure of the shipper party to tender minimum cargo as set forth in the contract, unless such tender was made impossible by an action of the carrier party.
(b) Amendment. Service contracts may be amended by mutual agreement of the parties to the contract. Amendments shall be filed electronically with the Commission in the manner set forth in § 530.8 and appendix A to this part.
(1) Where feasible, service contracts should be amended by amending only the affected specific term(s) or subterms.
(2) Each time any part of a service contract is amended, the filer shall assign a consecutive amendment number (up to three digits), beginning with the number “1.”
(3) Each time any part of the service contract is amended, the “Filing Date” will be the date of filing of the amendment.
(c) Corrections. Requests shall be filed, in duplicate, with the Commission’s Office of the Secretary within one-hundred eighty (180) days of the contract’s filing with the Commission, accompanied by remittance of a $97 service fee, and must include:
(1) A letter of transmittal explaining the purpose of the submission, and providing specific information to identify the initial or amended service contract to be corrected;
(2) A paper copy of the proposed correct terms. Corrections shall be indicated as follows:
(i) Matter being deleted shall be struck through; and
(ii) Matter to be added shall immediately follow the language being deleted and be underscored;
(3) An affidavit from the filing party attesting with specificity to the factual circumstances surrounding the clerical or administrative error, with reference to any supporting documentation;
(4) Documents supporting the clerical or administrative error; and
(5) A brief statement from the other party to the contract concurring in the request for correction.
(6) If the request for correction is granted, the carrier, agreement or conference shall file the corrected contract provisions using a special case number as described in appendix A to this part.
(d) Electronic transmission errors. An authorized person who experiences a purely technical electronic transmission error or a data conversion error in transmitting a service contract filing or amendment thereto is permitted to file a Corrected Transmission (“CT”) of that filing within 30 days of the date and time of receipt recorded in SERVCON. This time-limited permission to correct an initial defective service contract filing is not to be used to make changes in the original service contract rates, terms or conditions that are otherwise provided for in paragraphs 530.10(b) and (c) of this section. The CT tab box in SERVCON must be checked at the time of resubmitting a previously filed service contract, and a description of the corrections made must be stated at the beginning of the corrected service contract in a comment box. Failure to check the CT box and enter a description of the correction will result in the rejection of a file with the same name, since documents with duplicate file names or service contract and amendment numbers are not accepted by SERVCON.
(e) Cancellation. (1) An account may be adjusted for events and damages covered by the service contract. This shall include adjustment necessitated by either liability for liquidated damages appearing in the service contract as filed with the Commission under § 530.8(b)(7), or the occurrence of an event described below in paragraph (d)(2) of this section.
(2) In the event of cancellation as defined in § 530.10(a)(3):
(i) Further or continued implementation of the service contract is prohibited; and
(ii) The cargo previously carried under the contract shall be re-rated according to the otherwise applicable tariff provisions.
§ 530.11 [Reserved]
Subpart C – Publication of Service Contract Rules and Notices
§ 530.12 Rules and notices.
(a) Location – (1) Generally. A statement of service contract rules and notices may be published as a separate part of the individual ocean common carrier’s automated tariff system.
(2) Multi-party service contracts. For service contracts in which more than one carrier participates or is eligible to participate, a statement of service contract rules and notices may be published:
(i) If the service contract is entered into under the authority of a conference agreement, then in that conference’s automated tariff system;
(ii) If the service contract is entered into under the authority of a non-conference agreement, then in each of the participating or eligible-to-participate carriers’ individual automated tariff systems, clearly indicating the relevant FMC-assigned agreement number.
(b) Certainty of terms. A statement of service contract rules and notices described in paragraph (a) of this section may not:
(1) Be uncertain, vague, or ambiguous; or
(2) Make reference to terms not explicitly detailed in the statement of service contract rules and notices, unless those terms are contained in a publication widely available to the public and well known within the industry.
(c) Agents. Common carriers, conferences, or agreements may use agents to meet their publication requirements under this part.
(d) Commission listing. The Commission will publish on its website, www.fmc.gov, a listing of the locations of all service contract rules and notices.
Subpart D – Exceptions and Implementation
§ 530.13 Exceptions and exemptions.
(a) Statutory exceptions. Service contracts for the movement of the following, as defined in section 3 of the Act (46 U.S.C. 40102), § 530.3 or § 520.2 of this chapter, are excepted by section 8(c) of the Act (46 U.S.C. 40502) from the requirements of that section, and are therefore not subject to the requirements of this part:
(1) Bulk cargo;
(2) Forest products;
(3) Recycled metal scrap;
(4) New assembled motor vehicles; and
(5) Waste paper or paper waste.
(b) Commission exemptions. Exemptions from the requirements of this part are governed by 46 U.S.C. 40103(a) and §§ 502.10 and 502.92 of this chapter. The following commodities and/or services are exempt from the requirements of this part:
(1) Mail in foreign commerce. Transportation of mail between the United States and foreign countries.
(2) Department of Defense cargo. Transportation of U.S. Department of Defense cargo moving in foreign commerce under terms and conditions negotiated and approved by the Surface Deployment and Distribution Command and published in a universal service contract. An exact copy of the universal service contract, including any amendments thereto, shall be filed with the Commission as soon as it becomes available.
(c) Inclusion of excepted or exempted matter. (1) The Commission will not accept for filing service contracts which exclusively concern the commodities or services listed in paragraph (a) or (b) of this section.
(2) Service contracts filed with the Commission may include the commodities or services listed in paragraph (a) or (b) of this section only if:
(i) There is a tariff of general applicability for the transportation, which contains a specific commodity rate for the commodity or service in question; or
(ii) The service contract itself sets forth a rate or charge which will be applied if the contract is canceled, as defined in § 530.10(a)(3).
(d) Waiver. Upon filing a service contract pursuant to paragraph (c) of this section, the service contract shall be subject to the same requirements as those for service contracts generally.
(e) Essential terms publication exemption. Ocean common carriers are exempt from the requirement in 46 U.S.C. 40502(d) to publish and make available to the general public in tariff format a concise statement of certain essential terms when a service contract is filed with the Commission.
§ 530.14 Implementation.
(a) Generally. Performance under an original service contract or amendment may not begin until the effective date. An original service contract or amendment may apply only to cargo received on or after the effective date by the ocean common carrier or its agent, including originating carriers in the case of through transportation.
(b) Prohibition or suspension. When the filing parties receive notice that an initial or amended service contract has been prohibited under section 9(d) (46 U.S.C. 40704) or suspended under section 11 of the Act (46 U.S.C. 41301-41302, 41305-41307(a)):
(1) Further or continued implementation of the service contract is prohibited;
(2) All services performed under the contract shall be re-rated in accordance with the otherwise applicable tariff provisions for such services with notice to the shipper within five (5) days of the date of prohibition or suspension; and
(3) Detailed notice shall be given to the Commission under § 530.9 within thirty (30) days of:
(i) The re-rating or other account adjustment resulting from prohibition or suspension under paragraph (b)(2) of this section; or
(ii) Final settlement of the account adjusted under § 530.10.
(c) Agreements. If the prohibited or suspended service contract was that of an agreement with no common tariff, the re-rating shall be in accordance with the published tariff rates of the carrier which transported the cargo in effect at the time.
Subpart E – Recordkeeping and Audit
§ 530.15 Recordkeeping and audit.
(a) Records retention for five years. Every common carrier, conference or agreement shall maintain original signed service contracts, amendments, and their associated records in an organized, readily accessible or retrievable manner for a period of five (5) years from the termination of each contract.
(b) (paragraph (b) is stayed until further notice.) Where maintained. (1) Service contract records shall be maintained in the United States, except that service contract records may be maintained outside the United States if the Chairman or Secretary of an agreement or President or Chief Executive Officer of the carrier certifies annually by January 1, on a form to be supplied by the Commission, that service contract records will be made available as provided in paragraph (c) of this section.
(2) Penalty. If service contract records are not made available to the Commission as provided in paragraph (c) of this section, the Commission may cancel any carrier’s or agreement’s right to maintain records outside the United States pursuant to the certification procedure of paragraph (b) of this section.
(c) Production for audit within 30 days of request. Every carrier or agreement shall, upon written request of the FMC’s Director, Bureau of Enforcement, any Area Representative or the Director, Bureau of Trade Analysis, submit copies of requested original service contracts or their associated records within thirty (30) days of the date of the request.
(d) Agreement service contracts. In the case of service contracts made by agreements, the penalties for a failure to maintain records pursuant to this section shall attach jointly and severally on all of the agreement members participating in the service contract in question.
§ 530.91 OMB control numbers assigned pursuant to the Paperwork Reduction Act.
The Commission has received OMB approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. In accordance with that Act, agencies are required to display a currently valid control number. The valid control number for this collection of information is 3072-0065.
Appendix A to Part 530 – Instructions for the Filing of Service Contracts
Service contracts shall be filed in accordance with the instructions found on the Commission’s home page, http://www.fmc.gov.
To register for filing, a carrier, conference, agreement or publisher must submit the Service Contract Registration Form (Form FMC-83) to BTA. A separate Service Contract Registration Form is required for each individual that will file service contracts. BTA will direct OIT to provide approved filers with a log-on ID and password. Filers who wish a third party (publisher) to file their service contracts must so indicate on Form FMC-83. Authority for organizational filing can be transferred by submitting an amended registration form requesting the assignment of a new log-on ID and password. The original log-on ID will be canceled when a replacement log-on ID is issued. Log-on IDs and passwords may not be shared with, loaned to or used by any individual other than the individual registrant. The Commission reserves the right to disable any log-on ID that is shared with, loaned to or used by parties other than the registrant.
After receiving a log-on ID and a password, a filer may log-on to the service contract filing area on the Commission’s home page and file service contracts. The filing screen will request such information as: filer name, Registered Persons Index (“RPI”) number and carrier RPI number (if different); Service Contract and amendment number; and effective date. The filer will attach the entire service contract file and submit it into the system. When the service contract has been submitted for filing, the system will assign a filing date and an FMC control number, both of which will be included in the acknowledgment/confirmation message.
Exhibit 1 to Part 530 – Service Contract Registration [Form FMC-83]
Line 1. Registration. Indicate whether this is the initial (first time) registration or an amendment to an existing Service Contract Registration.
Line 2. Registrant. This must be the full legal name of the firm or individual registering for the FMC’s Service Contract Filing System and any trade names. The registrant name should match the corporate charter or business license, conference membership, etc. It should be noted that the registrant name cannot be changed by the registrant after the registration without submission of an amended registration fee.
Line 3. Address of Home Office. The complete street address should be shown in addition to the post office box. Also, provide the registrant’s Federal Taxpayer Identification Number (“TIN” Number).
Line 4. Billing Address if Different. This should be completed if the billing address differs from the home office address. Show the firm name (if different from the registrant), street address and post office box (if applicable).
Line 5. Organization Number. Complete if known. (Regulated Persons Index or “RPI” number.)
Line 6. Registrant Type. Indicate the type of organization. A registrant cannot be more than one type. This data cannot be changed by the registrant after registration without submission of an amended registration form.
Line 7. Permissions Requested and Person Granted These Permissions. Delegation of the authority to file should be noted here.
Maintenance of Organization Record – The person listed in line 8 is authorized to access the organization maintenance functions (i.e., modify organization information, assign publishers, affiliations, and d/b/as).
Service Contract Filing – The person listed in line 8 is authorized only to submit filings.
Line 8. Certified for Batch Filing. Indicate whether the registrant was registered with software certified to perform batch filings prior to May 1, 1999. Otherwise, the registrant must first be certified for batch filing as outlined in 46 CFR part 530. After certification, the registrant can submit an amended registration form to request permission for a person in their organization to perform the batch filing. If the person already has an existing log-on, the log-on (not the password) should be listed on the registration form. Also, the certification date received from the FMC should be listed on the registration form.
PART 531 – NVOCC SERVICE ARRANGEMENTS
Subpart A – General Provisions
§ 531.1 Purpose.
The purpose of this part is to facilitate NVOCC Service Arrangements (“NSAs”) as they are exempt from the otherwise applicable provisions of the Shipping Act of 1984 (“the Act”).
§ 531.2 Scope and applicability.
Only individual NVOCCs compliant with the requirements of section 19 of the Act (46 U.S.C. 40901-40904) and the Commission’s regulations at 46 CFR part 515 may enter into an NSA with one or more NSA shippers subject to the requirements of these rules. Any NVOCC who has failed to maintain its bond or license or had its tariff suspended or cancelled by the Commission is ineligible to offer and file NSAs.
§ 531.3 Definitions.
When used in this part:
(a) Act means the Shipping Act of 1984 as amended by the Ocean Shipping Reform Act of 1998;
(b) Affiliate means two or more entities which are under common ownership or control by reason of being parent and subsidiary or entities associated with, under common control with, or otherwise related to each other through common stock ownership or common directors or officers.
(c) Amendment means any change to an NSA which has prospective effect and which is mutually agreed upon by all parties to the NSA.
(d) Commission or FMC means the Federal Maritime Commission.
(e) Common carrier means a person holding itself out to the general public to provide transportation by water of passengers or cargo between the United States and a foreign country for compensation that:
(1) Assumes responsibility for the transportation from the port or point of receipt to the port or point of destination; and
(2) Utilizes, for all or part of that transportation, a vessel operating on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, or chemical parcel tanker, or by a vessel when primarily engaged in the carriage of perishable agricultural commodities:
(i) If the common carrier and the owner of those commodities are wholly owned, directly or indirectly, by a person primarily engaged in the marketing and distribution of those commodities and
(ii) Only with respect to those commodities.
(f) Effective date means the date upon which an NSA or amendment is scheduled to go into effect by the parties to the NSA. An NSA or amendment becomes effective at 12:01 a.m. Eastern Standard Time on the beginning of the effective date. The effective date cannot be prior to the date of the NSA or amendment.
(g) Expiration date means the last day after which the entire NSA is no longer in effect.
(h) NSA shipper means a cargo owner, the person for whose account the ocean transportation is provided, the person to whom delivery is to be made, a shippers’ association, or an ocean transportation intermediary, as defined in section 3(17)(B) of the Act (46 U.S.C. 40102(16)), that accepts responsibility for payment of all applicable charges under the NSA.
(i) NVOCC Service Arrangement (“NSA”) means a written contract, other than a bill of lading or receipt, between one or more NSA shippers and an individual NVOCC or two or more affiliated NVOCCs, in which the NSA shipper makes a commitment to provide a certain minimum quantity or portion of its cargo or freight revenue over a fixed time period, and the NVOCC commits to a certain rate or rate schedule and a defined service level. The NSA may also specify provisions in the event of nonperformance on the part of any party.
(j) Rules tariff means a tariff or the portion of a tariff, as defined by 46 CFR 520.2, containing the terms and conditions governing the charges, classifications, rules, regulations and practices of an NVOCC, but does not include a rate.
§ 531.4 NVOCC rules tariff.
(a) Before entering into NSAs under this part, an NVOCC must provide electronic access to its rules tariffs to the public free of charge.
(b) An NVOCC wishing to invoke an exemption pursuant to this part must indicate that intention to the Commission and the public by a prominent notice in its rules tariff.
§ 531.5 [Reserved]
Subpart B – Requirements
§ 531.6 NVOCC Service Arrangements.
(a) Every NSA shall include the complete terms of the NSA including, but not limited to, the following:
(1) The origin port ranges in the case of port-to-port movements and geographic areas in the case of through intermodal movements;
(2) The destination port ranges in the case of port-to-port movements and geographic areas in the case of through intermodal movements;
(3) The commodity or commodities involved;
(4) The minimum volume or portion;
(5) The service commitments;
(6) The line-haul rate;
(7) Liquidated damages for non-performance (if any);
(8) Duration, including the
(i) Effective date; and
(ii) Expiration date;
(9) The legal names and business addresses of the NSA parties; the legal names of all affiliates of the NSA shipper entitled to access the NSA; the names, titles and addresses of the representatives signing the NSA for the parties, except that in the case of an NSA entered into by a shippers’ association, individual members need not be named unless the contract includes or excludes specific members; and the date upon which the NSA was signed. Subsequent references in the NSA to the signatory parties shall be consistent with the first reference. An NVOCC party which enters into an NSA that includes affiliates must either:
(i) list the affiliates’ business addresses; or
(ii) certify that this information will be provided to the Commission upon request within ten (10) business days of such request.
(10) A description of the shipment records which will be maintained to support the NSA and the address, telephone number, and title of the person who will respond to a request by making shipment records available to the Commission for inspection under § 531.12 of this part; and
(11) All other provisions of the NSA.
(b) Certainty of terms. The terms described in paragraph (b) of this section may not:
(1) Be uncertain, vague or ambiguous; or
(2) Make reference to terms not explicitly contained in the NSA itself unless those terms are readily available to the parties and the Commission. Reference may not be made to a tariff of a common carrier other than the NVOCC acting as carrier party to the NSA.
(3) Pursuant to § 531.12(b), the carrier party to the NSA must, upon written request by the Commission, provide the Commission with the associated records of the referenced terms. For the purpose of paragraph (c)(2) of this section, the referenced terms will be deemed readily available to the Commission if the carrier party to the NSA provides the Commission with the associated records of the terms within thirty (30) days of the Commission’s written request.
(c) Other requirements. (1) For service pursuant to an NSA, no NVOCC may, either alone or in conjunction with any other person, directly or indirectly, provide service in the liner trade that is not in accordance with the rates, charges, classifications, rules and practices contained in an NSA.
(2) For service pursuant to an NSA, no NVOCC, may, either alone or in conjunction with any other person, directly or indirectly, engage in any unfair or unjustly discriminatory practice in the matter of rates or charges with respect to any port; and
(3) For service under an NSA, no NVOCC may, either alone or in conjunction with any other person, directly or indirectly, give any undue or unreasonable preference or advantage or impose any undue or unreasonable prejudice or disadvantage with respect to any port.
(4) No NVOCC may knowingly and willfully enter into an NSA with an ocean transportation intermediary that does not have a tariff and a bond, insurance, or other surety as required by sections 8 (46 U.S.C. 40501-40503) and 19 (46 U.S.C. 40901-40904) of the Act.
(5) Except for the carrier party’s rules tariff, the requirement in 46 U.S.C. 40501(a)-(c) that the NVOCC include its rates in a tariff open to public inspection in an automated tariff system and the Commission’s corresponding regulations at 46 CFR part 520 shall not apply.
(d) Format requirements. Every NSA shall include:
(1) A unique NSA number of more than one (1) but less than ten (10) alphanumeric characters in length (“NSA Number”); and
(2) A consecutively numbered amendment number no more than three digits in length, with initial NSAs using “0” (“Amendment number”).
§ 531.7 [Reserved]
§ 531.8 Amendment.
(a) NSAs may be amended by mutual agreement of the parties.
(b) Where feasible, NSAs should be amended by amending only the affected specific term(s) or subterms.
(c) Each time any part of an NSA is amended, a consecutive amendment number (up to three digits), beginning with the number “1” shall be assigned.
(d) Each time any part of an NSA is amended, the “Effective Date” will be the date of the amendment or a future date agreed to by the parties.
Subpart C [Reserved]
Subpart D – Exceptions and Implementation
§ 531.10 Excepted and exempted commodities.
(a) Statutory exceptions. NSAs for the movement of the following, as defined in section 3 of the Act (46 U.S.C. 40102) and § 530.3 or § 520.2 of this chapter, are not subject to the conditions of this exemption:
(1) Bulk cargo;
(2) Forest products;
(3) Recycled metal scrap;
(4) New assembled motor vehicles; and
(5) Waste paper or paper waste.
(b) Commission exemptions. The following commodities and/or services are not subject to the conditions of this exemption:
(1) Mail in foreign commerce. Transportation of mail between the United States and foreign countries.
(2) Department of Defense cargo. Transportation of U.S. Department of Defense cargo moving in foreign commerce under terms and conditions approved by the Military Transportation Management Command and published in a universal service contract. An exact copy of the universal service contract, including any amendments thereto, shall be filed with the Commission as soon as it becomes available.
§ 531.11 Implementation.
Generally. Performance under an NSA or amendment thereto may not begin before the day it is effective.
Subpart E – Recordkeeping and Audit
§ 531.12 Recordkeeping and audit.
(a) Records retention for five years. Every NVOCC shall maintain original signed NSAs, amendments, and their associated records in an organized, readily accessible or retrievable manner for a period of five (5) years from the termination of each NSA. These records must be kept in a form that is readily available and usable to the Commission; electronically maintained records shall be no less accessible than if they were maintained in paper form.
(b) Production for audit within 30 days of request. Every NVOCC shall, upon written request of the FMC’s Director, Bureau of Enforcement, any Area Representative or the Director, Bureau of Trade Analysis, submit copies of requested original NSAs or their associated records within thirty (30) days of the date of the request.
§§ 531.13-531.98 [Reserved]
§ 531.99 OMB control numbers assigned pursuant to the Paperwork Reduction Act.
The Commission has received OMB approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. In accordance with that Act, agencies are required to display a currently valid control number. The valid control number for this collection of information is 3072-0070.
PART 532 – NVOCC NEGOTIATED RATE ARRANGEMENTS
Subpart A – General Provisions
§ 532.1 Purpose.
The purpose of this part, pursuant to the Commission’s statutory authority, is to exempt non-vessel-operating common carriers (NVOCCs) from the tariff rate publication and adherence requirements of the Shipping Act of 1984, as enumerated herein.
§ 532.2 Scope and applicability.
This part exempts NVOCCs duly licensed pursuant to 46 CFR 515.3 or registered pursuant to 46 CFR 515.19, holding adequate proof of financial responsibility pursuant to 46 CFR 515.21, and meeting the requirements of 46 CFR 532.4 through 532.7, from the following requirements and prohibitions of the Shipping Act and the Commission’s regulations:
(a) The requirement in 46 U.S.C. 40501(a)-(c) that the NVOCC include its rates in a tariff open to public inspection in an automated tariff system;
(b) 46 U.S.C. 40501(d);
(c) 46 U.S.C. 40501(e)
(d) 46 U.S.C. 40503;
(e) The prohibition in 46 U.S.C. 41104(a)(2)(A);
(f) the Commission’s corresponding regulation at 46 CFR 520.3(a) that the NVOCC include its rates in a tariff open for public inspection in an automated tariff system; and
(g) the Commission’s corresponding regulations at 46 CFR 520.4(a)(4), 520.4(f), 520.6(e), 520.7(c), (d), 520.8(a), 520.12, and 520.14. Any NVOCC failing to maintain its bond or license or registration as set forth above, or who has had its tariff suspended by the Commission, shall not be eligible to invoke this exemption.
§ 532.3 Definitions.
When used in this part,
(a) “NVOCC Negotiated Rate Arrangement” or “NRA” means a written and binding arrangement between an NRA shipper and an eligible NVOCC to provide specific transportation service for a stated cargo quantity, from origin to destination, on and after receipt of the cargo by the NVOCC. For purposes of this part, “receipt of cargo by the NVOCC” includes receipt by the NVOCC’s agent, or the originating carrier in the case of through transportation.
(b) “Rate” means a price stated for providing a specified level of transportation service for a stated cargo quantity, from origin to destination, on and after a stated date or within a defined time frame.
(c) “Rules tariff” means a tariff or the portion of a tariff, as defined by 46 CFR 520.2, containing the terms and conditions governing the charges, classifications, rules, regulations and practices of an NVOCC, but does not include a rate.
(d) “NRA shipper” means a cargo owner, the person for whose account the ocean transportation is provided, the person to whom delivery is to be made, a shippers’ association, or an ocean transportation intermediary, as defined in section 3(17)(B) of the Act (46 U.S.C. 40102(16)), that accepts responsibility for payment of all applicable charges under the NRA.
(e) “Affiliate” means two or more entities which are under common ownership or control by reason of being parent and subsidiary or entities associated with, under common control with or otherwise related to each other through common stock ownership or common directors or officers.
Subpart B – Procedures Related to NVOCC Negotiated Rate Arrangements
§ 532.4 NVOCC rules tariff.
Before entering into NRAs under this Part, an NVOCC must provide electronic access to its rules tariffs to the public free of charge.
§ 532.5 Requirements for NVOCC negotiated rate arrangements.
In order to qualify for the exemptions to the general rate publication requirement as set forth in § 532.2, an NRA must meet the following requirements:
(a) Writing. The NRA must be in writing.
(b) Parties. The NRA must contain the names of the parties and the names of the representatives agreeing to the NRA.
(c) Agreement. The terms of the NRA must be agreed to by both NRA shipper and NVOCC, prior to receipt of cargo by the NVOCC. The shipper is considered to have agreed to the terms of the NRA if the shipper:
(1) Provides the NVOCC with a signed agreement;
(2) Sends the NVOCC a written communication, including an email, indicating acceptance of the NRA terms; or
(3) Books a shipment after receiving the NRA terms from the NVOCC, if the NVOCC incorporates in the NRA terms the following text in bold font and all uppercase letters: “THE SHIPPER’S BOOKING OF CARGO AFTER RECEIVING THE TERMS OF THIS NRA OR NRA AMENDMENT CONSTITUTES ACCEPTANCE OF THE RATES AND TERMS OF THIS NRA OR NRA AMENDMENT.”
(d) Rates and terms – (1) General. The NRA must clearly specify the rate and terms, as well as the shipment or shipments to which such rate will apply.
(2) Surcharges, assessorial charges, and GRIs. (i) If the rate is not an “all-in rate,” the NRA must specify whether additional surcharges, additional assessorial charges, or ocean common carrier general rate increases (“GRIs”) will apply.
(ii) The NRA may list the additional surcharges or assessorial charges, including pass-through charges, or reference specific surcharges or assessorial charges in the NVOCC’s rules tariff.
(iii) If the additional surcharges or assessorial charges are included in the NVOCC’s rules tariff, those additional surcharges or assessorial charges and the corresponding amounts specified in the rules tariff must be fixed once the first shipment has been received by the NVOCC until the last shipment is delivered, subject to an amendment of the NRA.
(iv) For any pass-through charge for which a specific amount is not included in the NRA or the rules tariff, the NVOCC may only invoice the shipper for charges the NVOCC incurs, with no markup.
(3) Non-rate economic terms. The NRA may include non-rate economic terms.
(e) Amendment. The NRA may be amended after the time the initial shipment is received by the NVOCC, but such changes may only apply prospectively to shipments not yet received by the NVOCC.
§ 532.6 Notices.
An NVOCC wishing to invoke an exemption pursuant to this part must indicate that intention to the Commission and the public by a prominent notice in its rules tariff.
Subpart C – Recordkeeping
§ 532.7 Recordkeeping and audit.
(a) An NVOCC invoking an exemption pursuant to this part must maintain original NRAs in an organized, readily accessible or retrievable manner for 5 years from the completion date of performance of the NRA by an NVOCC, in a format easily produced to the Commission.
(b) NRAs are subject to inspection and reproduction requests by the Commission. An NVOCC shall produce the requested NRAs promptly in response to a Commission request. All records produced must be in English or be accompanied by a certified English translation.
(c) Failure to keep or timely produce original NRAs will disqualify an NVOCC from the operation of the exemption provided pursuant to this part, regardless of whether it has been invoked by notice as set forth above, and may result in a Commission finding of a violation of 46 U.S.C. 41104(a)(1), 41104(a)(2)(A) or other acts prohibited by the Shipping Act.
§ 532.91 OMB control number issued pursuant to the Paperwork Reduction Act.
The Commission has received OMB approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. In accordance with that Act, agencies are required to display a currently valid control number. The valid control number for this collection of information is 3072-0071.
PART 535 – OCEAN COMMON CARRIER AND MARINE TERMINAL OPERATOR AGREEMENTS SUBJECT TO THE SHIPPING ACT OF 1984
Subpart A – General Provisions
§ 535.101 Authority.
The rules in this part are issued pursuant to the authority of section 4 of the Administrative Procedure Act (5 U.S.C. 553), sections 2, 3, 4, 5, 6, 7, 8, 10, 11, 13, 15, 16, 17, and 19 of the Shipping Act of 1984 (“the Act”) (46 U.S.C. 305, 40101-40104, 40301-40307, 40501-40503, 40901-40904, 41101-41109, 41301-41302, and 41305-41307), and the Ocean Shipping Reform Act of 1998, Pub. L. 105-258, 112 Stat. 1902.
§ 535.102 Purpose.
This part implements those provisions of the Act that govern agreements by or among ocean common carriers and agreements among marine terminal operators and among one or more marine terminal operators and one or more ocean common carriers. This part also sets forth more specifically certain procedures provided for in the Act.
§ 535.103 Policies.
(a) The Act requires that agreements be processed and reviewed, upon their initial filing, according to strict statutory deadlines. This part is intended to establish procedures for the orderly and expeditious review of filed agreements in accordance with the statutory requirements.
(b) The Act requires that agreements be reviewed, upon their initial filing, to ensure compliance with all applicable provisions of the Act and empowers the Commission to obtain information to conduct that review. This part identifies those types of agreements that must be accompanied by information submissions when they are first filed, and sets forth the kind of information for certain agreements that the Commission believes relevant to that review. Only information that is relevant to such a review is requested. It is the policy of the Commission to keep the costs of regulation to a minimum and at the same time obtain information needed to fulfill its statutory responsibility.
(c) To further the goal of expedited processing and review of agreements upon their initial filing, agreements are required to meet certain minimum requirements as to form. These requirements are intended to ensure expedited review and should assist parties in preparing agreements. These requirements as to form do not affect the substance of an agreement and are intended to allow parties the freedom to develop innovative commercial relationships and provide efficient and economic transportation systems.
(d) The Act itself excludes certain agreements from the filing requirements and authorizes the Commission to exempt other classes of agreements from any requirement of the Act or this part. To minimize delay in the implementation of routine agreements and to avoid the private and public cost of unnecessary regulation, certain classes of agreements are exempt from the filing requirements of this part.
(e) Under the regulatory framework established by the Act, the role of the Commission as a monitoring agency has been enhanced. The Act favors greater freedom in allowing parties to form their commercial arrangements. This, however, requires greater monitoring of agreements after they have become effective to assure their continued compliance with all applicable provisions of the Act. The Act empowers the Commission to impose certain recordkeeping and reporting requirements. This part identifies those agreements that require specific record retention and reporting to the Commission and prescribes the applicable period of record retention, the form and content of such reporting, and the applicable time periods for filing with the Commission. Only information that is necessary to assure that the Commission’s monitoring responsibilities will be fulfilled is requested.
(f) The Act requires that conference agreements contain certain mandatory provisions. Each conference agreement must:
(1) State its purpose;
(2) Provide reasonable and equal terms and conditions for admission and readmission to membership;
(3) Allow for withdrawal from membership upon reasonable notice without penalty;
(4) Require an independent neutral body to police the conference, if requested by a member;
(5) Prohibit conduct specified in sections 10(c)(1) or 10(c)(3) of the Act (46 U.S.C. 41105(1) or 41105(3));
(6) Provide for a consultation process;
(7) Establish procedures for considering shippers’ requests and complaints; and
(8) Provide for independent action.
(g) To promote competitive and efficient transportation and a greater reliance on the marketplace, the Act places limits on carriers’ agreements regarding service contracts. Carriers may not enter into an agreement to prohibit or restrict members from engaging in contract negotiations, may not require members to disclose service contract negotiations or terms and conditions (other than those required to be published), and may not adopt mandatory rules or requirements affecting the right of an agreement member or agreement members to negotiate and enter into contracts. However, agreement members may adopt voluntary guidelines covering the terms and procedures of members’ contracts.
§ 535.104 Definitions.
When used in this part:
(a) Agreement means an understanding, arrangement, or association, written or oral (including any modification, cancellation or appendix) entered into by or among ocean common carriers and/or marine terminal operators, but does not include a maritime labor agreement.
(b) Antitrust laws means the Act of July 2, 1890 (ch. 647, 26 Stat. 209), 15 U.S.C. 1, as amended; the Act of October 15, 1914 (ch. 323, 38 Stat. 730), 15 U.S.C. 12, as amended; the Federal Trade Commission Act (38 Stat. 717), 15 U.S.C. 41, as amended; sections 73 and 74 of the Act of August 27, 1894 (28 Stat. 570), 15 U.S.C. 8, 9, as amended; the Act of June 19, 1936 (ch. 592, 49 Stat. 1526), 15 U.S.C. 13, as amended; the Antitrust Civil Process Act (76 Stat. 548), 15 U.S.C. 1311, note as amended; and amendments and Acts supplementary thereto.
(c) Appendix means a document containing additional material of limited application and appended to an agreement, distinctly differentiated from the main body of the basic agreement.
(d) Assessment agreement means an agreement, whether part of a collective bargaining agreement or negotiated separately, that provides for collectively bargained fringe benefit obligations on other than a uniform man-hour basis regardless of the cargo handled or type of vessel or equipment utilized.
(e) Capacity rationalization means a concerted reduction, stabilization, withholding, or other limitation in any manner whatsoever by ocean common carriers on the size or number of vessels or available space offered collectively or individually to shippers in any trade or service.
(f) Common carrier means a person holding itself out to the general public to provide transportation by water of passengers or cargo between the United States and a foreign country for compensation that:
(1) Assumes responsibility for the transportation from the port or point of receipt to the port or point of destination; and
(2) Utilizes, for all or part of that transportation, a vessel operating on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, or chemical parcel tanker, or by a vessel when primarily engaged in the carriage of perishable agricultural commodities:
(i) If the common carrier and the owner of those commodities are wholly owned, directly or indirectly, by a person primarily engaged in the marketing and distribution of those commodities; and
(ii) Only with respect to those commodities.
(g) Conference agreement means an agreement between or among two or more ocean common carriers that provides for the fixing of and adherence to uniform tariff rates, charges, practices, and conditions of service relating to the receipt, carriage, handling and/or delivery of passengers or cargo for all members. The term does not include joint service, pooling, sailing, space charter, or transshipment agreements.
(h) Consultation means a process whereby a conference and a shipper confer for the purpose of promoting the commercial resolution of disputes and/or the prevention and elimination of the occurrence of malpractices.
(i) Cooperative working agreement means an agreement that establishes exclusive, preferential, or cooperative working relationships that are subject to the Act, but that do not fall precisely within the parameters of any specifically defined agreement.
(j) Effective agreement means an agreement effective under the Act.
(k) Equal access agreement means an agreement between ocean common carriers of different nationalities, as determined by the incorporation or domicile of the carriers’ operating companies, whereby such ocean common carriers associate for the purpose of gaining reciprocal access to cargo that is otherwise reserved by national decree, legislation, statute or regulation to carriage by the merchant marine of the carriers’ respective nations.
(l) Independent neutral body means a disinterested third party, authorized by a conference and its members to review, examine, and investigate alleged breaches or violations of the conference agreement and/or the conference’s properly promulgated tariffs, rules, or regulations by any member of the conference.
(m) Information Form means the form containing economic information that must accompany the filing of certain agreements and modifications.
(n) Interconference agreement means an agreement between conferences.
(o)(1) Joint service agreement means an agreement between ocean common carriers operating as a joint venture whereby a separate service is established that:
(i) Holds itself out in its own distinct operating name;
(ii) Independently fixes its own rates, charges, practices, and conditions of service or chooses to participate under its operating name in another agreement that is duly authorized to determine and implement such activities;
(iii) Independently publishes its own tariff or chooses to participate under its operating name in an otherwise established tariff;
(iv) Issues its own bills of lading; and
(v) Acts generally as a single carrier.
(2) The common use of facilities in a joint service may occur, and there is no competition between members for cargo in the agreement trade; but they otherwise maintain their separate identities.
(p) Marine terminal facilities means one or more structures (and services connected therewith) comprising a terminal unit, including, but not limited to docks, berths, piers, aprons, wharves, warehouses, covered and/or open storage space, cold storage plants, grain elevators and/or bulk cargo loading and/or unloading structures, landings, and receiving stations, used for the transmission, care and convenience of cargo and/or passengers or the interchange of same between land and ocean common carriers or between two ocean common carriers. This term is not limited to waterfront or port facilities and includes so-called off-dock container freight stations at inland locations and any other facility from which inbound waterborne cargo may be tendered to the consignee or outbound cargo may be received from shippers for vessel or container loading.
(q) Marine terminal operator means a person engaged in the United States in the business of furnishing wharfage, dock, warehouse, or other terminal facilities in connection with a common carrier, or in connection with a common carrier and a water carrier subject to subchapter II of chapter 135 of title 49 U.S.C. This term does not include shippers or consignees who exclusively furnish marine terminal facilities or services in connection with tendering or receiving proprietary cargo from a common carrier or water carrier.
(r) Maritime labor agreement means a collective-bargaining agreement between an employer subject to the Act or group of such employers, and a labor organization representing employees in the maritime or stevedoring industry, or an agreement preparatory to such a collective-bargaining agreement among members of a multi-employer bargaining group, or an agreement specifically implementing provisions of such a collective-bargaining agreement or providing for the formation, financing or administration of a multi-employer bargaining group; but the term does not include an assessment agreement.
(s) Modification means any change, alteration, correction, addition, deletion, or revision of an existing effective agreement or to any appendix to such an agreement.
(t) Monitoring Report means the report containing economic information that must be filed at defined intervals with regard to certain agreements that are effective under the Act.
(u) Ocean common carrier means a common carrier that operates, for all or part of its common carrier service, a vessel on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, or chemical parcel-tanker.
(v) Ocean freight forwarder means a person in the United States that dispatches shipments from the United States via common carriers and books or otherwise arranges space for those shipments on behalf of shippers; and processes the documentation or performs related activities incident to those shipments.
(w) Person means individuals, corporations, partnerships and associations existing under or authorized by the laws of the United States or of a foreign country.
(x) Pooling agreement means an agreement between ocean common carriers that provides for the division of cargo carryings, earnings, or revenue and/or losses between the members in accordance with an established formula or scheme.
(y) Port means the place at which an ocean common carrier originates or terminates (and/or transships) its actual ocean carriage of cargo or passengers as to any particular transportation movement.
(z) Rate, for purposes of this part, includes both the basic price paid by a shipper to an ocean common carrier for a specified level of transportation service for a stated quantity of a particular commodity, from origin to destination, on or after a stated effective date or within a defined time frame, and also any accessorial charges or allowances that increase or decrease the total transportation cost to the shipper.
(aa) Rate agreement means an agreement between ocean common carriers that authorizes the discussion of or agreement on, either on a binding basis under a common tariff or on a non-binding basis, any kind of rate or charge.
(bb) Sailing agreement means an agreement between ocean common carriers to provide service by establishing a schedule of ports that each carrier will serve, the frequency of each carrier’s calls at those ports, and/or the size and capacity of the vessels to be deployed by the parties. The term does not include joint service agreements, or capacity rationalization agreements.
(cc) Service contract means a written contract, other than a bill of lading or a receipt, between one or more shippers and an individual ocean common carrier or an agreement between or among ocean common carriers in which the shipper or shippers makes a commitment to provide a certain volume or portion of cargo over a fixed time period, and the ocean common carrier or the agreement commits to a certain rate or rate schedule and a defined service level, such as assured space, transit time, port rotation, or similar service features. The contract may also specify provisions in the event of nonperformance on the part of any party.
(dd) Shipper means:
(1) A cargo owner;
(2) The person for whose account the ocean transportation is provided;
(3) The person to whom delivery is to be made;
(4) A shippers’ association; or
(5) A non-vessel-operating common carrier (i.e., a common carrier that does not operate the vessels by which the ocean transportation is provided and is a shipper in its relationship with an ocean common carrier) that accepts responsibility for payment of all charges applicable under the tariff or service contract.
(ee) Shippers’ association means a group of shippers that consolidates or distributes freight on a nonprofit basis for the members of the group in order to secure carload, truckload, or other volume rates or service contracts.
(ff) Shippers’ requests and complaints means a communication from a shipper to a conference requesting a change in tariff rates, rules, regulations, or service; protesting or objecting to existing rates, rules, regulations or service; objecting to rate increases or other tariff changes; protesting allegedly erroneous service contract or tariff implementation or application, and/or requesting to enter into a service contract. Routine information requests are not included in the term.
(gg) Space charter agreement means an agreement between ocean common carriers whereby a carrier (or carriers) agrees to provide vessel space for use by another carrier (or carriers) in exchange for compensation or services. The arrangement may include arrangements for equipment interchange and receipt/delivery of cargo, but may not include capacity rationalization as defined in this subpart.
(hh) Sub-trade means the scope of ocean liner cargo carried between each U.S. port range and each foreign country within the scope of the agreement. U.S. port ranges are defined as follows:
(1) Atlantic and Gulf shall encompass ports along the eastern seaboard and the Gulf of Mexico from the northern boundary of Maine to Brownsville, Texas. It also includes all ports bordering on the Great Lakes and their connecting waterways, all ports in the State of New York on the St. Lawrence River, and all ports in Puerto Rico and the U.S. Virgin Islands; and
(2) Pacific shall encompass all ports in the States of Alaska, Hawaii, California, Oregon, and Washington. It also includes all ports in Guam, American Samoa, Northern Marianas, Johnston Island, Midway Island, and Wake Island.
(ii) Through transportation means continuous transportation between origin and destination for which a through rate is assessed and which is offered or performed by one or more carriers, at least one of which is an ocean common carrier, between a United States point or port and a foreign point or port.
(jj) Transshipment agreement means an agreement between an ocean common carrier serving a port or point of origin and another such carrier serving a port or point of destination, whereby cargo is transferred from one carrier to another carrier at an intermediate port served by direct vessel call of both such carriers in the conduct of through transportation and the publishing carrier performs the transportation on one leg of the through transportation on its own vessel or on a vessel on which it has rights to space under a filed and effective agreement. Such an agreement does not provide for the concerted discussion, publication or otherwise fixing of rates for the account of the cargo interests, conditions of service or other tariff matters other than the tariff description of the transshipment service offered, the port of transshipment and the participation of the nonpublishing carrier. An agreement that involves the movement of cargo in a domestic offshore trade as part of a through movement of cargo via transshipment involving the foreign commerce of the United States shall be considered to be in the foreign commerce of the United States and, therefore, subject to the Act and this part.
(kk) Vessel-operating costs means any of the following expenses incurred by an ocean common carrier: salaries and wages of officers and unlicensed crew, including relief crews and others regularly employed aboard the vessel; fringe benefits; expenses associated with consumable stores, supplies and equipment; vessel fuel and incidental costs; vessel maintenance and repair expense; hull and machinery insurance costs; protection and indemnity insurance costs; costs for other marine risk insurance not properly chargeable to hull and machinery insurance or to protection and indemnity insurance accounts; and charter hire expenses.
Subpart B – Scope
§ 535.201 Subject agreements.
(a) Ocean common carrier agreements. This part applies to agreements by or among ocean common carriers to:
(1) Discuss, fix, or regulate transportation rates, including through rates, cargo space accommodations, and other conditions of service;
(2) Pool or apportion traffic, revenues, earnings, or losses;
(3) Allot ports or restrict or otherwise regulate the number and character of sailings between ports;
(4) Limit or regulate the volume or character of cargo or passenger traffic to be carried;
(5) Engage in exclusive, preferential, or cooperative working arrangements among themselves or with one or more marine terminal operators;
(6) Control, regulate, or prevent competition in international ocean transportation; or
(7) Discuss and agree on any matter related to service contracts.
(b) Marine terminal operator agreements. This part applies to agreements among marine terminal operators and among one or more marine terminal operators and one or more ocean carriers to:
(1) Discuss, fix, or regulate rates or other conditions of service; or
(2) Engage in exclusive, preferential, or cooperative working arrangements, to the extent that such agreements involve ocean transportation in the foreign commerce of the United States.
§ 535.202 Non-subject agreements.
This part does not apply to the following agreements:
(a) Any acquisition by any person, directly or indirectly, of any voting security or assets of any other person;
(b) Any maritime labor agreement;
(c) Any agreement related to transportation to be performed within or between foreign countries;
(d) Any agreement among common carriers to establish, operate, or maintain a marine terminal in the United States; and
(e) Any agreement among marine terminal operators that exclusively and solely involves transportation in the interstate commerce of the United States.
Subpart C – Exemptions
§ 535.301 Exemption procedures.
(a) Authority. The Commission, upon application or its own motion, may by order or rule exempt for the future any class of agreement involving ocean common carriers and/or marine terminal operators from any requirement of the Act if it finds that the exemption will not result in substantial reduction in competition or be detrimental to commerce.
(b) Optional filing. Notwithstanding any exemption from filing, or other requirements of the Act and this part, any party to an exempt agreement may file such an agreement with the Commission.
(c) Application for exemption. Applications for exemptions shall conform to the general filing requirements for exemptions set forth at § 502.67 of this title.
(d) Retention of agreement by parties. Any agreement that has been exempted by the Commission pursuant to section 16 of the Act (46 U.S.C. 40103) shall be retained by the parties and shall be available upon request by the Bureau of Trade Analysis for inspection during the term of the agreement and for a period of three years after its termination.
§ 535.302 Exemptions for certain modifications of effective agreements.
(a) Non-substantive modifications to effective agreements. A non-substantive modification to an effective agreement between ocean common carriers and/or marine terminal operators, acting individually or through approved agreements, is one which:
(1) Reflects changes in the name of any geographic locality stated therein, the name of the agreement or the name of a party to the agreement, the names and/or numbers of any other section 4 agreement (46 U.S.C. 40301(a)-(c)) or designated provisions thereof referred to in an agreement;
(2) Corrects typographical and grammatical errors in the text of the agreement or renumbers or reletters articles or sub-articles of agreements and references thereto in the text; or
(3) Reflects changes in the titles of persons or committees designated therein or transfers the functions of such persons or committees to other designated persons or committees or which merely establishes a committee.
(b) Other Miscellaneous Modifications to effective agreements. A miscellaneous modification to an effective agreement is one that:
(1) Cancels the agreement or a portion thereof;
(2) Deletes an agreement party;
(3) Changes the parties to a conference agreement or a discussion agreement among passenger vessel operating common carriers that is open to all ocean common carriers operating passenger vessels of a class defined in the agreements and that does not contain ratemaking, pooling, joint service, sailing or space chartering authority; or
(4) Changes the officials of the agreement and delegations of authority.
(c) A copy of a modification described in (a) or (b) of this section shall be submitted to the Commission but is otherwise exempt from the waiting period requirement of the Act and this part.
(d) Parties to agreements may seek a determination from the Director of the Bureau of Trade Analysis as to whether a particular modification is a non-substantive or other miscellaneous modification within the meaning of this section.
(e) The filing fee for non-substantive or other miscellaneous modifications is provided in § 535.401(g).
§ 535.303 Husbanding agreements – exemption.
(a) A husbanding agreement is an agreement between an ocean common carrier and another ocean common carrier or marine terminal operator, acting as the former’s agent, under which the agent handles routine vessel operating activities in port, such as notifying port officials of vessel arrivals and departures; ordering pilots, tugs, and linehandlers; delivering mail; transmitting reports and requests from the Master to the owner/operator; dealing with passenger and crew matters; and providing similar services related to the above activities. The term does not include an agreement that provides for the solicitation or booking of cargoes, signing contracts or bills of lading and other related matters, nor does it include an agreement that prohibits the agent from entering into similar agreements with other carriers.
(b) A husbanding agreement is exempt from the filing requirements of the Act and of this part.
(c) The filing fee for optional filing of husbanding agreements is provided in § 535.401(g).
§ 535.304 Agency agreements – exemption.
(a) An agency agreement is an agreement between an ocean common carrier and another ocean common carrier or marine terminal operator, acting as the former’s agent, under which the agent solicits and books cargoes and signs contracts of affreightment and bills of lading on behalf of the ocean common carrier. Such an agreement may or may not also include husbanding service functions and other functions incidental to the performance of duties by agents, including processing of claims, maintenance of a container equipment inventory control system, collection and remittance of freight and reporting functions.
(b) An agency agreement as defined above is exempt from the filing requirements of the Act and of this part, except those:
(1) Where a common carrier is to be the agent for a competing ocean common carrier in the same trade; or
(2) That permit an agent to enter into similar agreements with more than one ocean common carrier in a trade.
(c) The filing fee for optional filing of agency agreements is provided in § 535.401(g).
§ 535.305 Equipment interchange agreements – exemption.
(a) An equipment interchange agreement is an agreement between two or more ocean common carriers for:
(1) The exchange of empty containers, chassis, empty LASH/SEABEE barges, and related equipment; and
(2) The transportation of the equipment as required, payment therefor, management of the logistics of transferring, handling and positioning equipment, its use by the receiving carrier, its repair and maintenance, damages thereto, and liability incidental to the interchange of equipment.
(b) An equipment interchange agreement is exempt from the filing requirements of the Act and of this part.
(c) The filing fee for optional filing of equipment interchange agreements is provided in § 535.401(g).
§ 535.306 Nonexclusive transshipment agreements – exemption.
(a) A nonexclusive transshipment agreement is a transshipment agreement by which one ocean common carrier serving a port of origin by direct vessel call and another such carrier serving a port of destination by direct vessel call provide transportation between such ports via an intermediate port served by direct vessel call of both such carriers and at which cargo will be transferred from one to the other and which agreement does not:
(1) Prohibit either carrier from entering into similar agreements with other carriers;
(2) Guarantee any particular volume of traffic or available capacity; or
(3) Provide for the discussion or fixing of rates for the account of the cargo interests, conditions of service or other tariff matters other than the tariff description of the service offered as being by means of transshipment, the port of transshipment and the participation of the nonpublishing carrier.
(b) A nonexclusive transshipment agreement is exempt from the filing requirements of the Act and of this part, provided that the tariff provisions set forth in paragraph (c) of this section and the content requirements of paragraph (d) of this section are met.
(c) The applicable tariff or tariffs shall provide:
(1) The through rate;
(2) The routings (origin, transshipment and destination ports); additional charges, if any (i.e. port arbitrary and/or additional transshipment charges); and participating carriers; and
(3) A tariff provision substantially as follows:
The rules, regulations, and rates in this tariff apply to all transshipment arrangements between the publishing carrier or carriers and the participating, connecting or feeder carrier. Every participating connecting or feeder carrier which is a party to transshipment arrangements has agreed to observe the rules, regulations, rates, and routings established herein as evidenced by a connecting carrier agreement between the parties.
(d) Nonexclusive transshipment agreements must contain the entire arrangement between the parties, must contain a declaration of the nonexclusive character of the arrangement and may provide for:
(1) The identification of the parties and the specification of their respective roles in the arrangement;
(2) A specification of the governed cargo;
(3) The specification of responsibility for the issuance of bills of lading (and the assumption of common carriage-associated liabilities) to the cargo interests;
(4) The specification of the origin, transshipment and destination ports;
(5) The specification of the governing tariff(s) and provision for their succession;
(6) The specification of the particulars of the nonpublishing carrier’s concurrence/participation in the tariff of the publishing carrier;
(7) The division of revenues earned as a consequence of the described carriage;
(8) The division of expenses incurred as a consequence of the described carriage;
(9) Termination and/or duration of the agreement;
(10) Intercarrier indemnification or provision for intercarrier liabilities consequential to the contemplated carriage and such documentation as may be necessary to evidence the involved obligations;
(11) The care, handling and liabilities for the interchange of such carrier equipment as may be consequential to the involved carriage;
(12) Such rationalization of services as may be necessary to ensure the cost effective performance of the contemplated carriage; and
(13) Such agency relationships as may be necessary to provide for the pickup and/or delivery of the cargo.
(e) No subject other than as listed in paragraph (d) of this section may be included in exempted nonexclusive transshipment agreements.
(f) The filing fee for optional filing of nonexclusive transshipment agreements is provided in § 535.401(g).
§ 535.307 Agreements between or among wholly-owned subsidiaries and/or their parent – exemption.
(a) An agreement between or among wholly-owned subsidiaries and/or their parent means an agreement under section 4 of the Act (46 U.S.C. 40301(a)-(c)) between or among an ocean common carrier or marine terminal operator subject to the Act and any one or more ocean common carriers or marine terminal operators which are ultimately owned 100 percent by that ocean common carrier or marine terminal operator, or an agreement between or among such wholly-owned carriers or terminal operators.
(b) All agreements between or among wholly-owned subsidiaries and/or their parent are exempt from the filing requirements of the Act and this part.
(c) Ocean common carriers are exempt from section 10(c) of the Act (46 U.S.C. 41105) to the extent that the concerted activities proscribed by that section result solely from agreements between or among wholly-owned subsidiaries and/or their parent.
(d) The filing fee for optional filing of these agreements is provided in § 535.401(g).
§ 535.309 Marine terminal services agreements – exemption.
(a) Marine terminal services agreement means an agreement, contract, understanding, arrangement, or association, written or oral, (including any modification or appendix) between a marine terminal operator and an ocean common carrier that applies to marine terminal services that are provided to and paid for by an ocean common carrier. These services include: checking, dockage, free time, handling, heavy lift, loading and unloading, terminal storage, usage, wharfage, and wharf demurrage and including any marine terminal facilities that may be provided incidentally to such marine terminal services. The term marine terminal services agreement does not include any agreement that conveys to the involved carrier any rights to operate any marine terminal facility by means of a lease, license, permit, assignment, land rental, or similar other arrangement for the use of marine terminal facilities or property.
(b) All marine terminal services agreements as defined in § 535.309(a) are exempt from the filing and waiting period requirements of the Act and this part on condition that:
(1) They do not include rates, charges, rules, and regulations that are determined through a marine terminal conference agreement. Marine terminal conference agreement means an agreement between or among two or more marine terminal operators and/or ocean common carriers for the conduct or facilitation of marine terminal operations that provides for the fixing of and adherence to uniform maritime terminal rates, charges, practices and conditions of service relating to the receipt, handling, and/or delivery of passengers or cargo for all members; and
(2) No antitrust immunity is conferred under the Act with regard to terminal services provided to an ocean common carrier under a marine terminal services agreement that is not filed with the Commission.
(c) The filing fee for optional filing of terminal services agreements is provided in § 535.401(g).
§ 535.310 Marine terminal facilities agreement – exemption.
(a) Marine terminal facilities agreement means any agreement between or among two or more marine terminal operators, or between one or more marine terminal operators and one or more ocean common carriers, to the extent that the agreement involves ocean transportation in the foreign commerce of the United States, that conveys to any of the involved parties any rights to operate any marine terminal facility by means of lease, license, permit, assignment, land rental, or other similar arrangement for the use of marine terminal facilities or property.
(b) All marine terminal facilities agreements as defined in § 535.310(a) are exempt from the filing and waiting period requirements of the Act and this part.
(c) Parties to marine terminal facilities agreements currently in effect shall provide copies to any requesting party for a reasonable copying and mailing fee.
(d) The filing fee for optional filing of terminal facilities agreements is provided in § 535.401(g).
(a) Low market share agreement means any agreement among ocean common carriers which contains none of the authorities listed in § 535.502(b) and for which the combined market share, based on cargo volume, of the parties in any of the agreement’s sub-trades is either:
(1) Less than 30 percent, if all parties are members of another agreement in the same trade or sub-trade containing any of the authorities listed in § 535.502(b); or
(2) Less than 35 percent, if at least one party is not a member of another agreement in the same trade or sub-trade containing any of the authorities listed in § 535.502(b).
(b) Low market share agreements are exempt from the waiting period requirement of the Act and this part, and are effective on filing.
(c) Parties to agreements may seek a determination from the Director, Bureau of Trade Analysis, as to whether a proposed agreement meets the general definition of a low market share agreement.
(d) The filing fee for low market share agreements is provided in § 535.401(g).
§ 535.312 Vessel charter party-exemption.
(a) For purposes of this section, vessel charter party shall mean a contractual agreement between two ocean common carriers for the charter of the full reach of a vessel, which agreement sets forth the entire terms and conditions (including duration, charter hire, and geographical or operational limitations, if any) under which the vessel will be employed.
(b) Vessel charter parties, as defined in paragraph (a) of this section, are exempt from the filing requirements of the Act and this part.
(c) The filing fee for optional filing of vessel charter parties is provided in § 535.401(g).
Subpart D – Filing of Agreements
§ 535.401 General requirements.
(a) All agreements (including oral agreements reduced to writing in accordance with the Act) subject to this part and filed with the Commission for review and disposition pursuant to section 6 of the Act (46 U.S.C. 40304, 40306, 41307(b)-(d)), must be submitted to the Commission either in paper during regular business hours to the Secretary, Federal Maritime Commission, Washington, DC 20573, or electronically using the automated agreement filing system.
(1) Paper filings. Paper filings must include:
(i) A true copy and seven additional copies of the executed agreement;
(ii) Where required by this part, an original and five copies of the completed Information Form referenced at subpart E of this part; and
(iii) A letter of transmittal as described in paragraph (b) of this section.
(2) Electronic filings. (i) Electronic filings using the automated agreement filing system must be made in accordance with the instructions found on the Commission’s home page, http://www.fmc.gov.
(ii) Electronic filings must include searchable Portable Document Format (PDF) copies of the following:
(A) A true copy of the executed agreement;
(B) Where required by this part, a completed Information Form referenced at subpart E of this part; and
(C) A letter of transmittal as described in paragraph (b) of this section.
(b) The letter of transmittal shall:
(1) Identify all of the documents being transmitted including, in the instance of a modification to an effective agreement, the full name of the effective agreement, the Commission-assigned agreement number of the effective agreement and the revision, page and/or appendix number of the modification being filed;
(2) Provide a concise, succinct summary of the filed agreement or modification separate and apart from any narrative intended to provide support for the acceptability of the agreement or modification;
(3) Clearly provide the typewritten or otherwise imprinted name, position, business address, and telephone number of the filing party; and
(4) Be signed by the filing party or on the filing party’s behalf by an authorized employee or agent of the filing party. A faxed, photocopied, or scanned signature will be accepted.
(c) To facilitate the timely and accurate publication of the
(d) Any agreement that does not meet the filing requirements of this section, including any applicable Information Form requirements, shall be rejected in accordance with § 535.601(b).
(e) Assessment agreements shall be filed and shall be effective upon filing.
(f) Parties to agreements with expiration dates shall file any modification seeking renewal for a specific term or elimination of a termination date in sufficient time to accommodate the 45-day waiting period required under the Act.
(g) The filing fee is $3,454 for new agreements and any agreement modifications requiring Commission review and action; $526 for agreements processed under delegated authority (for types of agreements that can be processed under delegated authority, see § 501.27(e) of this chapter); $296 for carrier exempt agreements; and $87 for terminal exempt agreements.
(h) The fee for a request for expedited review of an agreement pursuant to § 535.605 is $151. This fee must be paid in addition to the carrier agreement filing fee required by paragraph (g) of this section.
§ 535.402 Complete and definite agreements.
An agreement filed under the Act must be clear and definite in its terms, must embody the complete, present understanding of the parties, and must set forth the specific authorities and conditions under which the parties to the agreement will conduct their operations and regulate the relationships among the agreement members, unless those details are matters specifically enumerated as exempt from the filing requirements of this part.
§ 535.403 Form of agreements.
The requirements of this section apply to all agreements except marine terminal agreements and assessment agreements.
(a) Agreements shall be clearly and legibly written. Agreements in a language other than English shall be accompanied by an English translation.
(b) Every agreement shall include a Title Page indicating:
(1) The full name of the agreement;
(2) Once assigned, the Commission-assigned agreement number;
(3) If applicable, the expiration date of the agreement; and
(4) The original effective date of the agreement whenever the Title Page is revised.
(c) Each agreement page (including modifications and appendices) shall be identified by printing the agreement name (as shown on the agreement title page) and, once assigned, the applicable Commission-assigned agreement number at the top of each page. For agreement modifications, the appropriate amendment number for each modification should also appear on the page along with the basic agreement number.
(d) Each agreement and/or modification filed must be signed by an official or authorized representative of each of the parties and must indicate the typewritten full name of the signing party and his or her position, including organizational affiliation. Faxed, photocopied, or scanned signatures will be accepted.
(e) Every agreement shall include a Table of Contents indicating the location of all agreement provisions.
§ 535.404 Agreement provisions.
Generally, each agreement should:
(a) Indicate the full legal name of each party, including any FMC-assigned agreement number associated with that name, and the address of its principal office (not the address of any agent or representative not an employee of the participating party);
(b) State the ports or port ranges to which the agreement applies as well as any inland points or areas to which it also applies; and
(c) Specify, by organizational title, the administrative and executive officials determined by the agreement parties to be responsible for designated affairs of the agreement and the respective duties and authorities delegated to those officials. At a minimum, the agreement should specify:
(1) The official(s) with authority to file the agreement and any modification thereto and to submit associated supporting materials; and
(2) A statement as to any designated U.S. representative of the agreement required by this chapter.
§ 535.405 Organization of conference agreements.
Each conference agreement shall:
(a) State that, at the request of any member, the conference shall engage the services of an independent neutral body to fully police the obligations of the conference and its members. The agreement must include a description of any such neutral body authority and procedures related thereto.
(b) State affirmatively that the conference parties shall not engage in conduct prohibited by sections 10(c)(1) or 10(c)(3) of the Act (46 U.S.C. 41105(1) or 41105(3)).
(c) Specify the procedures for consultation with shippers and for handling shippers’ requests and complaints.
(d) Include provisions for independent action in accordance with § 535.801 of this part.
§ 535.406 Modification of agreements.
The requirements of this section apply to all agreements except marine terminal agreements and assessment agreements.
(a) Agreement modifications shall be filed in accordance with the provisions of §§ 535.401, 535.402, and 535.403.
(b) Agreement modifications shall be made by reprinting the entire page on which the matter being changed is published (“revised page”). The revised page shall indicate the consecutive denomination of the revision (e.g., “1st Revised Page 7”). Additional material may be published on a new original page. New original pages inserted between existing effective pages shall be numbered with an alpha suffix (e.g., a page inserted between page 7 and page 8 shall be numbered 7a).
(c) Each revised page shall be accompanied by a duplicate page, submitted for illustrative purposes only, indicating the language being modified in the following manner:
(1) Language being deleted or superseded shall be struck through; and,
(2) New and initial or replacement language shall immediately follow the language being superseded and be underlined.
(d) If a modification requires the relocation of the provisions of the agreement, such modification shall be accompanied by a revised Table of Contents page that shall indicate the new location of the provisions.
§ 535.407 Application for waiver.
(a) Upon a showing of good cause, the Commission may waive the requirements of §§ 535.401, 535.403, 535.404, 535.405, and 535.406.
(b) Requests for such a waiver shall be submitted in advance of the filing of the agreement to which the requested waiver would apply and shall state:
(1) The specific provisions from which relief is sought;
(2) The special circumstances requiring the requested relief; and
(3) Why granting the requested waiver will not substantially impair effective review of the agreement.
§ 535.408 Activities that may be conducted without further filings.
(a) Agreements that arise from authority of an effective agreement but whose terms are not fully set forth in the effective agreement to the extent required by § 535.402 are permitted without further filing only if they:
(1) Are themselves exempt from the filing requirements of this part (pursuant to subpart C – Exemptions of this part); or
(2) Are listed in paragraph (b) of this section.
(b) Unless otherwise exempt in subpart C of this part, only the following technical or operational matters of an agreement’s affairs established pursuant to express enabling authority in an agreement are considered part of the effective agreement and do not require further filing under section 5 of the Act (46 U.S.C. 40301(d)-(e), 40302-40303, 40305):
(1) Establishment of tariff rates, rules and regulations and their joint publication;
(2) The terms and conditions of space allocation and slot sales, the procedures for allocating space, the establishment of space charter rates, and the terms and conditions of charter parties;
(3) Stevedoring, terminal, and related services including the operation of tonnage centers or other joint container marshaling facilities;
(4) The following administrative matters:
(i) Scheduling of agreement meetings;
(ii) Collection, collation and circulation of data and reports from or to members;
(iii) Procurement, maintenance, or sharing of office facilities, furnishings, equipment and supplies, the allocation and assessment of costs thereof, or the provisions for the administration and management of such agreements by duly appointed individuals;
(iv) Procedures for anticipating parties’ space requirements;
(v) Maintenance of books and records; and
(vi) Details as to the following matters as between parties to the agreement: insurance, procedures for resolutions of disputes relating to loss and/or damage of cargo, and force majeure clauses;
(5) The following operational matters:
(i) Port rotations and schedule adjustments; and
(ii) Changes in vessel size, number of vessels, or vessel substitution or replacement, if the resulting change is within a capacity range specified in the agreement; and
(6) Neutral body policing (limited to the description of neutral body authority and procedures related thereto).
Subpart E – Information Form Requirements
§ 535.501 General requirements.
(a) Agreements and modifications to agreements identified in § 535.502 shall be accompanied by an Information Form containing information and data on the agreement and the parties’ authority under the agreement.
(b) Parties to an agreement subject to this subpart shall complete and submit an original and five copies of the Information Form at the time the agreement is filed. A copy of the Form in Microsoft Word and Excel format may be downloaded from the Commission’s home page at http://www.fmc.gov, or a paper copy of the Form may be obtained from the Bureau of Trade Analysis. In lieu of submitting paper copies, parties may complete and submit their Information Form in the Commission’s prescribed electronic format, either on diskette or CD-ROM, or submit the Information Form using the automated agreement filing system in accordance with the instructions found on the Commission’s home page, http://www.fmc.gov.
(c) A complete response in accordance with the instructions on the Information Form shall be supplied to each item. If a party to the agreement is unable to supply a complete response, that party shall provide either estimated data (with an explanation of why precise data are not available) or a detailed statement of reasons for noncompliance and the efforts made to obtain the required information.
(d) Agreement parties may supplement the Information Form with any additional information or material to assist the Commission’s review of an agreement.
(e) The Information Form and any additional information submitted in conjunction with the filing of an agreement shall not be disclosed by the Commission except as provided in § 535.608.
§ 535.502 Agreements subject to the Information Form requirements.
Agreements and modifications to agreements between or among ocean common carriers subject to this subpart are:
(a) All agreements identified in § 535.201(a), except for low market share agreements identified in § 535.311;
(b) Modifications to an agreement that add any of the following authorities:
(1) The discussion of, or agreement upon, whether on a binding basis under a common tariff or a non-binding basis, any kind of rate or charge;
(2) The discussion of, or agreement on, capacity rationalization;
(3) The establishment of a joint service;
(4) The pooling or division of cargo traffic, earnings, or revenues and/or losses; or
(5) The discussion of, or agreement on, any service contract matter; and
(c) Modifications that expand the geographic scope of an agreement containing any authority identified in § 535.502(b).
§ 535.503 Information Form.
(a) The Information Form, with instructions, for agreements and modifications to agreements subject to this subpart, are set forth in sections I through V of appendix A of this part. The instructions should be read in conjunction with the Act and this part.
(b) The Information Form shall apply as follows:
(1) Sections I and V shall be completed by parties to all agreements identified in § 535.502;
(2) Section II shall be completed by parties to agreements identified in § 535.502(a) that contain any of the following authorities: the charter or use of vessel space in exchange for compensation or services; or the rationalization of sailings or services relating to a schedule of ports, the frequency of vessel calls at ports, or the size and capacity of vessels for deployment. Such authorities do not include the establishment of a joint service, nor capacity rationalization;
(3) Section III shall be completed by parties to agreements identified in § 535.502 that contain the authority to discuss or agree on capacity rationalization; and
(4) Section IV shall be completed by parties to agreements identified in § 535.502 that contain any of the following authorities:
(i) The discussion of, or agreement upon, whether on a binding basis under a common tariff or a non-binding basis, any kind of rate or charge;
(ii) The establishment of a joint service;
(iii) The pooling or division of cargo traffic, earnings, or revenues and/or losses; or
(iv) The discussion of, or agreement on, any service contract matter.
§ 535.504 Application for waiver.
(a) Upon a showing of good cause, the Commission may waive any part of the Information Form requirements in this subpart.
(b) A request for such a waiver must be submitted and approved by the Commission in advance of the filing of the Information Form to which the requested waiver would apply. Requests for a waiver shall be submitted in writing to the Director, Bureau of Trade Analysis, Federal Maritime Commission, Washington, DC 20573-0001, and shall state:
(1) The specific requirements from which relief is sought;
(2) The special circumstances requiring the requested relief;
(3) Relevant trade and industry data and information to substantiate and support the special circumstances requiring the requested relief;
(4) Why granting the requested waiver will not substantially impair effective review of the agreement; and
(5) A description of the full membership, geographic scope, and authority of the agreement or the agreement modification that is to be filed with the Commission.
(c) The Commission may take into account the presence or absence of shipper complaints as well as the past compliance of the agreement parties with any reporting requirement under this part in considering an application for a waiver.
Subpart F – Action on Agreements
§ 535.601 Preliminary review-rejection of agreements.
(a) The Commission shall make a preliminary review of each filed agreement to determine whether the agreement is in compliance with the requirements of the Act and this part and, where applicable, whether the accompanying Information Form is complete or, where not complete, whether the deficiency is adequately explained or is excused by a waiver granted by the Commission under § 535.504.
(b)(1) The Commission shall reject any agreement that fails to comply substantially with the filing and Information Form of the Act and this part. The Commission shall notify the filing party in writing of the reason for rejection of the agreement. The original filing, along with any supplemental information or documents submitted, shall be returned to the filing party.
(2) Should a rejected agreement be refiled, the full 45-day waiting period will apply to the refiled agreement.
§ 535.602 Federal Register notice.
(a) A notice of any filed agreement will be transmitted to the
(b) The notice will include:
(1) A short title for the agreement;
(2) The identity of the parties to the agreement and the filing party;
(3) The Federal Maritime Commission agreement number;
(4) A concise summary of the agreement’s contents;
(5) A statement that the agreement is available for inspection at the Commission’s offices; and
(6) A request for comments, including relevant information and documents, regarding the agreement and the date by which comments should be submitted in order to be most useful to the Commission’s review of the agreement.
§ 535.603 Comment.
(a) Persons may file with the Secretary written comments, including relevant information and documents, regarding a filed agreement. Commenters may submit the comment by email to [email protected] or deliver to Secretary, Federal Maritime Commission, 800 N Capitol St. NW, Washington, DC 20573-0001. The Commission will treat such comments as confidential in accordance with § 535.608.
(b) The filing of a comment does not entitle a person to:
(1) A reply to the comment by the Commission;
(2) The institution of any Commission or court proceeding;
(3) Discussion of the comment in any Commission or court proceeding concerning the filed agreement; or
(4) Participation in any proceeding that may be instituted.
§ 535.604 Waiting period.
(a) The waiting period before an agreement becomes effective shall commence on the date that an agreement is filed with the Commission.
(b) Unless suspended by a request for additional information or extended by court order, the waiting period terminates and an agreement becomes effective on the later of the 45th day after the filing of the agreement with the Commission or on the 30th day after publication of notice of the filing in the
(c) The waiting period is suspended on the date when the Commission, either orally or in writing, requests additional information or documentary materials pursuant to section 6(d) of the Act (46 U.S.C. 40304(d)). A new 45-day waiting period begins on the date of receipt of all the additional material requested or of a statement of the reasons for noncompliance, and the agreement becomes effective in 45 days unless the waiting period is further extended by court order or the Commission grants expedited review.
§ 535.605 Requests for expedited review.
(a) Upon written request of the filing party, the Commission may shorten the waiting period. In support of a request, the filing party should provide a full explanation, with reference to specific facts and circumstances, of the necessity for a shortened waiting period. In reviewing requests, the Commission will consider the parties’ needs and the Commission’s ability to complete its review of the agreement’s potential impact. In no event, however, may the period be shortened to less than fourteen (14) days after the publication of the notice of the filing of the agreement in the
(b) A request for expedited review will be considered for an agreement whose 45-day waiting period has begun anew after being stopped by a request for additional information.
§ 535.606 Requests for additional information.
(a) The Commission may request from the filing party any additional information and documents necessary to complete the statutory review required by the Act. The request shall be made prior to the expiration of the 45-day waiting period. All responses to a request for additional information shall be submitted to the Director, Bureau of Trade Analysis, Federal Maritime Commission, Washington, DC 20573.
(b) Where the Commission has made a request for additional information, the agreement’s effective date will be 45 days after receipt of the complete response to the request for additional information. If all questions are not fully answered or requested documents are not supplied, the parties must include a statement of reasons why questions were not fully answered or documents supplied. In the event all material is not submitted, the agreement’s effective date will be 45 days after receipt of both the documents and information which are submitted, if any, and the statement indicating the reasons for noncompliance. The Commission may, upon notice to the Attorney General, and pursuant to sections 6(i) and 6(k) of the Act (46 U.S.C. 41307(c) and 41307(d)), request the United States District Court for the District of Columbia to further extend the agreement’s effective date until there has been substantial compliance.
(c) A request for additional information may be made orally or in writing. In the case of an oral request, a written confirmation of the request shall be mailed to the filing party within seven days of the oral request.
(d) The Commission will publish a notice in the
§ 535.607 Failure to comply with requests for additional information.
(a) A failure to comply with a request for additional information results when a person filing an agreement, or an officer, director, partner, agent, or employee thereof fails to substantially respond to the request or does not file a satisfactory statement of reasons for noncompliance. An adequate response is one which directly addresses the Commission’s request. When a response is not received by the Commission within a specified time, failure to comply will have occurred.
(b) The Commission may, pursuant to section 6(i) of the Act (46 U.S.C. 41307(c)), request relief from the United States District Court for the District of Columbia when it considers that there has been a failure to substantially comply with a request for additional information. The Commission may request that the court:
(1) Order compliance with the request;
(2) Extend the review period until there has been substantial compliance; or
(3) Grant other equitable relief that under the circumstances seems necessary or appropriate.
(c) Where there has been a failure to substantially comply, section 6(i)(2) of the Act (46 U.S.C. 41307(c)(2)) provides that the court shall extend the review period until there has been substantial compliance.
§ 535.608 Confidentiality of submitted material.
(a) Except for an agreement filed under 46 U.S.C. ch. 403, all information and documents submitted to the Commission by the filing party(ies) or third parties regarding an agreement will be exempt from disclosure under 5 U.S.C. 552. Included in this disclosure exemption is information provided in the Information Form, voluntary submission of additional information, reasons for noncompliance, replies to requests for additional information, and third-party comments.
(b) Information that is confidential pursuant to paragraph (a) of this section may be disclosed, however, to the extent:
(1) It is relevant to an administrative or judicial action or proceeding; or
(2) It is disclosed to either body of Congress or to a duly authorized committee or subcommittee of Congress.
(c) Parties may voluntarily disclose or make information publicly available. If parties elect to disclose information they shall promptly inform the Commission.
§ 535.609 Negotiations.
At any time after the filing of an agreement and prior to the conclusion of judicial injunctive proceedings, the filing party or an authorized representative may submit additional factual or legal support for an agreement or may propose modifications of an agreement. Such negotiations between Commission personnel and filing parties may continue during the pendency of injunctive proceedings. Shippers, other government departments or agencies, and other third parties may not participate in these negotiations.
Subpart G – Reporting Requirements
§ 535.701 General requirements.
(a) Parties to agreements identified in § 535.702(a) shall submit quarterly Monitoring Reports on an ongoing basis for as long as the agreement remains in effect, containing information and data on the agreement and the parties’ authority under the agreement.
(b) Parties to agreements identified in § 535.704 are required to submit minutes of their meetings for as long as their agreements remain in effect.
(c) If a joint service is a party to an agreement that is subject to the requirements of this subpart, the joint service shall be treated as one member of that agreement for purposes of that agreement’s Monitoring Reports.
(d) Monitoring Reports and minutes required to be filed by this subpart should be submitted to: Director, Bureau of Trade Analysis, Federal Maritime Commission, Washington, DC 20573-0001. A copy of the Monitoring Report form in Microsoft Word and Excel format may be downloaded from the Commission’s home page at http://www.fmc.gov, or a paper copy may be obtained from the Bureau of Trade Analysis. In lieu of submitting paper copies, parties may complete and submit their Monitoring Reports in the Commission’s prescribed electronic format, either on diskette or CD-ROM.
(e)(1) The regulations in this paragraph (e) are stayed until further notice.
(2) Reports and minutes required to be filed by this subpart may be filed by direct electronic transmission in lieu of hard copy. Detailed information on electronic transmission is available from the Commission’s Bureau of Trade Analysis. Certification and signature requirements of this subpart can be met on electronic transmissions through use of a pre-assigned Personal Identification Number (PIN) obtained from the Commission. PINs can be obtained by submission by an official of the filing party of a statement to the Commission agreeing that inclusion of the PIN in the transmission constitutes the signature of the official. Only one PIN will be issued for each agreement. Where a filing party has more than one official authorized to file minutes or reports, each additional official must submit such a statement countersigned by the principal official of the filing party. Each filing official will be issued a unique password. A PIN or designation of authorized filing officials may be canceled or changed at any time upon the written request of the principal official of the filing party. Direct electronic transmission filings may be made at any time except between the hours of 8:30 a.m. and 2 p.m. Eastern time on Commission business days.
(f) Time for filing. Except as otherwise instructed, Monitoring Reports shall be filed within 75 days of the end of each calendar quarter. Minutes of meetings shall be filed within 21 days after the meeting. Other documents shall be filed within 15 days of the receipt of a request for documents.
(g) A complete response in accordance with the instructions on the Monitoring Report shall be supplied to each item. If a party to an agreement is unable to supply a complete response, that party shall provide either estimated data (with an explanation of why precise data are not available) or a detailed statement of reasons for noncompliance and the efforts made to obtain the required information.
(h) A Monitoring Report for a particular agreement may be supplemented with any other relevant information or documentary material.
(i) Confidentiality. (1) The Monitoring Reports, minutes, and any other additional information submitted by a particular agreement will be exempt from disclosure under 5 U.S.C. 552, except to the extent:
(i) It is relevant to an administrative or judicial action or proceeding; or
(ii) It is disclosed to either body of Congress or to a duly authorized committee or subcommittee of Congress.
(2) Parties may voluntarily disclose or make Monitoring Reports, minutes or any other additional information publicly available. The Commission must be promptly informed of any such voluntary disclosure.
(j) Monitoring Report or alternative periodic reporting requirements in this subpart shall not be construed to authorize the exchange or use by or among agreement members of information required to be submitted.
§ 535.702 Agreements subject to Monitoring Report and alternative periodic reporting requirements.
(a) Agreements subject to the Monitoring Report requirements of this subpart are:
(1) An agreement that contains the authority to discuss or agree on capacity rationalization; or
(2) Where the parties to an agreement hold a combined market share, based on cargo volume, of 35 percent or more in the entire U.S. inbound or outbound geographic scope of the agreement and the agreement contains any of the following authorities:
(i) The discussion of, or agreement upon, whether on a binding basis under a common tariff or a non-binding basis, any kind of rate or charge;
(ii) The establishment of a joint service;
(iii) The pooling or division of cargo traffic, earnings, or revenues and/or losses; or
(iv) The discussion of, or agreement on, any service contract matter.
(b) The determination of an agreement’s reporting obligation under § 535.702(a)(2) in the first instance shall be based on the market share data reported on the agreement’s Information Form pursuant to § 535.503. Thereafter, at the beginning of each calendar year, the Bureau of Trade Analysis will notify the agreement parties of any changes in its reporting requirements based on market share data reported on the agreement’s quarterly Monitoring Report for the previous second quarter (April-June).
(c) The Commission may require, as necessary, that the parties to an agreement with market share below the 35 percent threshold, as identified and defined in § 535.702(a)(2), submit Monitoring Reports pursuant to § 535.703.
(d) In addition to or instead of the Monitoring Report in § 535.703, the Commission may prescribe, as necessary, alternative periodic reporting requirements for parties to any agreement identified in § 535.201.
§ 535.703 Monitoring Report form.
(a) For agreements subject to the Monitoring Report requirements in § 535.702(a), the Monitoring Report form, with instructions, is set forth in sections I through III of appendix B of this part. The instructions should be read in conjunction with the Act and this part.
(b) The Monitoring Report shall apply as follows:
(1) Section I shall be completed by parties to agreements identified in § 535.702(a)(1);
(2) Section II shall be completed by parties to agreements identified in § 535.702(a)(2); and
(3) Section III shall be completed by parties to all agreements identified in § 535.702(a).
(c) In accordance with the requirements and instructions in appendix B of this part, parties to an agreement subject to part 2(C) of section I of the Monitoring Report shall submit a narrative statement on any significant reductions in vessel capacity that the parties will implement under the agreement. The term “a significant reduction” is defined in appendix B. The narrative statement shall be submitted to the Director, Bureau of Trade Analysis, no later than 15 days after a significant reduction in vessel capacity has been agreed upon by the parties but prior to the implementation of the actual reduction under the agreement.
(d)(1) The Commission may require, in its discretion, that the information on the top agreement commodities in part 4 of section II of the Monitoring Report be reported on a sub-trade basis, as defined in appendix B of this part, rather than on an agreement-wide basis. When commodity sub-trade information is required under this section, the Commission shall notify the parties to the agreement.
(2) For purposes of § 535.703(d)(1), the top agreement commodities shall mean the top 10 liner commodities (including commodities not subject to tariff publication) carried by all the agreement parties in each sub-trade within the geographic scope of the agreement during the calendar quarter. Where the agreement covers both U.S. inbound and outbound liner movements, inbound and outbound sub-trades shall be stated separately. All other instructions, definitions, and terms shall apply as specified and required in appendix B of this part.
§ 535.704 Filing of minutes.
(a) Agreements required to file minutes. (1) This section applies to agreements authorized to engage in any of the following activities: discussion or establishment of any type of rates or charges, whether in tariffs or service contracts; pooling or apportionment of cargo traffic; discussion of revenues, losses, or earnings; or discussion or agreement on service contract matters, including the establishment of voluntary service contract guidelines.
(2) Each agreement to which this section applies shall file with the Commission, through a designated official, minutes of all meetings defined in paragraph (b) of this section, except as provided in paragraph (d) of this section.
(b) Meetings. For purposes of this subpart, the term meeting shall include all discussions at which any agreement is reached among any number of the parties to an agreement relating to the business of the agreement, and all other discussions among three or more members of the agreement (or all members if fewer than three) relating to the business of the agreement. This includes, but is not limited to, meetings of the members’ agents, principals, owners, officers, employees, representatives, committees, or subcommittees, and communications among members facilitated by agreement officials. Discussions conducted by telephone, electronic device, or other means are included.
(c) Content of minutes. Minutes shall include the following:
(1) The date, time, and place of the meeting;
(2) A list of participants and companies represented;
(3) A description of discussions detailed enough so that a non-participant reading the minutes could reasonably gain a clear understanding of the nature and extent of the discussions and, where applicable, any decisions reached. Such description need not disclose the identity of the parties that participated in the discussion or the votes taken; and
(4) Any report, circular, notice, statistical compilation, analytical study, survey, or other work distributed, discussed, or exchanged at the meeting, whether presented by oral, written, electronic, or other means. Where the aforementioned materials are reasonably available to the public, a citation to the work or relevant part thereof is acceptable in lieu of the actual work. Any documents submitted to the Commission pursuant to this section need not disclose the identity of the party or parties that circulated the document at the meeting.
(d) Exemption. For parties to agreements subject to this section, the following exemptions shall apply:
(1) Minutes of meetings between parties are not required to reflect discussions of matters set forth in § 535.408(b)(2), (b)(3), (b)(4)(iii), (b)(4)(iv), (b)(4)(v), and (b)(4)(vi);
(2) Minutes of meetings between parties are not required to reflect discussion of matters set forth in § 535.408(b)(5) to the extent that such discussions involve minor operational matters that have little or no impact on the frequency of vessel calls at ports or the amount of vessel capacity offered by the parties in the geographic scope of the agreement; and
(3) Minutes of meetings between parties are not required to reflect discussions of or actions taken with regard to rates that, if adopted, would be required to be published in an appropriate tariff. This exemption does not apply to discussions concerning general rate policy, general rate changes, the opening or closing of rates, service contracts, or time/volume rates.
(e) Serial numbers. Each set of minutes filed with the Commission shall include the agreement name and FMC number and a unique identification number indicating the sequence in which the meeting took place during the calendar year.
§ 535.705 Application for waiver.
(a) Upon a showing of good cause, the Commission may waive any requirement of this subpart.
(b) A request for such a waiver must be submitted and approved by the Commission in advance of the filing of the Monitoring Report or minutes to which the requested waiver would apply. Requests for a waiver shall be submitted in writing to the Director, Bureau of Trade Analysis, Federal Maritime Commission, Washington, DC 20573-0001, and shall state and provide the following:
(1) The specific requirements from which relief is sought;
(2) The special circumstances requiring the requested relief;
(3) Relevant trade and industry data and information to substantiate and support the special circumstances requiring the requested relief; and
(4) Why granting the requested waiver will not substantially impair effective monitoring of the agreement.
(c) The Commission may take into account the presence or absence of shipper complaints as well as the past compliance of the agreement parties with any reporting requirement under this part in considering an application for a waiver.
Subpart H – Mandatory and Prohibited Provisions
§ 535.801 Independent action.
(a) Each conference agreement shall specify the independent action (“IA”) procedures of the conference, which shall provide that any conference member may take independent action on any rate or service item upon not more than 5 calendar days’ notice to the conference and shall otherwise be in conformance with section 5(b)(8) of the Act (46 U.S.C. 40303(b)(8)).
(b)(1) Each conference agreement that provides for a period of notice for independent action shall establish a fixed or maximum period of notice to the conference. A conference agreement shall not require or permit a conference member to give more than 5 calendar days’ notice to the conference, except that in the case of a new or increased rate the notice period shall conform to the tariff publication requirements of this chapter.
(2) A conference agreement shall not prescribe notice periods for adopting, withdrawing, postponing, canceling, or taking other similar actions on independent actions.
(c) Each conference agreement shall indicate the conference official, single designated representative, or conference office to which notice of independent action is to be provided. A conference agreement shall not require notice of independent action to be given by the proposing member to the other parties to the agreement.
(d) A conference agreement shall not require a member who proposes independent action to attend a conference meeting, to submit any further information other than that necessary to accomplish the publication of the independent tariff item, or to comply with any other procedure for the purpose of explaining, justifying, or compromising the proposed independent action.
(e) A conference agreement shall specify that any new rate or service item proposed by a member under independent action (except for exempt commodities not published in the conference tariff) shall be included by the conference in its tariff for use by that member effective no later than 5 calendar days after receipt of the notice and by any other member that notifies the conference that it elects to adopt the independent rate or service item on or after its effective date.
(f)(1) As it pertains to this part, “adopt” means the assumption in identical form of an originating member’s independent action rate or service item, or a particular portion of such a rate or service item. If a carrier adopts an IA at a lower rate than the conference rate when there is less than 30 days remaining on the original IA, the adopted IA should be made to expire 30 days after its effectiveness to comply with the statutory 30-day notice requirement. In the case of an independent action time/volume rate (“IA TVR”), the dates of the adopting IA may vary from the dates of the original IA, so long as the duration of the adopting IA is the same as that of the originating IA. Furthermore, no term other than “adopt” (e.g., “follow,” “match”) can be used to describe the action of assuming as one’s own an initiating carrier’s IA. Additionally, if a party to an agreement chooses to take on an IA of another party, but alters it, such action is considered a new IA and must be published pursuant to the IA publication and notice provisions of the applicable agreement.
(2) An IA TVR published by a member of a ratemaking agreement may be adopted by another member of the agreement, provided that the adopting member takes on the original IA TVR in its entirety without change to any aspect of the original rate offering (except beginning and ending dates in the time period) (i.e., a separate TVR with a separate volume of cargo but for the same duration). Any subsequent IA TVR offering that results in a change in any aspect of the original IA TVR, other than the name of the offering carrier or the beginning date of the adopting IA TVR, is a new independent action and shall be processed in accordance with the provisions of the applicable agreement. The adoption procedures discussed above do not authorize the participation by an adopting carrier in the cargo volume of the originating carrier’s IA TVR. Member lines may publish and participate in joint IA TVRs, if permitted to do so under the terms of their agreement; however, no carrier may participate in an IA TVR already published by another carrier.
(g) A conference agreement shall not require or permit individual member lines to be assessed on a per carrier usage basis the costs and/or administrative expenses incurred by the agreement in processing independent action filings.
(h) A conference agreement may not permit the conference to unilaterally designate an expiration date for an independent action taken by a member line. The right to determine the duration of an IA remains with the member line, and a member line must be given the opportunity to designate whatever duration it chooses for its IA, regardless if the duration is for a specified period or open ended. Only in instances where a member line gives its consent to the conference, or where a member line freely elects not to provide for the duration of its IA after having been given the opportunity, can the conference designate an expiration date for the member line’s IA.
(i) Any new conference agreement or any modification to an existing conference agreement that does not comply with the requirements of this section shall be rejected pursuant to § 535.601 of this part.
(j) If ratemaking is by sections within a conference, then any notice to the conference required by § 535.801 may be made to the particular ratemaking section.
§ 535.802 Service contracts.
(a) Ocean common carrier agreements may not prohibit or restrict a member or members of the agreement from engaging in negotiations for service contracts with one or more shippers.
(b) Ocean common carrier agreements may not require a member or members of the agreement to disclose a negotiation on a service contract, or the terms and conditions of a service contract, other than those terms or conditions required by section 8(c)(3) of the Act (46 U.S.C. 40502(d)).
(c) Ocean common carrier agreements may not adopt mandatory rules or requirements affecting the right of an agreement member or agreement members to negotiate or enter into service contracts.
(d) An agreement may provide authority to adopt voluntary guidelines relating to the terms and procedures of an agreement member’s or agreement members’ service contracts if the guidelines explicitly state the right of the members of the agreement not to follow these guidelines.
(e) Voluntary guidelines shall be submitted to the Director, Bureau of Trade Analysis, Federal Maritime Commission, Washington, DC 20573-0001. Voluntary guidelines shall be kept confidential in accordance with § 535.608 of this part. Use of voluntary guidelines prior to their submission is prohibited.
§ 535.803 Ocean freight forwarder compensation.
No conference or group of two or more ocean common carriers may:
(a) Deny to any member of such conference or group the right, upon notice of not more than 5 calendar days, to take independent action on any level of compensation paid to an ocean freight forwarder; or
(b) Agree to limit the payment of compensation to an ocean freight forwarder to less than 1.25 percent of the aggregate of all rates and charges applicable under the tariff assessed against the cargo on which the forwarding services are provided.
Subpart I – Penalties
§ 535.901 Failure to file.
Any person operating under an agreement, involving activities subject to the Act pursuant to sections 4 and 5(a) of the Act (46 U.S.C. 40301(a)-(c) and 40302) and this part and not exempted pursuant to section 16 of the Act (46 U.S.C. 40103) or excluded from filing by the Act, that has not been filed and that has not become effective pursuant to the Act and this part is in violation of the Act and this part and is subject to the civil penalties set forth in section 13(a) of the Act (46 U.S.C. 41107).
§ 535.902 Falsification of reports.
Knowing falsification of any report required by the Act or this part, including knowing falsification of any item in any applicable agreement information and/or reporting requirements pursuant to subparts E and G of this part, is a violation of the rules of this part and is subject to the civil penalties set forth in section 13(a) of the Act (46 U.S.C. 41107) and may be subject to the criminal penalties provided for in 18 U.S.C. 1001.
Subpart J – Paperwork Reduction
§ 535.991 OMB control numbers assigned pursuant to the Paperwork Reduction Act.
This section displays the control number assigned to information collection requirements of the Commission in this part by the Office of Management and Budget pursuant to the Paperwork Reduction Act of 1995, Pub. L. 104-13. The Commission intends that this section comply with the requirements of section 3507(a)(3) of the Paperwork Reduction Act, which requires that agencies display a current control number assigned by the Director of the Office of Management and Budget (OMB) for each agency information collection requirement in the following table:
| Section | Current OMB control No. |
|---|---|
| 535.101 through 535.902 | 3072-0045 |
Appendix A to Part 535 – Information Form and Instructions
1. All agreements and modifications to agreements between or among ocean common carriers identified in 46 CFR 535.502 must be accompanied by a completed Information Form to the full extent required in sections I through V of this Form. Sections I and V must be completed by all such agreements. In addition, sections II, III and IV must be completed, as applicable, in accordance with the authority contained in each agreement. Where an agreement containing multiple authorities is subject to duplicate reporting requirements in the various sections of this Form, the parties may provide only one response so long as the reporting requirements within each section are fully addressed. The Information Form specifies the data and information which must be reported for each section and the format in which it must be provided. If a party to an agreement is unable to supply a complete response to any item of this Form, that party shall provide either estimated data (with an explanation of why precise data are not available) or a detailed statement of reasons for noncompliance and the efforts made to obtain the required information. For purposes of this Form, if one of the agreement signatories is a joint service operating under an effective agreement, that signatory shall respond to the Form as a single agreement party.
2. For clarification of the agreement terminology used in this Form, the parties may refer to the definitions provided in 46 CFR 535.104. In addition, the following definitions shall apply for purposes of this Form: liner movement means the carriage of liner cargo by liner operators; liner cargo means cargo carried on liner vessels in a liner service; liner operator means a vessel-operating common carrier engaged in liner service; liner vessel means a vessel used in a liner service; liner service means a definite, advertised schedule of sailings at regular intervals; and TEU means a unit of measurement equivalent to one 20-foot shipping container. Further, when used in this Form, the terms “entire geographic scope of the agreement” or “agreement-wide” refer to the combined U.S. inbound trade and/or the combined U.S. outbound trade as such trades apply to the geographic scope of the agreement, as opposed to the term “sub-trade,” which is defined for reporting purposes as the scope of all liner movements between each U.S. port range and each foreign country within the scope of the agreement. Whether required on a combined trade basis or a sub-trade basis, the U.S. inbound trade (or sub-trades) and the U.S. outbound trade (or sub-trades) shall always be stated separately.
Section I applies to all agreements identified in 46 CFR 535.502. Parties to such agreements must complete parts 1 through 4 of this section. The authorities listed in part 4 of this section do not necessarily include all of the authorities that must be set forth in an agreement filed under the Act. The specific authorities between the parties to an agreement, however, must be set forth, clearly and completely, in a filed agreement in accordance with 46 CFR 535.402.
State the full name of the agreement.
Provide a narrative statement describing the specific purpose(s) of the agreement pertaining to the parties’ business activities as ocean common carriers in the foreign commerce of the United States, and the commercial or other relevant circumstances within the geographic scope of the agreement that led the parties to enter into the agreement.
List all effective agreements that cover all or part of the geographic scope of this agreement, and whose parties include one or more of the parties to this agreement.
Identify whether the agreement authorizes the parties to discuss, or agree upon, whether on a binding basis under a common tariff or a non-binding basis, any kind of rate or charge.
Identify whether the agreement authorizes the parties to establish a joint service.
Identify whether the agreement authorizes the parties to pool cargo traffic or revenues.
Identify whether the agreement authorizes the parties to discuss, or agree on, any service contract matter.
Identify whether the agreement authorizes the parties to discuss or agree on capacity rationalization as defined in 46 CFR 535.104(e).
Identify whether the agreement contains provisions that place conditions or restrictions on the parties’ agreement participation, and/or use or offering of competing services within the geographic scope of the agreement.
Identify whether the agreement authorizes the parties to charter or use vessel space in exchange for compensation or services. This authority does not include capacity rationalization as referred to in part 4(E) of this section.
Identify whether the agreement authorizes the parties to rationalize sailings or services relating to a schedule of ports, the frequency of vessel calls at ports, or the size and capacity of vessels for deployment. This authority does not include the establishment of a joint service or capacity rationalization as referred to in parts 4(B) and 4(E) of this section.
Section II applies to agreements identified in 46 CFR 535.502(a) that contain any of the following authorities: a) the charter or use of vessel space in exchange for compensation or services; or b) the rationalization of sailings or services relating to a schedule of ports, the frequency of vessel calls at ports, or the size and capacity of vessels for deployment. Such authorities do not include the establishment of a “joint service,” nor “capacity rationalization” as these terms are defined in 46 CFR 535.104 (o) and (e). Parties to agreements identified in this section must complete all items in part 1.
For the most recent 12-month period for which complete data are available, provide the number of vessel calls each party made at each port for its liner services that would be covered by the agreement within the entire geographic scope of the agreement.
Provide a narrative statement on any significant changes, anticipated or planned to be implemented when the agreement goes into effect, in the number of vessel calls at a port for the parties’ liner services that would be covered by the agreement within the entire geographic scope of the agreement. Specifically, explain the nature of the significant change and its effect on the frequency of vessel calls at the port for the liner service that would be subject to the change. For purposes of this part, a significant change refers to an increase or a decrease in the number of vessel calls at a port for a fixed, seasonally planned, or indefinite period of time. A significant change excludes an incidental or temporary alteration in the number of vessel calls at a port, or an operational change in vessel calls that would have little or no impact on the number of vessel calls at a port. If no significant change is anticipated or planned, it shall be noted with the term “none” in response to part 1(B) of this section.
Section III applies to agreements identified in 46 CFR 535.502 that contain the authority to discuss or agree on capacity rationalization as defined in 46 CFR 535.104(e). Parties to such agreements must complete parts 1 and 2 of this section.
1. For the most recent calendar quarter for which complete data are available, provide the amount of vessel capacity for each party for each of its liner services that would be covered by the agreement within the entire geographic scope of the agreement, stated separately for the U.S. inbound and outbound trades as applicable to the geographic scope of the agreement. For purposes of this Form, vessel capacity means a party’s total commercial liner space on line-haul vessels, whether operated by it or other parties from whom space is obtained, sailing to and/or from the continent of North America for each of its liner services that would be covered by the agreement.
2. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was containerized, the amount(s) of vessel capacity for each party shall be reported in TEUs. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was non-containerized, the amount(s) of vessel capacity for each party shall be reported in non-containerized units of measurement. The unit of measurement used in calculating the amounts of non-containerized vessel capacity must be specified clearly and consistently applied.
Provide the percentage of vessel capacity utilization for each party for each of its liner services that would be covered by the agreement within the entire geographic scope of the agreement, corresponding to the figures and time period used in part 1(A) of this section, stated separately for the U.S. inbound and outbound trades as applicable to the geographic scope of the agreement. For purposes of this Form, the percentage of vessel capacity utilization means a party’s total volume of liner cargo, for each of its liner services that would be covered by the agreement, carried on any vessel space counted under part 1(A) of this section, divided by its total vessel capacity as defined and derived in part 1(A) of this section, which quotient is multiplied by 100.
Provide a narrative statement on any significant changes, anticipated or planned to be implemented when the agreement goes into effect, in the amounts of vessel capacity for the parties’ liner services that would be covered by the agreement within the entire geographic scope of the agreement. Specifically, explain the nature of and the reasons for the significant change and its effects on the liner service and the total amount of vessel capacity for such service that would be subject to the change. For purposes of this part, a significant change refers to the removal from or addition to a liner service of vessels or vessel space for a fixed, seasonally planned, or indefinite period of time. A significant change excludes instances when vessels may be temporarily repositioned or shifted from one service to another, or when vessel space may be temporarily altered, or when vessels are removed from a liner service and vessels of similar capacity are substituted. It also excludes operational changes in vessels or vessel space that would have little or no impact on the amount of vessel capacity offered in a liner service or a trade. If no significant change is anticipated or planned, it shall be noted with the term “none” in response to part 1(C) of this section.
For the most recent 12-month period for which complete data are available, provide the number of vessel calls each party made at each port for its liner services that would be covered by the agreement within the entire geographic scope of the agreement.
Provide a narrative statement on any significant changes, anticipated or planned to be implemented when the agreement goes into effect, in the number of vessel calls at a port for the parties’ liner services that would be covered by the agreement within the entire geographic scope of the agreement. Specifically, explain the nature of the significant change and its effect on the frequency of vessel calls at the port for the liner service that would be subject to the change. For purposes of this part, a significant change refers to an increase or a decrease in the number of vessel calls at a port for a fixed, seasonally planned, or indefinite period of time. A significant change excludes an incidental or temporary alteration in the number of vessel calls at a port, or an operational change in vessel calls that would have little or no impact on the number of vessel calls at a port. If no significant change is anticipated or planned, it shall be noted with the term “none” in response to part 2(B) of this section.
Section IV applies to agreements identified in 46 CFR 535.502 that contain any of the following authorities: a) the discussion of, or agreement upon, whether on a binding basis under a common tariff or a non-binding basis, any kind of rate or charge; b) the establishment of a joint service; c) the pooling or division of cargo traffic, earnings, or revenues and/or losses; or d) the discussion of, or agreement on, any service contract matter. Parties to such agreements must complete parts 1 through 5 of this section.
1. For the most recent calendar quarter for which complete data are available, provide the market shares of all liner operators for the entire geographic scope of the agreement and in each sub-trade within the scope of the agreement. A joint service shall be treated as a single liner operator, whether it is an agreement line or a non-agreement line. Sub-trade is defined as the scope of all liner movements between each U.S. port range within the scope of the agreement and each foreign country within the scope of the agreement. Where the agreement covers both U.S. inbound and outbound liner movements, inbound and outbound market shares shall be shown separately.
2. U.S. port ranges are defined as follows:
a. Atlantic and Gulf – Includes ports along the eastern seaboard and the Gulf of Mexico from the northern boundary of Maine to Brownsville, Texas. Also includes all ports bordering upon the Great Lakes and their connecting waterways, all ports in the State of New York on the St. Lawrence River, and all ports in Puerto Rico and the U.S. Virgin Islands.
b. Pacific – Includes all ports in the States of Alaska, Hawaii, California, Oregon, and Washington. Also includes all ports in Guam, American Samoa, Northern Marianas, Johnston Island, Midway Island, and Wake Island.
3. An application may be filed for a waiver of the definition of “sub-trade” under the procedures described in 46 CFR 535.504. In any such application, the burden shall be on the parties to show that their marketing and pricing practices have been done by ascertainable multi-country regions rather than by individual countries or, in the case of the United States, by broader areas than the port ranges defined herein. The parties must further show that, though operating individually, they were nevertheless applying essentially similar regional practices.
4. The formula for calculating market share in the entire agreement scope or in a sub-trade is as follows: The total amount of liner cargo carried on each liner operator’s liner vessels in the entire agreement scope or in the sub-trade during the most recent calendar quarter for which complete data are available, divided by the total liner movements in the entire agreement scope or in the sub-trade during the same calendar quarter, which quotient is multiplied by 100. The calendar quarter used must be clearly identified. The market shares held by non-agreement lines as well as by agreement lines must be provided, stated separately in the format indicated.
5. If 50 percent or more of the total liner cargo carried by the parties in the entire agreement scope during the calendar quarter was containerized, only containerized liner movements (measured in TEUs) must be used for determining market share. If 50 percent or more of the total liner cargo carried by the parties was non-containerized, only non-containerized liner movements must be used for determining market share. The unit of measurement used in calculating amounts of non-containerized cargo must be specified clearly and applied consistently.
1. For each party that served all or any part of the geographic scope of the agreement during all or any part of the most recent 12-month period for which complete data are available, provide each party’s total liner revenues within the geographic scope, total liner cargo carried within the geographic scope, and average revenue. For purposes of this Form, total liner revenues means the total revenues, in U.S. dollars, of each party corresponding to its total cargo carried for its liner services that would fall under the agreement, inclusive of all ocean freight charges, whether assessed on a port-to-port basis or a through intermodal basis; accessorial charges; surcharges; and charges for inland cargo carriage. Average revenue shall be calculated as the quotient of each party’s total liner revenues within the geographic scope divided by its total cargo carried within the geographic scope.
2. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the 12-month period was containerized, each party shall report only its total carryings of containerized liner cargo (measured in TEUs) within the geographic scope, total revenues generated by its carriage of containerized liner cargo, and average revenue per TEU. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the 12-month period was non-containerized, each party shall report only its total carryings of non-containerized liner cargo (specifying the unit of measurement used), total revenues generated by its carriage of non-containerized liner cargo, and average revenue per unit of measurement. When the agreement covers both U.S. inbound and outbound liner movements, inbound and outbound data shall be stated separately.
For the same 12-month period used in part 2 of this section, provide a list, for the entire geographic scope of the agreement, of the top 10 liner commodities (including commodities not subject to tariff publication) carried by all the parties for their liner services that would fall under the agreement. For purposes of this Form, commodities shall be identified at the 4-digit level of customarily used commodity coding schedules. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the 12-month period was containerized, this list shall include only containerized commodities. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the 12-month period was non-containerized, this list shall include only non-containerized commodities. When the agreement covers both U.S. inbound and outbound liner movements, inbound and outbound data shall be stated separately.
Provide the cargo volume and revenue results for each party for each of the major commodities listed in part 3(A) of this section, corresponding to the same 12-month period and unit of measurement used. For purposes of this Form, revenue results means the revenues, in U.S. dollars, earned by each party on the cargo volume of each major commodity listed in part 3(A) of this section, inclusive of all ocean freight charges, whether assessed on a port-to-port basis or a through intermodal basis; accessorial charges; surcharges; and charges for inland cargo carriage. If a party has no cargo volume and revenue results for a commodity listed in part 3(A) of this section, it shall be noted by using a zero for that party in response to part 3(B) of this section.
For the same calendar quarter used in part 1 of this section, provide the amount of vessel capacity for each party for each of its liner services that would fall under the agreement within the entire geographic scope of the agreement, stated separately for the U.S. inbound and outbound trades as applicable to the geographic scope of the agreement. For purposes of this Form, vessel capacity means a party’s total commercial liner space on line-haul vessels, whether operated by it or other parties from whom space is obtained, sailing to and/or from the continent of North America for each of its liner services that would fall under the agreement. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was containerized, the amount(s) of vessel capacity for each party shall be reported in TEUs. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was non-containerized, the amount(s) of vessel capacity for each party shall be reported in non-containerized units of measurement. The unit of measurement used in calculating the amounts of non-containerized vessel capacity must be specified clearly and consistently applied.
Provide the percentage of vessel capacity utilization for each party for each of its liner services that would fall under the agreement within the entire geographic scope of the agreement, corresponding to the figures and time period used in part 4(A) of this section, stated separately for the U.S. inbound and outbound trades as applicable to the geographic scope of the agreement. For purposes of this Form, the percentage of vessel capacity utilization means a party’s total volume of liner cargo, for each of its liner services that would fall under the agreement, carried on any vessel space counted under part 4(A) of this section, divided by its total vessel capacity as defined and derived in part 4(A) of this section, which quotient is multiplied by 100.
Provide a narrative statement on any significant changes, anticipated or planned for when the agreement goes into effect, in the amounts of vessel capacity for the parties’ liner services that would fall under the agreement within the entire geographic scope of the agreement. Specifically, explain the nature of and reasons for the significant change and its effects on the liner service and the total amount of vessel capacity for such service that would be subject to the change. For purposes of this part, a significant change refers to the removal from or addition to a liner service of vessels or vessel space for a fixed, seasonally planned, or indefinite period of time. A significant change excludes instances when vessels may be temporarily repositioned or shifted from one service to another, or when vessel space may be temporarily altered, or when vessels are removed from a liner service and vessels of similar capacity are substituted. It also excludes operational changes in vessels or vessel space that would have little or no impact on the amount of vessel capacity offered in a liner service or a trade. If no significant change is anticipated or planned, it shall be noted with the term “none” in response to part 4(C) of this section.
For the same 12-month period used in parts 2 and 3 of this section, provide the number of vessel calls each party made at each port for its liner services that would fall under the agreement within the entire geographic scope of the agreement.
Provide a narrative statement on any significant changes, anticipated or planned for when the agreement goes into effect, in the number of vessel calls at a port for the parties’ liner services that would fall under the agreement within the entire geographic scope of the agreement. Specifically, explain the nature of the significant change and its effect on the frequency of vessel calls at the port for the liner service that would be subject to the change. For purposes of this part, a significant change refers to an increase or decrease in the number of vessel calls at a port for a fixed, seasonally planned, or indefinite period of time. A significant change excludes an incidental or temporary alteration in vessel calls at a port, or an operational change in vessel calls that would have little or no impact on the number of vessel calls at a port. If no significant change is anticipated or planned, it shall be noted with the term “none” in response to part 5(B) of this section.
Section V applies to all agreements identified in 46 CFR 535.502. Parties to such agreements must complete all items in part 1 of this section.
State the name, title, address, telephone and fax numbers, and electronic mail address of a person the Commission may contact regarding the Information Form and any information provided therein.
State the name, title, address, telephone and fax numbers, and electronic mail address of a person the Commission may contact regarding a request for additional information or documents.
A representative of the parties shall sign the Information Form and certify that the information in the Form and all attachments and appendices are, to the best of his or her knowledge, true, correct and complete. The representative also shall indicate his or her relationship with the parties to the agreement.
1. The collection of this information is authorized generally by section 15 of the Shipping Act of 1984 (46 U.S.C. 40104). The submission of this form is mandatory for parties to agreements that contain certain authorities.
2. You are not required to provide information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. The valid control number for this information collection is 3072-0045.
3. The time needed to complete and submit this form will vary depending on individual circumstances. The total estimated average time to complete this form is about 30 hours. This estimate includes reading the instructions, collecting necessary data, and compiling that data.
4. If you have any comments concerning the accuracy of the above estimate or have any suggestions for simplifying the form, please contact Secretary, Federal Maritime Commission, 800 North Capitol Street, NW., Washington, DC 20573-0001; or by e-mail [email protected].
| FMC Form-150 | OMB Control No. 3072-0045 |
List all effective agreements covering all or part of the geographic scope of this agreement, whose parties include one or more of the parties to this agreement.
| This agreement includes: | ||
| (A) Authority to discuss or agree upon rates or charges? | Yes □ | No □ |
| (B) Joint service? | Yes □ | No □ |
| (C) Pooling of cargo traffic or revenues? | Yes □ | No □ |
| (D) Authority to discuss or agree on service contracts and their terms? | Yes □ | No □ |
| (E) Authority to discuss or agree on capacity rationalization? | Yes □ | No □ |
| (F) Conditions or restrictions on the parties’ agreement participation, and/or use or offering of competing services in the geographic scope? | Yes □ | No □ |
| (G) Authority to charter vessel space? | Yes □ | No □ |
| (H) Authority to rationalize sailings or services? | Yes □ | No □ |
| (A) Vessel Capacity [TEUs or other units] | (B) Utilization [percent] | |
|---|---|---|
| Carrier A [Name] | ||
| Liner Service 1 [Name] | XX,XXX | XX |
| Liner Service 2 | XX,XXX | XX |
| Liner Service 3 | XX,XXX | XX |
| Etc. . . . | ||
| Carrier B | ||
| Liner Service 1 | XX,XXX | XX |
| Liner Service 2 | XX,XXX | XX |
| Liner Service 3 | XX,XXX | XX |
| Etc. . . . |
| TEUs [or other units] | Percent | |
|---|---|---|
| Agreement Market Share: | ||
| Line A [Name] | X,XXX | XX |
| Line B | X,XXX | XX |
| Line C | X,XXX | XX |
| Etc. . . . | ||
| Total Agreement | X,XXX | XX |
| Non-Agreement Market Share: | ||
| Line X | X,XXX | XX |
| Line Y | X,XXX | XX |
| Line Z | X,XXX | XX |
| Etc. . . . | ||
| Total Non-Agreement | X,XXX | XX |
| Total Trade [or Sub-Trade] | X,XXX | 100 |
| [Name] | Total revenues | TEUs [or other units] | Average revenue |
|---|---|---|---|
| Carrier A | $ | X,XXX | $ |
| Carrier B | $ | X,XXX | $ |
| Carrier C | $ | X,XXX | $ |
| Etc. . . . |
| [Name] | Carrier A | Carrier B | Etc. . . . |
|---|---|---|---|
| Commodity 1 [Name and 4-Digit Code]: | |||
| TEUs [or other units] | X,XXX | X,XXX | |
| Revenues | $ | $ | |
| Commodity 2: | |||
| TEUs | X,XXX | X,XXX | |
| Revenues | $ | $ | |
| Etc. . . . |
| (A) Vessel capacity [TEUs or other units] | (B) Utilization [percent] | |
|---|---|---|
| Carrier A [Name] | ||
| Liner Service 1 [Name] | XX,XXX | XX |
| Liner Service 2 | XX,XXX | XX |
| Liner Service 3 | XX,XXX | XX |
| Etc. . . . | ||
| Carrier B | ||
| Liner Service 1 | XX,XXX | XX |
| Liner Service 2 | XX,XXX | XX |
| Liner Service 3 | XX,XXX | XX |
| Etc. . . . | ||
| Etc. . . . |
Appendix B to Part 535 – Monitoring Report and Instructions
1. All agreements between or among ocean common carriers identified in 46 CFR 535.702(a) must submit completed Monitoring Reports to the full extent required in sections I through III of this Report. Sections I and II must be completed, as applicable, in accordance with the authority contained in each agreement. Section III must be completed by all agreements subject to Monitoring Report requirements.
2. Where an agreement containing multiple authorities is subject to duplicate reporting requirements in the various sections of this Report, the parties may provide only one response so long as the reporting requirements within each section are fully addressed. The Monitoring Report specifies the data and information which must be reported for each section and the format in which it must be provided. If a party to an agreement is unable to supply a complete response to any item of this Report, that party shall provide either estimated data (with an explanation of why precise data are not available) or a detailed statement of reasons for noncompliance and the efforts made to obtain the required information. For purposes of this Report, if one of the agreement signatories is a joint service operating under an effective agreement, that signatory shall respond to the Report as a single agreement party.
3. For clarification of the agreement terminology used in this Report, the parties may refer to the definitions provided in 46 CFR 535.104. In addition, the following definitions shall apply for purposes of this Report: liner movement means the carriage of liner cargo by liner operators; liner cargo means cargo carried on liner vessels in a liner service; liner operator means a vessel-operating common carrier engaged in liner service; liner vessel means a vessel used in a liner service; liner service means a definite, advertised schedule of sailings at regular intervals; and TEU means a unit of measurement equivalent to one 20-foot shipping container. Further, when used in this Report, the terms “entire geographic scope of the agreement” or “agreement-wide” refer to the combined U.S. inbound trade and/or the combined U.S. outbound trade as such trades apply to the geographic scope of the agreement, as opposed to the term “sub-trade,” which is defined for reporting purposes as the scope of all liner movements between each U.S. port range and each foreign country within the scope of the agreement. Whether required on a combined trade basis or a sub-trade basis, the U.S. inbound trade (or sub-trades) and the U.S. outbound trade (or sub-trades) shall always be stated separately.
Section I applies to agreements, identified in 46 CFR 535.702(a)(1), that contain the authority to discuss or agree on capacity rationalization as defined in 46 CFR 535.104(e). Parties to such agreements must complete parts 1 through 3 of this section.
State the full name of the agreement and the agreement number assigned by the FMC.
1. For the preceding calendar quarter, provide the amount of vessel capacity for each party for each of its liner services that is covered by the agreement within the entire geographic scope of the agreement, stated separately for the U.S. inbound and outbound trades as applicable to the geographic scope of the agreement. For purposes of this Report, vessel capacity means a party’s total commercial liner space on line-haul vessels, whether operated by it or other parties from whom space is obtained, sailing to and/or from the continent of North America for each of its liner services that is covered by the agreement.
2. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was containerized, the amount(s) of vessel capacity for each party shall be reported in TEUs. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was non-containerized, the amount(s) of vessel capacity for each party shall be reported in non-containerized units of measurement. The unit of measurement used in calculating the amounts of non-containerized vessel capacity must be specified clearly and consistently applied.
For the preceding calendar quarter, provide the percentage of vessel capacity utilization for each party for each of its liner services that is covered by the agreement within the entire geographic scope of the agreement, corresponding to the figures used in part 2(A) of this section, stated separately for the U.S. inbound and outbound trades as applicable to the geographic scope of the agreement. For purposes of this Report, the percentage of vessel capacity utilization means a party’s total volume of liner cargo, for each of its liner services that is covered by the agreement, carried on any vessel space counted under part 2(A) of this section, divided by its total vessel capacity as defined and derived in part 2(A) of this section, which quotient is multiplied by 100.
Provide a narrative statement on any significant reductions, to be implemented under the agreement, in the amounts of vessel capacity for the parties’ liner services that are covered by the agreement within the entire geographic scope of the agreement. Specifically, explain the nature of and the reasons for the significant reduction and its effects on the liner service and the total amount of vessel capacity for such service that would be subject to the reduction. The narrative statement for part 2(C) of this section shall be submitted to the Director, Bureau of Trade Analysis, no later than 15 days after a significant reduction in the amount of vessel capacity has been agreed upon by the parties but prior to the implementation of the actual reduction under the agreement. For purposes of this part, a significant reduction refers to the removal from a liner service of vessels or vessel space for a fixed, seasonally planned, or indefinite period of time. A significant reduction excludes instances when vessels may be temporarily repositioned or shifted from one service to another, or when vessel space may be temporarily altered, or when vessels are removed from a liner service and vessels of similar or greater capacity are substituted. It also excludes operational changes in vessels or vessel space that would have little or no impact on the amount of vessel capacity offered in a liner service or a trade.
Excluding those changes already reported in part 2(C) of this section, provide a narrative statement on any other significant changes, implemented under the agreement during the preceding calendar quarter, in the amounts of vessel capacity for the parties’ liner services that are covered by the agreement within the entire geographic scope of the agreement. Specifically, explain the nature of and the reasons for the significant change and its effects on the liner service and the total amount of vessel capacity for such service that was subject to the change. For purposes of this part, a significant change refers to the addition to a liner service of vessels or vessel space for a fixed, seasonally planned, or indefinite period of time. A significant change excludes instances when vessels were temporarily repositioned or shifted from one service to another, or when vessel space was temporarily altered, or when vessels were removed from a liner service and vessels of similar capacity were substituted. It also excludes operational changes in vessels or vessel space that had little or no impact on the amount of vessel capacity offered in a liner service or a trade. If no significant change was implemented, it shall be noted with the term “none” in response to part 2(D) of this section.
Provide a narrative statement on any significant changes, implemented under the agreement during the calendar quarter, in the number of vessel calls at a port for the parties’ liner services that are covered by the agreement within the entire geographic scope of the agreement. Specifically, explain the nature of the significant change and its effect on the frequency of vessel calls at the port for the liner service that was subject to the change. For purposes of this part, a significant change refers to an increase or a decrease in the number of vessel calls at a port for a fixed, seasonally planned, or indefinite period of time. A significant change excludes an incidental or temporary alteration in the number of vessel calls at a port, or an operational change in vessel calls that had little or no impact on the number of vessel calls at a port. If no significant change was implemented, it shall be noted with the term “none” in response to part 3 of this section.
Section II applies to agreements, identified in 46 CFR 535.702(a)(2), where the parties to the agreement hold a combined market share, based on cargo volume, of 35 percent or more in the entire U.S. inbound or outbound geographic scope of the agreement and the agreement contains any of the following authorities: a) the discussion of, or agreement upon, whether on a binding basis under a common tariff or a non-binding basis, any kind of rate or charge; b) the establishment of a joint service; c) the pooling or division of cargo traffic, earnings, or revenues and/or losses; or d) the discussion of, or agreement on, any service contract matter. Parties to such agreements must complete parts 1 through 6 of this section.
State the full name of the agreement and the agreement number assigned by the FMC.
1. For the preceding calendar quarter, provide the market shares of all liner operators for the entire geographic scope of the agreement and in each sub-trade within the scope of the agreement. A joint service shall be treated as a single liner operator, whether it is an agreement line or a non-agreement line. Sub-trade is defined as the scope of all liner movements between each U.S. port range within the scope of the agreement and each foreign country within the scope of the agreement. Where the agreement covers both U.S. inbound and outbound liner movements, inbound and outbound market shares shall be shown separately.
2. U.S. port ranges are defined as follows:
a. Atlantic and Gulf – Includes ports along the eastern seaboard and the Gulf of Mexico from the northern boundary of Maine to Brownsville, Texas. Also includes all ports bordering upon the Great Lakes and their connecting waterways, all ports in the State of New York on the St. Lawrence River, and all ports in Puerto Rico and the U.S. Virgin Islands.
b. Pacific – Includes all ports in the States of Alaska, Hawaii, California, Oregon, and Washington. Also includes all ports in Guam, American Samoa, Northern Marianas, Johnston Island, Midway Island, and Wake Island.
3. An application may be filed for a waiver of the definition of “sub-trade” under the procedures described in 46 CFR 535.705. In any such application, the burden shall be on the parties to show that their marketing and pricing practices have been done by ascertainable multi-country regions rather than by individual countries or, in the case of the United States, by broader areas than the port ranges defined herein. The Commission will also consider whether the alternative definition of “sub-trade” requested by the waiver application is reasonably consistent with the definition of “sub-trade” applied in the original Information Form for the agreement.
4. The formula for calculating market share in the entire agreement scope or in a sub-trade is as follows: The total amount of liner cargo carried on each liner operator’s liner vessels in the entire agreement scope or in the sub-trade during the most recent calendar quarter for which complete data are available, divided by the total liner movements in the entire agreement scope or in the sub-trade during the same calendar quarter, which quotient is multiplied by 100. The market shares held by non-agreement lines as well as by agreement lines must be provided, stated separately in the format indicated.
5. If 50 percent or more of the total liner cargo carried by the parties in the entire agreement scope during the calendar quarter was containerized, only containerized liner movements (measured in TEUs) must be used for determining market share. If 50 percent or more of the total liner cargo carried by the parties was non-containerized, only non-containerized liner movements must be used for determining market share. The unit of measurement used in calculating amounts of non-containerized cargo must be specified clearly and applied consistently.
1. For the preceding calendar quarter, provide each party’s total liner revenues in the entire geographic scope of the agreement, total liner cargo carried in the entire geographic scope of the agreement, and average revenue. For purposes of this Report, total liner revenues means the total revenues, in U.S. dollars, of each party corresponding to its total cargo carried for its liner services that fall under the agreement, inclusive of all ocean freight charges, whether assessed on a port-to-port basis or a through intermodal basis; accessorial charges; surcharges; and charges for inland cargo carriage. Average revenue shall be calculated as the quotient of each party’s total liner revenues in the entire geographic scope divided by its total cargo carried in the entire geographic scope.
2. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was containerized, each party shall report only its total carryings of containerized liner cargo (measured in TEUs) during the calendar quarter, total revenues generated by its carriage of containerized liner cargo, and average revenue per TEU. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was non-containerized, each party shall report only its total carryings of non-containerized liner cargo during the calendar quarter (specifying the unit of measurement used), total revenues generated by its carriage of non-containerized liner cargo, and average revenue per unit of measurement. When the agreement covers both U.S. inbound and outbound liner movements, inbound and outbound data shall be stated separately.
For the preceding calendar quarter, provide a list, for the entire geographic scope of the agreement, of the top 10 liner commodities (including commodities not subject to tariff publication) carried by all the parties for their liner services that fall under the agreement. For purposes of this Report, commodities shall be identified at the 4-digit level of customarily used commodity coding schedules. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was containerized, this list shall include only containerized commodities. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was non-containerized, this list shall include only non-containerized commodities. When the agreement covers both U.S. inbound and outbound liner movements, inbound and outbound data shall be stated separately.
For the preceding calendar quarter, provide the cargo volume and revenue results for each party for each of the major commodities listed in part 4(A) of this section, corresponding to the same unit of measurement used. For purposes of this Report, revenue results means the revenues, in U.S. dollars, earned by each party on the cargo volume of each major commodity listed in part 4(A) of this section, inclusive of all ocean freight charges, whether assessed on a port-to-port basis or a through intermodal basis; accessorial charges; surcharges; and charges for inland cargo carriage. If a party has no cargo volume and revenue results for a commodity listed in part 4(A) of this section, it shall be noted by using a zero for that party in response to part 4(B) of this section.
For the preceding calendar quarter, provide the amount of vessel capacity for each party for each of its liner services that falls under the agreement within the entire geographic scope of the agreement, stated separately for the U.S. inbound and outbound trades as applicable to the geographic scope of the agreement. For purposes of this Report, vessel capacity means a party’s total commercial liner space on line-haul vessels, whether operated by it or other parties from whom space is obtained, sailing to and/or from the continent of North America for each of its liner services that falls under the agreement. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was containerized, the amount(s) of vessel capacity for each party shall be reported in TEUs. When 50 percent or more of the total liner cargo carried by all the parties in the geographic scope of the agreement during the calendar quarter was non-containerized, the amount(s) of vessel capacity for each party shall be reported in non-containerized units of measurement. The unit of measurement used in calculating the amounts of non-containerized vessel capacity must be specified clearly and consistently applied.
For the preceding calendar quarter, provide the percentage of vessel capacity utilization for each party for each of its liner services that falls under the agreement within the entire geographic scope of the agreement, corresponding to the figures used in part 5(A) of this section, stated separately for the U.S. inbound and outbound trades as applicable to the geographic scope of the agreement. For purposes of this Report, the percentage of vessel capacity utilization means a party’s total volume of liner cargo, for each of its liner services that falls under the agreement, carried on any vessel space counted under part 5(A) of this section, divided by its total vessel capacity as defined and derived in part 5(A) of this section, which quotient is multiplied by 100.
Provide a narrative statement on any significant changes in the amount of vessel capacity that occurred during the preceding calendar quarter for the parties’ liner services that fall under the agreement within the entire geographic scope of the agreement. Specifically, explain the nature of and the reasons for the significant change and its effects on the liner service and the total amount of vessel capacity for such service that was subject to the change. For purposes of this part, a significant change refers to the removal from or addition to a liner service of vessels or vessel space for a fixed, seasonally planned, or indefinite period of time. A significant change would exclude instances when vessels were temporarily repositioned or shifted from one service to another, or when vessel space was temporarily altered, or when vessels were removed from a liner service and vessels of similar capacity were substituted. It also excludes operational changes in vessels and vessel space that had little or no impact on the amount of vessel capacity offered in a liner service or a trade. If no significant change occurred during the calendar quarter, it shall be noted with the term “none” in response to part 5(C) of this section.
Provide a narrative statement on any significant changes in the number of vessel calls at a port that occurred during the preceding calendar quarter for the parties’ liner services that fall under the agreement within the entire geographic scope of the agreement. Specifically, explain the nature of the significant change and its effect on the frequency of vessel calls at the port for the liner service that was subject to the change. For purposes of this part, a significant change refers to an increase or a decrease in the number of vessel calls at a port for a fixed, seasonally planned, or indefinite period of time. A significant change excludes an incidental or temporary alteration in the number of vessel calls at a port, or an operational change in vessel calls that had little or no impact on the number of vessel calls at a port. If no significant change occurred during the calendar quarter, it shall be noted with the term “none” in response to part 6 of this section.
Section III applies to all agreements identified in 46 CFR 535.702(a). Parties to such agreements must complete all items in part 1 of this section.
State the name, title, address, telephone and fax numbers, and electronic mail address of a person the Commission may contact regarding the Monitoring Report and any information provided therein.
A representative of the parties shall sign the Monitoring Report and certify that the information in the Report and all attachments and appendices are, to the best of his or her knowledge, true, correct and complete. The representative also shall indicate his or her relationship with the parties to the agreement.
1. The collection of this information is authorized generally by section 15 of the Shipping Act of 1984 (46 U.S.C. 40104). The submission of this form is mandatory for parties to agreements that contain certain authorities.
2. You are not required to provide information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. The valid control number for this information collection is 3072-0045.
3. The time needed to complete and submit this form will vary depending on individual circumstances. The total estimated average time to complete this form is about 63.5 hours. This estimate includes reading the instructions, collecting necessary data, and compiling that data.
4. If you have any comments concerning the accuracy of the above estimate or have any suggestions for simplifying the form, please contact Secretary, Federal Maritime Commission, 800 North Capitol Street, NW., Washington, DC 20573-0001; or by e-mail [email protected].
| FMC Form-151 | OMB Control No. 3072-0045 |
| (A) Vessel capacity [TEUs or other units] | (B) Utilization [percent] | |
|---|---|---|
| Carrier A [Name]: | ||
| Liner Service 1 [Name] | XX,XXX | XX |
| Liner Service 2 | XX,XXX | XX |
| Liner Service 3 | XX,XXX | XX |
| Etc. . . . | ||
| Carrier B: | ||
| Liner Service 1 | XX,XXX | XX |
| Liner Service 2 | XX,XXX | XX |
| Liner Service 3 | XX,XXX | XX |
| Etc. . . . | ||
| Etc. . . . |
| TEUs [or other units] | Percent | |
|---|---|---|
| Agreement Market Share: | ||
| Line A [Name] | X,XXX | XX |
| Line B | X,XXX | XX |
| Line C | X,XXX | XX |
| Etc. . . . | ||
| Total Agreement | X,XXX | XX |
| Non-Agreement Market Share: | ||
| Line X | X,XXX | XX |
| Line Y | X,XXX | XX |
| Line Z | X,XXX | XX |
| Etc. . . . | ||
| Total Non-Agreement | X,XXX | XX |
| Total Trade [or Sub-Trade] | X,XXX | 100 |
| [Name] | Total revenues | TEUs [or other units] | Average revenue |
|---|---|---|---|
| Carrier A | $ | X,XXX | $ |
| Carrier B | $ | X,XXX | $ |
| Carrier C | $ | X,XXX | $ |
| Etc. . . . |
| [Name] | Carrier A | Carrier B | Etc. . . |
|---|---|---|---|
| Commodity 1 [Name and 4-Digit Code]: | |||
| TEUs [or other units] | X,XXX | X,XXX | |
| Revenues | $ | $ | |
| Commodity 2: | |||
| TEUs | X,XXX | X,XXX | |
| Revenues | $ | $ | |
| Etc. . . . |
| (A) Vessel capacity [TEUs or other units] | (B) Utilization [percent] | |
|---|---|---|
| Carrier A [Name]: | ||
| Liner Service 1 [Name] | XX,XXX | XX |
| Liner Service 2 | XX,XXX | XX |
| Liner Service 3 | XX,XXX | XX |
| Etc. . . . | ||
| Carrier B: | ||
| Liner Service 1 | XX,XXX | XX |
| Liner Service 2 | XX,XXX | XX |
| Liner Service 3 | XX,XXX | XX |
| Etc. . . . | ||
| Etc. . . . |
PART 540 – PASSENGER VESSEL FINANCIAL RESPONSIBILITY
Subpart A – Proof of Financial Responsibility, Bonding and Certification of Financial Responsibility for Indemnification of Passengers for Nonperformance of Transportation
§ 540.1 Scope.
(a) The regulations contained in this subpart set forth the procedures whereby persons in the United States who arrange, offer, advertise or provide passage on a vessel having berth or stateroom accommodations for 50 or more passengers and embarking passengers at U.S. ports shall establish their financial responsibility or, in lieu thereof, file a bond or other security for obligations under the terms of ticket contracts to indemnify passengers for nonperformance of transportation to which they would be entitled. Included also are the qualifications required by the Commission for issuance of a Certificate (Performance) and the basis for the denial, revocation, modification, or suspension of such Certificates.
(b) Failure to comply with this part may result in denial of an application for a certificate. Vessels operating without the proper certificate may be denied clearance by the Department of Homeland Security and their owners may also be subject to a civil penalty of not more than $5,000 in addition to a civil penalty of $200 for each passage sold, such penalties to be assessed by the Federal Maritime Commission (46 U.S.C. 44101-44106, 60105).
§ 540.2 Definitions.
As used in this subpart, the following terms shall have the following meanings:
(a) Person includes individuals, limited liability companies, corporations, partnerships, associations, and other legal entities existing under or authorized by the laws of the United States or any State thereof or the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands or any territory or possession of the United States, or the laws of any foreign country.
(b) Vessel means any commercial vessel having berth or stateroom accommodations for 50 or more passengers and embarking passengers at U.S. ports.
(c) Commission means the Federal Maritime Commission.
(d) United States includes the Commonwealth of Puerto Rico, the Virgin Islands or any territory or possession of the United States.
(e) Berth or stateroom accommodation or passenger accommodations includes all temporary and all permanent passenger sleeping facilities.
(f) Certificate (Performance) means a Certificate of Financial Responsibility for Indemnification of Passengers for Nonperformance of Transportation issued pursuant to this subpart.
(g) Passenger means any person who is to embark on a vessel at any U.S. port and who has paid any amount for a ticket contract entitling him to water transportation.
(h) Passenger revenue means those monies wherever paid by passengers who are to embark at any U.S. port for water transportation and all other accommodations, services and facilities relating thereto.
(i) Unearned Passenger Revenue means: (1) Passenger revenue received for water transportation and all other accommodations, services, and facilities that have not been performed by the PVO. Passenger revenue includes port fees, taxes, and all ancillary fees remitted to the PVO by the passenger;
(2) From March 17, 2022 through March 17, 2024, for small businesses that operate in deep sea waters and have 1,500 or fewer employees or operate exclusively in coastal, Great Lakes, and inland water ways and have 500 or fewer employees, Unearned Passenger Revenue means passenger revenue received for water transportation and all other accommodations, services, and facilities relating thereto not yet performed; this includes port fees and taxes paid, but excludes such items as airfare, hotel accommodations, and tour excursions.
(j) Insurer means any insurance company, underwriter, corporation, or association or underwriters, ship owners’ protection and indemnity association, or other insurer acceptable to the Commission.
(k) Evidence of insurance means a policy, certificate of insurance, cover note, or other evidence of coverage acceptable to the Commission.
(l) Whole-ship charter means an arrangement between a passenger vessel operator and a corporate or institutional entity:
(1) Which provides for the purchase of all the passenger accommodations on a vessel for a particular voyage or series of voyages; and
(2) Whereby the involved corporate or institutional entity provides such accommodations to the ultimate passengers free of charge and such accommodations are not resold to the public.
(m) Nonperformance of transportation means cancelling or delaying a voyage by three (3) or more calendar days, if the passenger elects not to embark on the delayed voyage or a substitute voyage offered by the passenger vessel operator.
§ 540.3 Proof of financial responsibility, when required.
No person in the United States may arrange, offer, advertise or provide passage on a vessel unless a Certificate (Performance) has been issued to or covers such person.
§ 540.4 Procedure for establishing financial responsibility.
(a) In order to comply with section 3 of Public Law 89-777 (46 U.S.C. 44101-44102, 44104-44106) enacted November 6, 1966, there must be filed with the Federal Maritime Commission an application on Form FMC-131 for a Certificate of Financial Responsibility for Indemnification of Passengers for Nonperformance of Transportation. Copies of Form FMC-131 may be obtained from the Commission’s Web site at http://www.fmc.gov, or from the Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573.
(b) An application for a Certificate (Performance) shall be filed with the Bureau of Certification and Licensing, Federal Maritime Commission, by the vessel owner or charterer at least 60 days in advance of the arranging, offering, advertising, or providing of any water transportation or tickets in connection therewith except that any person other than the owner or charterer who arranges, offers, advertises, or provides passage on a vessel may apply for a Certificate (Performance). Late filing of the application will be permitted without penalty only for good cause shown.
(c) All applications and evidence required to be filed with the Commission shall be in English, and any monetary terms shall be expressed in terms of U.S. currency.
(d) The Commission shall have the privilege of verifying any statements made or any evidence submitted under the rules of this subpart.
(e) An application for a Certificate (Performance), excluding an application for the addition or substitution of a vessel to the applicant’s fleet, must be accompanied by a filing fee remittance of $4,332. An application for a Certificate (Performance) for the addition or substitution of a vessel to the applicant’s fleet must be accompanied by a filing fee remittance of $2,180. Administrative changes, such as the renaming of a vessel will not incur any additional fees.
(f) The application shall be signed by a duly authorized officer or representative of the applicant with a copy of evidence of his or her authority.
(g) In the event of any material change in the facts as reflected in the application, an amendment to the application shall be filed no later than fifteen (15) days following such change. For the purpose of this subpart, a material change shall be one which:
(1) Results in a decrease in the amount submitted to establish financial responsibility to a level below that required to be maintained under the rules of this subpart, or
(2) Requires that the amount to be maintained be increased above the amount submitted to establish financial responsibility.
(h) Notice of the application for issuance, denial, revocation, suspension, or modification of any such Certificate will be published on the Commission’s web site at http://www.fmc.gov.
§ 540.5 Insurance, guaranties, and escrow accounts.
Except as provided in § 540.9(j), the amount of coverage required under this section and § 540.6(b) shall be in an amount determined by the Commission to be no less than 110 percent of the unearned passenger revenue of the applicant on the date within the two fiscal years immediately prior to the filing of the application which reflects the greatest amount of unearned passenger revenue. The Commission, for good cause shown, may consider a time period other than the previous two-fiscal-year requirement in this section or other methods acceptable to the Commission to determine the amount of coverage required. Evidence of adequate financial responsibility for the purposes of this subpart may be established by one or a combination (including § 540.6 Surety Bonds) of the following methods:
(a) Filing with the Commission evidence of insurance, issued by an insurer, providing coverage for indemnification of passengers in the event of the nonperformance of water transportation.
(1) Termination or cancellation of the evidence of insurance, whether by the assured or by the insurer, and whether for nonpayment of premiums, calls or assessments or for other cause, shall not be effected: (i) Until notice in writing has been given to the assured or to the insurer and to the Bureau of Certification and Licensing at its office in Washington, DC 20573, by certified mail or courier service, (ii) until after 30 days expire from the date notice is actually received by the Commission, or until after the Commission revokes the Certificate (Performance), whichever occurs first. Notice of termination or cancellation to the assured or insurer shall be simultaneous to such notice given to the Commission. The insurer shall remain liable for claims covered by said evidence of insurance arising by virtue of an event which had occurred prior to the effective date of said termination or cancellation. No such termination or cancellation shall become effective while a voyage is in progress.
(2) The insolvency or bankruptcy of the assured shall not constitute a defense to the insurer as to claims included in said evidence of insurance and in the event of said insolvency or bankruptcy, the insurer agrees to pay any unsatisfied final judgments obtained on such claims.
(3) No insurance shall be acceptable under these rules which restricts the liability of the insurer where privity of the owner or charterer has been shown to exist.
(4) Paragraphs (a)(1) through (a)(3) of this section shall apply to the guaranty as specified in paragraph (c) of this section.
(b) Filing with the Commission evidence of an escrow account, acceptable to the Commission, for indemnification of passengers in the event of nonperformance of water transportation. Parties filing escrow agreements for Commission approval may execute such agreements in the form set forth in appendix A of subpart A of this part.
(c) Filing with the Commission a guaranty on Form FMC-133A, by a Protection and Indemnity Association with established assets, reserves and reinsurance acceptable to the Commission, for indemnification of passengers in the event of nonperformance of water transportation. The requirements of Form FMC-133A, however, may be amended by the Commission in a particular case for good cause. Copies of Form FMC-133A may be obtained from the Commission’s Web site at http://www.fmc.gov or from the Bureau of Certification and Licensing.
(d) Revenues derived from whole-ship charters, as defined in § 540.2(l), may be exempted from consideration as unearned passenger revenues, on condition that, in the case of a new operator or within 30 days of the execution of the whole-ship charter if the operator has a Performance Certificate for the vessel in question: (1) A certified true copy of the contract or charter is furnished with the application; (2) The chartering party attests that it will redistribute the vessel’s passenger accommodations without charge; and (3) A document executed by the chartering party’s Chief Executive Officer or other responsible corporate officer is submitted by which the chartering party specifically acknowledges that its rights to indemnification under section 3 of Public Law 89-777 (46 U.S.C. 44101-44102, 44104-44106) may be affected by the reduction in section 3, Public Law 89-777, financial responsibility coverage attributable to the exclusion of such funds from the operator’s UPR.
§ 540.6 Surety bonds.
(a) Where financial responsibility is not established under § 540.5, a surety bond shall be filed on Form FMC-132A. Such surety bond shall be issued by a bonding company authorized to do business in the United States and acceptable to the Commission for indemnification of passengers in the event of nonperformance of water transportation. The requirements of Form FMC-132A, however, may be amended by the Commission in a particular case for good cause. Copies of Form FMC-132A may be obtained from the Commission’s Web site at http://www.fmc.gov or from the Bureau of Certification and Licensing.
(b) In the case of a surety bond which is to cover all passenger operations of the applicant subject to these rules, such bond shall be in an amount calculated as in the introductory text of § 540.5.
(c) In the case of a surety bond which is to cover an individual voyage, such bond shall be in an amount determined by the Commission to equal the gross passenger revenue for that voyage.
(d) The liability of the surety under the rules of this subpart to any passenger shall not exceed the amount paid by any such passenger, except that, no such bond shall be terminated while a voyage is in progress.
§ 540.7 Evidence of financial responsibility.
Where satisfactory proof of financial responsibility has been established:
(a) A Certificate (Performance) covering specified vessels shall be issued evidencing the Commission’s finding of adequate financial responsibility to indemnify passengers for nonperformance of water transportation.
(b) The period covered by the Certificate (Performance) shall be five (5) years, unless another termination date has been specified thereon.
§ 540.8 Denial, revocation, suspension, or modification.
(a) Prior to the denial, revocation, suspension, or modification of a Certificate (Performance), the Commission shall notify the applicant of its intention to deny, revoke, suspend, or modify and shall include with the notice the reason(s) for such action. If the applicant, within 20 days after the receipt of such notice, requests a hearing to show that the evidence of financial responsibility filed with the Commission does meet the rules of this subpart, such hearing shall be granted by the Commission. Regardless of a hearing, a Certificate (Performance) shall become null and void upon cancellation or termination of the surety bond, evidence of insurance, guaranty, or escrow account.
(b) A Certificate (Performance) may be denied, revoked, suspended, or modified for any of the following reasons:
(1) Making any willfully false statement to the Commission in connection with an application for a Certificate (Performance);
(2) Circumstances whereby the party does not qualify as financially responsible in accordance with the requirements of the Commission;
(3) Failure to comply with or respond to lawful inquiries, requests for information, rules, regulations, or orders of the Commission pursuant to the rules of this subpart.
(c) If the applicant, within 20 days after notice of the proposed denial, revocation, suspension, or modification under paragraph (b) of this section, requests a hearing to show that such denial, revocation, suspension, or modification should not take place, such hearing shall be granted by the Commission.
§ 540.9 Miscellaneous.
(a) If any evidence filed with the application does not comply with the requirements of this subpart, or for any reason fails to provide adequate or satisfactory protection to the public, the Commission will notify the applicant stating the deficiencies thereof.
(b) Any financial evidence submitted to the Commission under the rules of this subpart shall be written in the full and correct name of the person to whom the Certificate (Performance) is to be issued, and in case of a partnership, all partners shall be named.
(c) The Commission’s bond (Form FMC-132A), guaranty (Form FMC-133A), and application (Form FMC-131) forms may be obtained from the Commission’s Web site at http://www.fmc.gov or from the Bureau of Certification and Licensing at its office in Washington, DC 20573.
(d) Any securities or assets accepted by the Commission (from applicants, insurers, guarantors, escrow agents, or others) under the rules of this subpart must be physically located in the United States.
(e) Each applicant, insurer, escrow agent and guarantor shall furnish a written designation of a person in the United States as legal agent for service of process for the purposes of the rules of this subpart. Such designation must be acknowledged, in writing, by the designee and filed with the Commission. In any instance in which the designated agent cannot be served because of death, disability, or unavailability, the Secretary, Federal Maritime Commission, will be deemed to be the agent for service of process. A party serving the Secretary in accordance with the above provision must also serve the certificant, insurer, escrow agent, or guarantor, as the case may be, by certified mail or courier service at the last known address of them on file with the Commission.
(f) Process for obtaining refunds from the financial instrument in the event of nonperformance. (1) The passenger must make a written request for a refund from the PVO in accordance with the respective PVO’s claims procedure.
(2) In the event the passenger is unable to resolve the claim within 180 days, or such shorter claim resolution period for which the PVO’s claims procedure provides, after nonperformance of transportation occurs or if the claim is denied by the PVO, the passenger may submit a claim against the financial instrument as per instructions on the Commission website. The claim may include a copy of the boarding pass, proof and amount of payment, the cancellation or delay notice, and dated proof of properly filed claim against the PVO or written notification as required in paragraph (f)(1) of this section. All documentation must clearly display the vessel and voyage with the scheduled and actual date of sailing.
(3) Nothing in this rule shall be interpreted to preclude the consumer and the PVO from entering into an alternative form of compensation in full satisfaction of a required refund, such as a future cruise credit.
(g) Financial data filed in connection with the rules of this subpart shall be confidential except in instances where information becomes relevant in connection with hearings which may be requested by applicant pursuant to § 540.8 (a) or (b).
(h) Every person who has been issued a Certificate (Performance) must submit to the Commission a semi-annual statement of any changes with respect to the information contained in the application or documents submitted in support thereof or a statement that no changes have occurred. Negative statements are required to indicate no change. These statements must cover the 6-month period of January through June and July through December and include a statement of the highest unearned passenger vessel revenue accrued for each month in the 6-month reporting period as well as any instances of nonperformance of transportation. Such statements will be due within 30 days after the close of every such 6-month period. The reports required by this paragraph shall be submitted to the Bureau of Certification and Licensing at its office in Washington, DC by certified mail, courier service, or electronic submission.
(i) Information on How to Obtain Refunds. (1) PVOs shall provide on their websites clear instructions on how passengers may obtain refunds in the event of nonperformance of transportation; and
(2) PVOs shall submit an active web page address with their refund instructions for nonperformance of transportation to the Commission for publication on the Commission’s website.
(3) Form FMC-131 “Application for Certificate of Financial Responsibility” will include a required field for PVOs to provide the web page address of their refund instructions for nonperformance of transportation.
(j) The amount of: the insurance as specified in § 540.5(a), the escrow account as specified in § 540.5(b), the guaranty as specified in § 540.5(c), or the surety bond as specified in § 540.6 shall not be required to exceed $15 million for one year after April 2, 2013. Twelve (12) months after April 2, 2013, the amount shall not exceed $22 million, and twenty four (24) months after April 2, 2013, the amount shall not exceed $30 million. Every two years, on the anniversary after the cap on required financial responsibility reaches $30 million, the cap shall automatically adjust to the nearest $1 million based on changes as reflected in the U.S. Bureau of Labor Statistics’ Consumer Price Index. The Bureau of Certification and Licensing will determine the amount of each adjustment and transmit that information to the Secretary of the Federal Maritime Commission for publication on the Commission’s Web site (www.fmc.gov) and in the
(k) Every person in whose name a Certificate (Performance) has been issued shall be deemed to be responsible for any unearned passage money or deposits held by its agents or any other person authorized by the certificant to sell the certificant’s tickets. Certificants shall promptly notify the Commission of any arrangements, including charters and subcharters, made by it or its agent with any person pursuant to which the certificant does not assume responsibility for all passenger fares and deposits collected by such person or organization and held by such person or organization as deposits or payment for services to be performed by the certificant. If responsibility is not assumed by the certificant, the certificant also must inform such person or organization of the certification requirements of Public Law 89-777 and not permit use of its vessel, name or tickets in any manner unless and until such person or organization has obtained the requisite Certificate (Performance) from the Commission. Failure to follow the procedures in this paragraph means the certificant shall retain full financial responsibility for indemnification of passengers for nonperformance of the transportation.
(l) Requests to substitute alternative financial responsibility. (1) A certificant whose unearned passenger revenue at no time for the two immediately prior fiscal years has exceeded 150% of the required cap may submit a request to the Director, Bureau of Certification and Licensing, to substitute alternative forms of financial protection to evidence the financial responsibility as otherwise provided in this part.
(2) The Commission will consider such requests on a case-by-case basis.
(3) The request must include copies of the requesting PVO’s most recently available annual and quarterly financial and income statements. Other documents and information in support of its request may also be submitted.
(4) For requests based upon the already existing protections available to credit card purchases of passenger vessel transportation, the requesting PVO must supply the following information for the most recent twelve months preceding the request: Total deposits and payments received for passenger vessel transportation; Credit card receipt totals; Copy of the PVO’s policy(ies) governing payments by passengers (i.e., deposits and the number of days prior to sailing the passenger must make final payment).
(5) In determining whether and to what level to reduce the required amount, the Commission may consider the extent to which other statutory requirements provide relevant protections, the certificant’s financial data, and other specific facts and circumstances.
(6) For PVOs with payment policies that provide for final payment for the passenger vessel transportation no later than 60 days before the vessel’s sailing date, requests based upon credit card receipts may be granted by the Commission permitting a reduction in the financial responsibility otherwise required under this Part. The amount of such a reduction will be established by determining the proportion that the PVO’s total credit card receipts bears to its total receipts and applying one half of that percentage to the PVO’s highest two-year UPR.
(7) The Bureau of Certification and Licensing may request additional information as may assist it in considering the request.
(8) Where a request is granted, the alternative financial responsibility shall remain in effect until the PVO’s Certificate (Performance) expires under § 540.7(b) or until the Director, Bureau of Certification and Licensing determines otherwise based upon changing information pursuant to this paragraph or paragraph (l)(5) of this section. Additional information may be requested at any time by the Commission or BCL from a PVO whose request under this section has been granted.
Form FMC-132A to Subpart A of Part 540
Know all persons by these presents, that we __________ (Name of applicant), of (City), __________ (State and country), as Principal (hereinafter called Principal), and __________ (Name of surety), a company created and existing under the laws of __________ (State and country) and authorized to do business in the United States as Surety (hereinafter called Surety) are held and firmly bound unto the United States of America in the penal sum of __________, for which payment, well and truly to be made, we bind ourselves and our heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents. Whereas the Principal intends to become a holder of a Certificate (Performance) pursuant to the provisions of 46 CFR part 540, subpart A, and has elected to file with the Federal Maritime Commission (Commission) such a bond to insure financial responsibility and the supplying transportation and other services subject to 46 CFR part 540, subpart A.
Whereas this bond is written to assure compliance by the Principal as an authorized holder of a Certificate (Performance) pursuant to subpart A of part 540 of title 46, Code of Federal Regulations, and shall inure to the benefit of any and all passengers to whom the Principal may be held legally liable for any of the damages herein described. Now, therefore, the condition of this obligation is such that if the Principal shall pay or cause to be paid to passengers any sum or sums for which the Principal may be held legally liable by reason of the Principal’s failure faithfully to provide such transportation and other accommodations and services 46 CFR 540, Subpart A made by the Principal and the passenger while this bond is in effect for the supplying of transportation and other services pursuant to and in accordance with the provisions of subpart A of part 540 of title 46, Code of Federal Regulations, then this obligation shall be void, otherwise, to remain in full force and effect. Whereas this bond is written to assure compliance by the Principal as an authorized holder of a Certificate (Performance) pursuant to 46 CFR part 540, subpart A, and shall inure to the benefit of any and all passengers to whom the Principal may be held legally liable for any of the damages herein described. Now, Therefore, the condition of this obligation is that the penalty amount of this bond shall be available to pay damages made pursuant to passenger claims, if:
(1) The passenger makes a request for refund from the Principal in accordance with the ticket contract.
(2) In the event the passenger is unable to resolve the claim within 180 days, or such shorter claim resolution period for which the PVO’s claims procedure provides, after nonperformance of transportation occurs or if the claim is denied by the PVO, the passenger may submit a claim against the bond as per instructions on the Commission’s website. The claim may include a copy of the boarding pass, proof and amount of payment, cancellation notice, and dated proof of properly filed claim against the Principal. All documentation must clearly display the vessel and voyage with scheduled and actual date of sailing. And, Surety reserves the discretion to require a judgement prior to resolving the claim.
(3) Valid claims must be paid within 90 days of submission to the Surety.
The liability of the Surety with respect to any passenger shall not exceed the passage price paid by or on behalf of such passenger. The liability of the Surety shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall amount in the aggregate to the penalty of the bond, but in no event shall the Surety’s obligation hereunder exceed the amount of said penalty. The Surety agrees to furnish written notice to the Federal Maritime Commission forthwith of all suits filed, judgments rendered, and payments made by said Surety under this bond.
This bond is effective the ____ day of ________, 20 __, 12:01 a.m., standard time at the address of the Principal as stated herein and shall continue in force until terminated as hereinafter provided. The Principal or the Surety may at any time terminate this bond by written notice sent by certified mail, courier service, or other electronic means such as email and fax to the other and to the Federal Maritime Commission at its office in Washington, DC, such termination to become effective thirty (30) days after actual receipt of said notice by the Commission, except that no such termination shall become effective while a voyage is in progress. The Surety shall not be liable hereunder for any refunds due under ticket contracts made by the Principal for the supplying of transportation and other services after the termination of this bond as herein provided, but such termination shall not affect the liability of the Surety hereunder for refunds arising from ticket contracts made by the Principal for the supplying of transportation and other services prior to the date such termination becomes effective.
The underwriting Surety will promptly notify the Director, Bureau of Certification and Licensing, Federal Maritime Commission, Washington, DC 20573, of any claim(s) or disbursements against this bond.
In witness whereof, the said Principal and Surety have executed this instrument on ____ day of ________, 20 __.
Only corporations or associations of individual insurers may qualify to act as surety, and they must establish to the satisfaction of the Federal Maritime Commission legal authority to assume the obligations of surety and financial ability to discharge them.
Form FMC-133A to Subpart A of Part 540
1. Whereas ________ (Name of applicant) (Hereinafter referred to as the “Applicant”) is the Owner or Charterer of the passenger Vessel(s) specified in the annexed Schedule (“the Vessels”’), which are or may become engaged in voyages to or from United States ports, and the Applicant desires to establish its financial responsibility in accordance with 46 CFR part 540, subpart A, provided that the Federal Maritime Commission (“FMC”) shall have accepted, as sufficient for that purpose, the Applicant’s application, supported by this Guaranty, and provided that FMC shall issue to the Applicant a Certificate (Performance) (“Certificate”), the undersigned Guarantor hereby guarantees to discharge the Applicant’s legal liability to indemnify the passengers of the Vessels for nonperformance of transportation within the meaning of 46 CFR part 540.2, in the event that:
(1) The passenger makes a request for refund from the Principal in accordance with the ticket contract.
(2) In the event the passenger is unable to resolve the claim within 180 days, or such shorter claim resolution period for which the PVO’s claims procedure provides, after nonperformance of transportation occurs or if the claim is denied by the PVO, the passenger may submit a claim against the Guaranty as per instructions on the Commission website. The claim may include a copy of the boarding pass, proof and amount of payment, cancellation notice, and dated proof of properly filed claim against the Principal. All documentation must clearly display the vessel and voyage with scheduled and actual date of sailing. And, Guarantor reserves the discretion to require a judgement prior to resolving the claim.
(3) Valid claims must be paid within 90 days of submission to the Guarantor.
2. The Guarantor’s liability under this Guaranty in respect to any passenger shall not exceed the amount paid by such passenger; and the aggregate amount of the Guarantor’s liability under this Guaranty shall not exceed ________ $.
3. The Guarantor’s liability under this Guaranty shall attach only in respect of events giving rise to a cause of action against the Applicant, in respect of any of the Vessels, for nonperformance of transportation within the meaning of 46 CFR 540.2, occurring after the Certificate has been granted to the Applicant, and before the expiration date of this Guaranty, which shall be the earlier of the following dates:
(a) The date whereon the Certificate is withdrawn, or for any reason becomes invalid or ineffective; or
(b) The date 30 days after the date of receipt by FMC of notice in writing delivered by certified mail, courier service or other electronic means such as email and fax, that the Guarantor has elected to terminate this Guaranty except that: (i) If, on the date which would otherwise have been the expiration date under the foregoing provisions (a) or (b) of this Clause 3, any of the Vessels is on a voyage whereon passengers have been embarked at a United States port, then the expiration date of this Guaranty shall, in respect of such Vessel, be postponed to the date on which the last passenger on such voyage shall have finally disembarked; and (ii) Such termination shall not affect the liability of the Guarantor for refunds arising from ticket contracts made by the Applicant for the supplying of transportation and other services prior to the date such termination becomes effective.
4. If, during the currency of this Guaranty, the Applicant requests that a vessel owned or operated by the Applicant, and not specified in the annexed Schedule, should become subject to this Guaranty, and if the Guarantor accedes to such request and so notifies FMC in writing or other electronic means such as email and fax, then, provided that within 30 days of receipt of such notice, FMC shall have granted a Certificate, such Vessel shall thereupon be deemed to be one of the Vessels included in the said Schedule and subject to this Guaranty.
5. The Guarantor hereby designates ________, with offices at ________, as the Guarantor’s legal agent for service of process for the purposes of the Rules of the Federal Maritime Commission, in accordance with 46 CFR part 540, subpart A
Appendix A to Subpart A of Part 540 – Example of Escrow Agreement for Use Under 46 CFR 540.5(b)
THIS ESCROW AGREEMENT, ____ made as of this ______day of (month & year), by and between (Customer), a corporation/company having a place of business at (“Customer”) ______________ and (Banking Institution name & address) a banking corporation, having a place of business at (“Escrow Agent”).
WHEREAS, Customer wishes to establish an escrow account in order to provide for the indemnification of passengers in the event of non-performance of water transportation to which such passengers would be entitled, and to establish Customer’s financial responsibility therefore; and
WHEREAS, Escrow Agent wishes to act as Escrow Agent of the escrow account established hereunder;
NOW, THEREFORE, in consideration of the premises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Customer has established on (month, & year) (the “Commencement Date”) an escrow account with the Escrow Agent which escrow account shall hereafter be governed by the terms of this Agreement (the “Escrow Account”). Escrow Agent shall maintain the Escrow Account in its name, in its capacity as Escrow Agent.
2. Customer will determine, as of the date prior to the Commencement Date, the amount of unearned passenger revenue, including any funds to be transferred from any predecessor Escrow Agent. Escrow Agent shall have no duty to calculate the amount of unearned passenger revenue. Unearned Passenger Revenues are defined as that passenger revenue received for water transportation and all other accommodations, services and facilities relating thereto not yet performed. 46 CFR 540.2(i).
3. Customer will deposit on the Commencement Date into the Escrow Account cash in an amount equal to the amount of Unearned Passenger Revenue determined under Paragraph 2 above plus a cash amount (“the Fixed Amount”) equal to (10 percent of the Customer’s highest Unearned Passenger Revenue for the prior two fiscal years. For periods on or after (year of agreement (2009)), the Fixed Amount shall be determined by the Commission on an annual basis, in accordance with 46 CFR part 540.
4. Customer acknowledges and agrees that until such time as a cruise has been completed and Customer has taken the actions described herein, Customer shall not be entitled, nor shall it have any interest in any funds deposited with Escrow Agent to the extent such funds represent Unearned Passenger Revenue.
5. Customer may, at any time, deposit additional funds consisting exclusively of Unearned Passenger Revenue and the Fixed Amount, into the Escrow Account and Escrow Agent shall accept all such funds for deposit and shall manage all such funds pursuant to the terms of this Agreement.
6. After the establishment of the Escrow Account, as provided in Paragraph 1, Customer shall on a weekly basis on each (identify day of week), or if Customer or Escrow Agent is not open for business on (identify day of week) then on the next business day that Customer and Escrow Agent are open for business recompute the amount of Unearned Passenger Revenue as of the close of business on the preceding business day (hereinafter referred to as the “Determination Date”) and deliver a Recomputation Certificate to Escrow Agent on such date. In each such weekly recomputation, Customer shall calculate the amount by which Unearned Passenger Revenue has decreased due to (i) the cancellation of reservations and the corresponding refund of monies from Customer to the persons or entities canceling such reservations; (ii) the amount which Customer has earned as revenue as a result of any cancellation fee charged upon the cancellation of any reservations; (iii) the amount which Customer has earned due to the completion of cruises; and (iv) the amount by which Unearned Passenger Revenue has increased due to receipts from passengers for future water transportation and all other accommodations, services and facilities relating thereto and not yet performed.
The amount of Unearned Passenger Revenue as recomputed shall be compared with the amount of Unearned Passenger Revenue for the immediately preceding period to determine whether there has been a net increase or decrease in Unearned Passenger Revenue. If the balance of the Escrow Account as of the Determination Date exceeds the sum of the amount of Unearned Passenger Revenue, as recomputed, plus the Fixed Amount then applicable, then Escrow Agent shall make any excess funds in the Escrow Account available to Customer. If the balance in the Escrow Account as of the Determination Date is less than the sum of the amount of Unearned Passenger Revenue, as recomputed, plus an amount equal to the Fixed Amount, Customer shall deposit an amount equal to such deficiency with the Escrow Agent. Such deposit shall be made in immediately available funds via wire transfer or by direct transfer from the Customer’s U.S. Bank checking account before the close of business on the next business day following the day on which the Recomputation Certificate is received by Escrow Agent. The Escrow Agent shall promptly notify the Commission within two business days any time a deposit required by a Recomputation Certificate delivered to the Escrow Agent is not timely made.
7. Customer shall furnish a Recomputation Certificate, in substantially the form attached hereto as Annex 1, to the Federal Maritime Commission (the “Commission”) and to the Escrow Agent setting forth the weekly recomputation of Unearned Passenger Revenue required by the terms of Paragraph 6 above. Customer shall mail or fax to the Commission and deliver to the Escrow Agent the required Recomputation Certificate before the close of business on the business day on which Customer recomputes the amount of Unearned Passenger Revenue. Notwithstanding any other provision herein to the contrary, Escrow Agent shall not make any funds available to Customer out of the Escrow Account because of a decrease in the amount of Unearned Passenger Revenue or otherwise, until such time as Escrow Agent receives the above described Recomputation Certificate from Customer, which Recomputation Certificate shall include the Customer’s verification certification in the form attached hereto as Annex 1. The copies of each Recomputation Certificate to be furnished to the Commission shall be mailed to the Commission at the address provided in Paragraph 25 herein. If copies are not mailed to the Commission, faxed or emailed copies shall be treated with the same legal effect as if an original signature was furnished. No repayment of the Fixed Amount may be made except upon approval of the Commission.
Within fifteen (15) days after the end of each calendar month, Escrow Agent shall provide to Customer and to the Commission at the addresses provided in Paragraph 25 below, a comprehensive statement of the Escrow Account. Such statement shall provide a list of assets in the Escrow Account, the balance thereof as of the beginning and end of the month together with the original cost and current market value thereof, and shall detail all transactions that took place with respect to the assets and investments in the Escrow Account during the preceding month.
8. At the end of each quarter of Customer’s fiscal year, Customer shall cause the independent auditors then acting for it to conduct an examination in accordance with generally accepted auditing standards with respect to the weekly Recomputation Certificates furnished by Customer of the Unearned Passenger Revenues and the amounts to be deposited in the Escrow Account and to express their opinion within forty-five (45) days after the end of such quarter as to whether the calculations at the end of each fiscal quarter are in accordance with the provisions of Paragraph 6 of this Agreement. The determination of Unearned Passenger Revenue of such independent auditors shall have control over any computation of Unearned Passenger Revenue by Customer in the event of any difference between such determinations. To the extent that the actual amount of the Escrow Account is less than the amount determined by such independent auditors to be required to be on deposit in the Escrow Account, Customer shall immediately deposit an amount of cash into the Escrow Account sufficient to cause the balance of the Escrow Account to equal the amount determined to be so required. Such deposit shall be completed no later than the business day after receipt by the Escrow Agent of the auditor’s opinion containing the amount of such deficiency.
The opinion of such independent auditors shall be furnished by such auditors directly to Customer, to the Commission and to the Escrow Agent at their addresses contained in this Agreement. In the event that a required deposit to the Escrow Agent is not made within one Business Day after receipt of an auditor’s report or a Recomputation Certificate, Escrow Agent shall send notification to the Commission within the next two Business Days.
9. Escrow Agent shall invest the funds in the Escrow Account in Qualified Investments as directed by Customer in its sole and absolute discretion. “Qualified Investments” means, to the extent permitted by applicable law:
(a) Government obligations or obligations of any agency or instrumentality of the United States of America;
(b) Commercial paper issued by a United States company rated in the two highest numerical “A” categories (without regard to further gradation or refinement of such rating category) by Standard & Poor’s Corporation, or in the two highest numerical “Prime” categories (without regard to further gradation or refinement of such rating) by Moody’s Investor Services, Inc.;
(c) Certificates of deposit and money market accounts issued by any United States bank, savings institution or trust company, including the Escrow Agent, and time deposits of any bank, savings institution or trust company, including the Escrow Agent, which are fully insured by the Federal Deposit Insurance Corporation;
(d) Corporate bonds or obligations which are rated by Standard & Poor’s Corporation or Moody’s Investors Service, Inc. in one of their three highest rating categories (without regard to any gradation or refinement of such rating category by a numerical or other modifier); and
(e) Money market funds registered under the Federal Investment Company Act of 1940, as amended, and whose shares are registered under the Securities Act of 1933, as amended, and whose shares are rated “AAA”, “AA + ” or “AA” by Standard & Poor’s Corporation.
10. All interest and other profits earned on the amounts placed in the Escrow Account shall be credited to Escrow Account.
11. This Agreement has been entered into by the parties hereto, and the Escrow Account has been established hereunder by Customer, to establish the financial responsibility of Customer as the owner, operator or charterer of the passenger vessel(s) (see Exhibit A), in accordance with 46 CFR part 540, subpart A. The Escrow Account shall be held by Escrow Agent in accordance with the terms hereof, to be utilized to discharge Customer’s legal liability to indemnify the passengers of the named vessel(s) for non-performance of transportation within the meaning of 46 CFR 540.2(m). The Escrow Agent shall make indemnification payments pursuant to written instructions from Customer, on which the Escrow Agent may rely, or in the event that:
(1) The passenger makes a request for refund from the Principal in accordance with the ticket contract.
(2) In the event the passenger is unable to resolve the claim within 180 days, or such shorter claim resolution period for which the PVO’s claims procedure provides, after nonperformance of transportation occurs or if the claim is denied by the PVO, the passenger may submit a claim against the Escrow Account as per instructions on the Commission website. The claim may include a copy of the boarding pass, proof and amount of payment, cancellation notice, and dated proof of properly filed claim against the Principal. All documentation must clearly display the vessel and voyage with scheduled and actual date of sailing. And, The Escrow Agent shall make indemnification payments pursuant to written instructions from Customer, on which the Escrow Agent may rely, or in the event that such legal liability has not been discharged by Customer within twenty-one (21) days after any such passenger has obtained a final judgment (after appeal, if any) against Customer from a United States Federal or State Court of competent jurisdiction the Escrow Agent is authorized to pay funds out of the Escrow Account, after such twenty-one day period, in accordance with and pursuant to the terms of an appropriate order of a court of competent jurisdiction on receipt of a certified copy of such order.
(3) Valid claims must be paid within 90 days of submission to the Escrow Agent.
As further security for Customer’s obligation to provide water transportation to passengers holding tickets for transportation on the passenger vessel(s) (see Exhibit A) Customer will pledge to each passenger who has made full or partial payment for future passage on the named vessel(s) an interest in the Escrow Account equal to such payment. Escrow Agent is hereby notified of and acknowledges such pledges. Customers’ instructions to Escrow Agent to release funds from the Escrow Account as described in this Agreement shall constitute a certification by Customer of the release of pledge with respect to such funds due to completed, canceled or terminated cruises. Furthermore, Escrow Agent agrees to hold funds in the Escrow Account until directed by Customer or a court order to release such funds as described in this Agreement. Escrow Agent shall accept instructions only from Customer, acting on its own behalf or as agent for its passengers, and shall not have any obligations at any time to act pursuant to instructions of Customer’s passengers or any other third parties except as expressly described herein. Escrow Agent hereby waives any right of offset to which it is or may become entitled with regard to the funds on deposit in the Escrow Account which constitute Unearned Passenger Revenue.
12. Customer agrees to provide to the Escrow Agent all information necessary to facilitate the administration of this Agreement and the Escrow Agent may rely upon any information so provided.
13. Customer hereby warrants and represents that it is a corporation in good standing in its State of organization and that is qualified to do business in the State. Customer further warrants and represents that (i) it possesses full power and authority to enter into this Agreement and fulfill its obligations hereunder and (ii) that the execution, delivery and performance of this Agreement have been authorized and approved by all required corporate actions.
14. Escrow Agent hereby warrants and represents that it is a national banking association in good standing. Escrow Agent further warrants and represents that (i) it has full power and authority to enter into this Agreement and fulfill its obligations hereunder and (ii) that the execution, delivery and performance of this Agreement have been authorized and approved by all required corporate actions.
15. This Agreement shall have a term of one (1) year and shall be automatically renewed for successive one (1) year terms unless notice of intent not to renew is delivered to the other party to this Agreement and to the Commission at least 90 days prior to the expiration of the current term of this Agreement. Notice shall be given by certified mail to the parties at the addresses provided in Paragraph 25 below. Notice shall be given by certified mail to the Commission at the address specified in this Agreement.
16. (a) Customer hereby agrees to indemnify and hold harmless Escrow Agent against any and all claims, losses, damages, liabilities, cost and expenses, including litigation, arising hereunder, which might be imposed or incurred on Escrow Agent for any acts or omissions of the Escrow Agent or Customer, not caused by the negligence or willful misconduct of the Escrow Agent. The indemnification set forth herein shall survive the resignation or removal of the Escrow Agent and the termination of this agreement.
(b) In the event of any disagreement between parties which result in adverse claims with respect to funds on deposit with Escrow Agent or the threat thereof, Escrow Agent may refuse to comply with any demands on it with respect thereto as long as such disagreement shall continue and in so refusing, Escrow Agent need not make any payment and Escrow Agent shall not be or become liable in any way to Customer or any third party (whether for direct, incidental, consequential damages or otherwise) for its failure or refusal to comply with such demands and it shall be entitled to continue so to refrain from acting and so refuse to act until such conflicting or adverse demands shall finally terminate by mutual written agreement acceptable to Escrow Agent or by a final, non-appealable order of a court of competent jurisdiction.
17. Escrow Agent shall be entitled to such compensation for its services hereunder as may be agreed upon from time to time by Escrow Agent and Customer and which shall initially be set forth in a separate letter agreement between Escrow Agent and Customer. This Agreement shall not become effective until such letter agreement has been executed by both parties hereto and confirmed in writing to the Commission.
18. Customer may terminate this Agreement and engage a successor escrow agent, after giving at least 90 days written termination notice to Escrow Agent prior to terminating Escrow Agent if such successor agent is a commercial bank whose passbook accounts are insured by the Federal Deposit Insurance Corporation and such successor agrees to the terms of this agreement, or if there is a new agreement then such termination shall not be effective until the new agreement is approved in writing by the Commission. Upon giving the written notice to Customer and the Commission, Escrow Agent may terminate any and all duties and obligations imposed on Escrow Agent by this Agreement effective as of the date specified in such notice, which date shall be at least 90 days after the date such notice is given. All escrowed funds as of the termination date specified in the notice shall be turned over to the successor escrow agent, or if no successor escrow agent has been named within 90 days after the giving of such notice, then all such escrowed funds for sailing scheduled to commence after the specified termination date shall be returned to the person who paid such passage fares upon written approval of the Commission. In the event of any such termination where the Escrow Agent shall be returning payments to the passengers, then Escrow Agent shall request from Customer a list of passenger names, addresses, deposit/fare amounts and other information needed to make refunds. On receipt of such list, Escrow Agent shall return all passage fares held in the Escrow Account as of the date of termination specified in the notice to the passengers, excepting only amounts Customer is entitled to receive pursuant to the terms of this Agreement for cruises completed through the termination date specified in the notice, and all interest which shall be paid to Customer.
In the event of termination of this Agreement and if alternative evidence of financial responsibility has been accepted by the Commission and written evidence satisfactory to Escrow Agent of the Commission’s acceptance is presented to Escrow Agent, then Escrow Agent shall release to Customer all passage fares held in the Escrow Account as of the date of termination specified in the notice. In the event of any such termination where written evidence satisfactory to Escrow Agent of the Commission’s acceptance has not been presented to Escrow Agent, then Escrow Agent shall request from Customer a list of passenger names, addresses, deposit/fare amounts and other information needed to make refunds. On receipt of such list, Escrow Agent shall return all passage fares held in the Escrow Account as of the date of termination specified in the notice to the passengers, excepting only amounts Customer is entitled to receive pursuant to the terms of this Agreement for cruises completed through the termination date specified in the notice, and all interest which shall be paid to Customer. Upon termination, Customer shall pay all costs and fees previously earned or incurred by Escrow Agent through the termination date.
19. Neither Customer nor Escrow Agent shall have the right to sell, pledge, hypothecate, assign, transfer or encumber funds or assets in the Escrow Account except in accordance with the terms of this Agreement.
20. This Agreement is for the benefit of the parties hereto and, accordingly, each and every provision hereof shall be enforceable by any or each or both of them. Additionally, this Agreement shall be enforceable by the Commission. However, this Agreement shall not be enforceable by any other party, person or entity whatsoever.
21. (a) No amendments, modifications or other change in the terms of this Agreement shall be effective for any purpose whatsoever unless agreed upon in writing by Escrow Agent and Customer and approved in writing by the Commission.
(b) No party hereto may assign its rights or obligations hereunder without the prior written consent of the other, and unless approved in writing by the Commission. The merger of Customer with another entity or the transfer of a controlling interest in the stock of Customer shall constitute an assignment hereunder for which prior written approval of the Commission is required, which approval shall not be unreasonably withheld.
22. The foregoing provisions shall be binding upon undersigned, their assigns, successors and personal representative.
23. The Commission shall have the right to inspect the books and records of the Escrow Agent and those of Customer as related to the Escrow Account. In addition, the Commission shall have the right to seek copies of annual audited financial statements and other financial related information.
24. All investments, securities and assets maintained under the Escrow Agreement will be physically located in the United States.
25. Notices relating to this Agreement shall be sent to Customer at (address) and to Escrow Agent at (address) or to such other address as any party hereto may hereafter designate in writing. Any communication sent to the Commission or its successor organization shall be sent to the following address: Bureau of Certification and Licensing, Federal Maritime Commission, 800 North Capitol NW, Washington, DC 20573-0001.
26. This agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument.
27. This Agreement is made and delivered in, and shall be construed in accordance with the laws of the State of ________without regard to the choice of law rules.
IN WITNESS WHEREOF, the undersigned have each caused this Agreement to be executed on their behalf as of the date first above written.
ESCROW AGREEMENT, dated ________by and between (Customer) and (Escrow Agent).
The undersigned, the Controller of ________hereby furnishes this Recomputation Certificate pursuant to the terms of the Escrow Agreement dated , between the Customer and (“Bank”). Terms herein shall have the same definitions as those in such Escrow Agreement and Federal Maritime Commission regulations.
I. Unearned Passenger Revenue as of (“Date”) was: $ ________
a. Additions to unearned Passenger Revenue since such date were:
b. Reductions in Unearned Passenger Revenue since such date were:
II. Unearned Passenger Revenue as of the date of this Recomputation Certificate is: $ ________
III. Plus the Required Fixed Amount: $ ________
IV. Total Required in Escrow: $ ________
V. Current Balance in Escrow Account: $ ________
VI. Amount to be Deposited in Escrow Account: $ ________
VII. Amount of Escrow Account available to Operator: $ ________
VIII. I declare under penalty of perjury that the above information is true and correct.
Subpart B – Proof of Financial Responsibility, Bonding and Certification of Financial Responsibility To Meet Liability Incurred for Death or Injury to Passengers or Other Persons on Voyages
§ 540.20 Scope.
The regulations contained in this subpart set forth the procedures whereby owners or charterers of vessels having berth or stateroom accommodations for 50 or more passengers and embarking passengers at U.S. ports shall establish their financial responsibility to meet any liability which may be incurred for death or injury to passengers or other persons on voyages to or from U.S. ports. Included also are the qualifications required by the Commission for issuance of a Certificate (Casualty) and the basis for the denial, revocation, suspension, or modification of such Certificates.
§ 540.21 Definitions.
As used in this subpart, the following terms shall have the following meanings:
(a) Person includes individuals, corporations, partnerships, associations, and other legal entities existing under or authorized by the laws of the United States or any state thereof or the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands or any territory or possession of the United States, or the laws of any foreign country.
(b) Vessel means any commercial vessel having berth or stateroom accommodations for 50 or more passengers and embarking passengers at U.S. ports.
(c) Commission means the Federal Maritime Commission.
(d) United States includes the Commonwealth of Puerto Rico, the Virgin Islands or any territory or possession of the United States.
(e) Berth or stateroom accommodations or passenger accommodations includes all temporary and all permanent passenger sleeping facilities.
(f) Certificate (Casualty) means a Certificate of Financial Responsibility to Meet Liability Incurred for Death or Injury to Passengers or Other Persons on Voyages issued pursuant to this subpart.
(g) Voyage means voyage of a vessel to or from U.S. ports.
(h) Insurer means any insurance company, underwriter, corporation or association of underwriters, ship owners’ protection and indemnity association, or other insurer acceptable to the Commission.
(i) Evidence of insurance means a policy, certificate of insurance, cover note, or other evidence of coverage acceptable to the Commission.
(j) For the purpose of determining compliance with § 540.22, passengers embarking at United States ports means any persons, not necessary to the business, operation, or navigation of a vessel, whether holding a ticket or not, who board a vessel at a port or place in the United States and are carried by the vessel on a voyage from that port or place.
§ 540.22 Proof of financial responsibility, when required.
No vessel shall embark passengers at U.S. ports unless a Certificate (Casualty) has been issued to or covers the owner or charterer of such vessel.
§ 540.23 Procedure for establishing financial responsibility.
(a) In order to comply with section 2 of Pub. L. 89-777 (46 U.S.C. 44101, 44103-44106) enacted November 6, 1966, there must be filed an Application on Form FMC-131 for a Certificate of Financial Responsibility to Meet Liability Incurred for Death or Injury to Passengers or Other Persons on Voyages. Copies of Form FMC-131 may be obtained from the Secretary, Federal Maritime Commission, Washington, DC 20573.
(b) An application for a Certificate (Casualty) shall be filed in duplicate with the Secretary, Federal Maritime Commission, by the vessel owner or charterer at least 60 days in advance of the sailing. Late filing of the application will be permitted only for good cause shown. All applications and evidence required to be filed with the Commission shall be in English, and any monetary terms shall be expressed in terms of U.S. currency. The Commission shall have the privilege of verifying any statements made or any evidence submitted under the rules of this subpart. An application for a Certificate (Casualty), excluding an application for the addition or substitution of a vessel to the applicant’s fleet, must be accompanied by a filing fee remittance of $1,889. An application for a Certificate (Casualty) for the addition or substitution of a vessel to the applicant’s fleet must be accompanied by a filing fee remittance of $921.
(c) The application shall be signed by a duly authorized officer or representative of the applicant with a copy of evidence of his authority. In the event of any material change in the facts as reflected in the application, an amendment to the application shall be filed no later than five (5) days following such change. For the purpose of this subpart, a material change shall be one which: (1) Results in a decrease in the amount submitted to establish financial responsibility to a level below that required to be maintained under the rules of this subpart, or (2) requires that the amount to be maintained be increased above the amount submitted to establish financial responsibility. Notice of the application for, issuance, denial, revocation, suspension, or modification of any such Certificate shall be published in the
§ 540.24 Insurance, surety bonds, self-insurance, guaranties, and escrow accounts.
Evidence of adequate financial responsibility for the purposes of this subpart may be established by one of the following methods:
(a) Filing with the Commission evidence of insurance issued by an insurer providing coverage for liability which may be incurred for death or injury to passengers or other persons on voyages in an amount based upon the number of passenger accommodations aboard the vessel, calculated as follows:
(1) Termination or cancellation of the evidence of insurance, whether by the assured or by the insurer, and whether for nonpayment of premiums, calls or assessments, or for other cause, shall not be effected: (i) Until notice in writing has been given to the assured or to the insurer and to the Secretary of the Commission at its office in Washington, DC 20573, by certified mail, and (ii) until after 30 days expire from the date notice is actually received by the Commissioner, or until after the Commission revokes the Certificate (Casualty), whichever occurs first. Notice of termination or cancellation to the assured or insurer shall be simultaneous to such notice given to the Commission. The insurer shall remain liable for claims covered by said evidence of insurance arising by virtue of an event which had occurred prior to the effective date of said termination or cancellation. No such termination or cancellation shall become effective while a voyage is in progress.
(2) The insolvency or bankruptcy of the assured shall not constitute a defense to the insurer as to claims included in said evidence of insurance and in the event of said insolvency or bankruptcy, the insurer agrees to pay any unsatisfied final judgments obtained on such claims.
(3) No insurance shall be acceptable under these rules which restricts the liability of the insurer where privity of the owner or charterer has been shown to exist.
(4) Paragraphs (a)(1) through (a)(3) of this section shall apply to the guaranty as specified in paragraph (d) of this section.
(b) Filing with the Commission a surety bond on Form FMC-132B issued by a bonding company authorized to do business in the United States and acceptable to the Commission. Such surety bond shall evidence coverage for liability which may be incurred for death or injury to passengers or other persons on voyages in an amount calculated as in paragraph (a) of this section, and shall not be terminated while a voyage is in progress. The requirements of Form FMC-132B, however, may be amended by the Commission in a particular case for good cause.
(c) Filing with the Commission for qualification as a self-insurer such evidence acceptable to the Commission as will demonstrate continued and stable passenger operations over an extended period of time in the foreign or domestic trade of the United States. In addition, applicant must demonstrate financial responsibility by maintenance of working capital and net worth, each in an amount calculated as in paragraph (a) of this section. The Commission will take into consideration all current contractual requirements with respect to the maintenance of working capital and/or net worth to which the applicant is bound. Evidence must be submitted that the working capital and net worth required above are physically located in the United States. This evidence of financial responsibility shall be supported by and subject to the following which are to be submitted on a continuing basis for each year or portion thereof while the Certificate (Casualty) is in effect:
(1) A current quarterly balance sheet, except that the Commission, for good cause shown, may require only an annual balance sheet;
(2) A current quarterly statement of income and surplus except that the Commission, for good cause shown, may require only an annual statement of income and surplus;
(3) An annual current balance sheet and an annual current statement of income and surplus to be certified by appropriate certified public accountants;
(4) An annual current statement of the book value or current market value of any assets physically located within the United States together with a certification as to the existence and amount of any encumbrances thereon;
(5) An annual current credit rating report by Dun and Bradstreet or any similar concern found acceptable to the Commission;
(6) A list of all contractual requirements or other encumbrances (and to whom the applicant is bound in this regard) relating to the maintenance of working capital and net worth;
(7) All financial statements required to be submitted under this section shall be due within a reasonable time after the close of each pertinent accounting period;
(8) Such additional evidence of financial responsibility as the Commission may deem necessary in appropriate cases.
(d) Filing with the Commission a guaranty on Form FMC-133B by a guarantor acceptable to the Commission. Any such guaranty shall be in an amount calculated as in paragraph (a) of this section. The requirements of Form FMC-133B, however, may be amended by the Commission in a particular case for good cause.
(e) Filing with the Commission evidence of an escrow account, acceptable to the Commission, the amount of such account to be calculated as in paragraph (a) of this section.
(f) The Commission will, for good cause shown, consider any combination of the alternatives described in paragraphs (a) through (e) of this section for the purpose of establishing financial responsibility.
§ 540.25 Evidence of financial responsibility.
Where satisfactory proof of financial responsibility has been established, a Certificate (Casualty) covering specified vessels shall be issued evidencing the Commission’s finding of adequate financial responsibility to meet any liability which may be incurred for death or injury to passengers or other persons on voyages. The period covered by the certificate shall be indeterminate unless a termination date has been specified therein.
§ 540.26 Denial, revocation, suspension, or modification.
(a) Prior to the denial, revocation, suspension, or modification of a Certificate (Casualty), the Commission shall advise the applicant of its intention to deny, revoke, suspend, or modify, and shall state the reasons therefor. If the applicant, within 20 days after the receipt of such advice, requests a hearing to show that the evidence of financial responsibility filed with the Commission does meet the rules of this subpart, such hearing shall be granted by the Commission, except that a Certificate (Casualty) shall become null and void upon cancellation or termination of evidence of insurance, surety bond, guaranty, or escrow account.
(b) A Certificate (Casualty) may be denied, revoked, suspended, or modified for any of the following reasons:
(1) Making any willfully false statement to the Commission in connection with an application for a Certificate (Casualty);
(2) Circumstances whereby the party does not qualify as financially responsible in accordance with the requirements of the Commission;
(3) Failure to comply with or respond to lawful inquiries, rules, regulations, or orders of the Commission pursuant to the rules of this subpart.
(c) If the applicant, within 20 days after notice of the proposed denial, revocation, suspension, or modification under paragraph (b) of this section, requests a hearing to show that such denial, revocation, suspension, or modification should not take place, such hearing shall be granted by the Commission.
§ 540.27 Miscellaneous.
(a) If any evidence filed with the application does not comply with the requirements of this subpart, or for any reason, fails to provide adequate or satisfactory protection to the public, the Commission will notify the applicant stating the deficiencies thereof.
(b) Any financial evidence submitted to the Commission under the rules of this subpart shall be written in the full and correct name of the person to whom the Certificate (Casualty) is to be issued, and in case of a partnership, all partners shall be named.
(c) The Commission’s bond (Form FMC-132B), guaranty (Form FMC-133B), and application (Form FMC-131 as set forth in subpart A of this part) forms are hereby incorporated as a part of the rules of this subpart. Any such forms filed with the Commission under this subpart must be in duplicate.
(d) Any securities or assets accepted by the Commission (from applicants, insurers, guarantors, escrow agents, or others) under the rules of this subpart must be physically located in the United States.
(e) Each applicant, insurer, escrow agent, and guarantor shall furnish a written designation of a person in the United States as legal agent for service of process for the purposes of the rules of this subpart. Such designation must be acknowledged, in writing, by the designee. In any instance in which the designated agent cannot be served because of death, disability, or unavailability, the Secretary, Federal Maritime Commission, will be deemed to be the agent for service of process. A party serving the Secretary in accordance with the above provision must also serve the certificant, insurer, escrow agent, or guarantor, as the case may be, by registered mail, at its last known address on file with the Commission.
(f) In the case of any charter arrangements involving a vessel subject to the regulations of this subpart, the vessel owner (in the event of a subcharter, the charterer shall file) must within 10 days file with the Secretary of the Commission evidence of any such arrangement.
(g) Financial data filed in connection with the rules of this subpart shall be confidential except in instances where information becomes relevant in connection with hearings which may be requested by applicant pursuant to § 540.26(a) or § 540.26(b).
(h) Every person who has been issued a Certificate (Casualty) must submit to the Commission a semiannual statement of any changes that have taken place with respect to the information contained in the application or documents submitted in support thereof. Negative statements are required to indicate no change. Such statements must cover every such 6-month period commencing with the first 6-month period of the fiscal year immediately subsequent to the date of the issuance of the Certificate (Casualty). In addition, the statements will be due within 30 days after the close of every 6-month period.
Form FMC-132B to Subpart B of Part 540
Know all men by these presents, that We ____________ (Name of applicant), of __________ (City), ____________ (State and country), as Principal (hereinafter called Principal), and ____________ (Name of surety), a company created and existing under the laws of ____________ (State and country) and authorized to do business in the United States, as Surety (hereinafter called Surety) are held and firmly bound unto the United States of America in the penal sum of ____________, for which payment, well and truly to be made, we bind ourselves and our heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents.
Whereas, the Principal intends to become a holder of a Certificate (Casualty) pursuant to the provisions of subpart B of part 540 of title 46, Code of Federal Regulations, and has elected to file with the Federal Maritime Commission such a bond to insure financial responsibility to meet any liability it may incur for death or injury to passengers or other persons on voyages to or from U.S. ports, and
Whereas, this bond is written to assure compliance by the Principal as an authorized holder of a Certificate (Casualty) pursuant to subpart B of part 540 of title 46, Code of Federal Regulations, and shall inure to the benefit of any and all passengers or other persons to whom the Principal may be held legally liable for any of the damages herein described.
Now, therefore, the condition of this obligation is such that if the Principal shall pay or cause to be paid to passengers or other persons any sum or sums for which the Principal may be held legally liable by reason of the Principal’s failure faithfully to meet any liability the Principal may incur for death or injury to passengers or other persons on voyages to or from U.S. ports, while this bond is in effect pursuant to and in accordance with the provisions of subpart B of part 540 of title 46, Code of Federal Regulations, then this obligation shall be void, otherwise, to remain in full force and effect.
The liability of the Surety with respect to any passenger or other persons shall in no event exceed the amount of the Principal’s legal liability under any final judgment or settlement agreement, except that, if the aggregate amount of such judgments and settlements exceeds an amount computed in accordance with the formula contained in section 2(a) of Pub. L. 89-777 (46 U.S.C. 44103(b)), then the Surety’s total liability under this surety bond shall be limited to an amount computed in accordance with such formula.
The Surety agrees to furnish written notice to the Federal Maritime Commission forthwith of all suits filed, judgments rendered, and payments made by said Surety under this bond.
This bond is effective the ______________ day of __________________, 19____, 12:01 a.m., standard time, at the address of the Principal as stated herein and shall continue in force until terminated as hereinafter provided. The Principal or the Surety may at any time terminate this bond by written notice sent by certified mail to the other and to the Federal Maritime Commission at its Office in Washington, D.C., such termination to become effective thirty (30) days after actual receipt of said notice by the Commission, except that no such termination shall become effective while a voyage is in progress. The Surety shall not be liable hereunder for any liability incurred for death or injury to passengers or other persons on voyages to or from U.S. ports after the termination of this bond as herein provided, but such termination shall not affect the liability of the Surety hereunder for such liability incurred for death or injury to passengers or other persons on voyages to or from U.S. ports prior to the date such termination becomes effective.
In witness whereof, the said Principal and Surety have executed this instrument on the ____________ day of ________________, 19____.
(Signature and title)
(Signature and title)
Only corporations or associations of individual insurers may qualify to act as Surety, and they must establish to the satisfaction of the Federal Maritime Commission legal authority to assume the obligations of surety and financial ability to discharge them.
Form FMC-133B to Subpart B of Part 540
1. Whereas ____________ (Name of Applicant) (Hereinafter referred to as the “Applicant”) is the Owner or Charterer of the passenger Vessel(s) specified in the annexed Schedule (“the Vessels”), which are or may become engaged in voyages to or from U.S. ports, and the Applicant desires to establish its financial responsibility in accordance with section 2 of Public Law 89-777, 89th Congress, approved November 6, 1966 (“the Act”) then, provided that the Federal Maritime Commission (“FMC”) shall have accepted, as sufficient for that purpose, the Applicant’s application, supported by this Guaranty, and provided that FMC shall issue to the Applicant a Certificate (Casualty) (“Certificate”), the undersigned Guarantor hereby guarantees to discharge the applicant’s legal liability in respect of claims for damages for death or injury to passengers or other persons on voyages of the Vessels to or from U.S. ports, in the event that such legal liability has not been discharged by the Applicant within 21 days after any such passenger or other person, or, in the event of death, his or her personal representative, has obtained a final judgment (after appeal, if any) against the Applicant from a U.S. Federal or State Court of competent jurisdiction, or has become entitled to payment of a specified sum by virtue of a compromise settlement agreement made with the Applicant, with the approval of the Guarantor, whereby, upon payment of the agreed sum, the Applicant is to be fully, irrevocably and unconditionally discharged from all further liability to such passenger or other person, or to such personal representative, with respect to such claim.
2. The Guarantor’s liability under this Guaranty shall in no event exceed the amount of the Applicant’s legal liability under any such judgment or settlement agreement, except that, if the aggregate amount of such judgments and settlements exceeds an amount computed in accordance with the formula contained in section 2(a) of the Act (46 U.S.C. 44103(b)), then the Guarantor’s total liability under this Guaranty shall be limited to an amount computed in accordance with such formula.
3. The Guarantor’s liability under this Guaranty shall attach only in respect of events giving rise to causes of action against the Applicant in respect of any of the Vessels for damages for death or injury within the meaning of section 2 of the Act, occurring after the Certificate has been granted to the Applicant and before the expiration date of this Guaranty, which shall be the earlier of the following dates:
(a) The date whereon the Certificate is withdrawn, or for any reason becomes invalid or ineffective; or
(b) The date 30 days after the date of receipt by FMC of notice in writing (including telex or cable) that the Guarantor has elected to terminate this Guaranty, except that if, on the date which would otherwise have been the expiration date of this Guaranty under the foregoing provisions of this Clause 3, any of the Vessels is on a voyage in respect of which such Vessel would not have received clearance in accordance with section 2(e) of the Act (46 U.S.C. 44105) without the Certificate, then the expiration date of this Guaranty shall, in respect of such Vessel, be postponed to the date on which the last passenger on such voyage shall have fully disembarked.
4. If, during the currency of this Guaranty, the Applicant requests that a vessel owned or operated by the Applicant, and not specified in the annexed Schedule, should become subject to this Guaranty, and if the Guarantor accedes to such request and so notifies FMC in writing (including telex or cable), then provided that, within 30 days of receipt of such notice FMC shall have granted a Certificate, such vessel shall thereupon be deemed to be one of the Vessels included in the said Schedule and subject to this Guaranty.
5. The Guarantor hereby designates ____________, with offices at ____________, as the Guarantor’s legal agent for Service of process for the purposes of the Rules of the Federal Maritime Commission, subpart B of part 540 of title 46, Code of Federal Regulations, issued under section 2 of the Pub. L 89-777 (80 Stat. 1357, 1358), entitled “Security for the Protection of the Public.”
(Place and Date of Execution)
(Name and Guarantor)
(Address of Guarantor)
(Name and Title)
Subpart C – General
§ 540.91 OMB control numbers assigned pursuant to the Paperwork Reduction Act.
This section displays the control numbers assigned to information collection requirements of the Commission in this part by the Office of Management and Budget pursuant to the Paperwork Reduction Act of 1980, Public Law 96-511. The Commission intends that this section comply with the requirements of section 3507(f) of the Paperwork Reduction Act, which requires that agencies display a current control number assigned by the Director of the Office of Management and Budget (OMB) for each agency information collection requirement:
| Section | Current OMB Control No. |
|---|---|
| 540.4 (Form FMC-131) | 3072-0012 |
| 540.5 | 3072-0011 |
| 540.6 | 3072-0011 |
| 540.8 | 3072-0011 |
| 540.9 | 3072-0011 |
| 540.23 (Form FMC-131) | 3072-0012 |
| 540.24 | 3072-0011 |
| 540.26 | 3072-0011 |
| 540.27 | 3072-0011 |
PART 545 – INTERPRETATIONS AND STATEMENTS OF POLICY
§ 545.1 Interpretation of Shipping Act of 1984 – Refusal to negotiate with shippers’ associations.
(a) 46 U.S.C. 40502 authorizes ocean common carriers and agreements between or among ocean common carriers to enter into a service contract with a shippers’ association, subject to the requirements of the Shipping Act of 1984 (“Act”). 46 U.S.C. 41104(a)(10) prohibits carriers from unreasonably refusing to deal or negotiate. 46 U.S.C. 40307(a)(3) exempts from the antitrust laws any activity within the scope of the Act, undertaken with a reasonable basis to conclude that it is pursuant to a filed and effective agreement.
(b) The Federal Maritime Commission interprets these provisions to establish that a common carrier or conference may not require a shippers’ association to obtain or apply for a Business Review Letter from the Department of Justice prior to or as part of a service contract negotiation process.
§ 545.2 Interpretation of Shipping Act of 1984 – Unpaid ocean freight charges.
Section 10(a)(1) of the Shipping Act of 1984 (46 U.S.C. 41102(a)) states that it is unlawful for any person to obtain or attempt to obtain transportation for property at less than the properly applicable rates, by any “unjust or unfair device or means.” An essential element of the offense is use of an “unjust or unfair device or means.” In the absence of evidence of bad faith or deceit, the Federal Maritime Commission will not infer an “unjust or unfair device or means” from the failure of a shipper to pay ocean freight. An “unjust or unfair device or means” could be inferred where a shipper, in bad faith, induced the carrier to relinquish its possessory lien on the cargo and to transport the cargo without prepayment by the shipper of the applicable freight charges.
§ 545.3 Interpretation of § 515.23(b) of this chapter – Payment pursuant to a claim against an ocean transportation intermediary.
A claimant seeking to settle a claim in accordance with § 515.23(b)(1) of this chapter should promptly provide to the financial responsibility provider all documents and information relating to and supporting its claim for the purpose of evaluating the validity and subject matter of the claim.
§ 545.4 Interpretation of Shipping Act of 1984 – Unjust and unreasonable practices.
46 U.S.C. 41102(c) is interpreted to require the following elements in order to establish a successful claim for reparations:
(a) The respondent is an ocean common carrier, marine terminal operator, or ocean transportation intermediary;
(b) The claimed acts or omissions of the regulated entity are occurring on a normal, customary, and continuous basis;
(c) The practice or regulation relates to or is connected with receiving, handling, storing, or delivering property;
(d) The practice or regulation is unjust or unreasonable; and
(e) The practice or regulation is the proximate cause of the claimed loss.
§ 545.5 Interpretation of Shipping Act of 1984 – Unjust and unreasonable practices with respect to demurrage and detention.
(a) Purpose. The purpose of this rule is to provide guidance about how the Commission will interpret 46 U.S.C. 41102(c) and § 545.4(d) in the context of demurrage and detention.
(b) Applicability and scope. This rule applies to practices and regulations relating to demurrage and detention for containerized cargo. For purposes of this rule, the terms demurrage and detention encompass any charges, including “per diem,” assessed by ocean common carriers, marine terminal operators, or ocean transportation intermediaries (“regulated entities”) related to the use of marine terminal space (e.g., land) or shipping containers, not including freight charges.
(c) Incentive principle – (1) General. In assessing the reasonableness of demurrage and detention practices and regulations, the Commission will consider the extent to which demurrage and detention are serving their intended primary purposes as financial incentives to promote freight fluidity.
(2) Particular applications of incentive principle – (i) Cargo availability. The Commission may consider in the reasonableness analysis the extent to which demurrage practices and regulations relate demurrage or free time to cargo availability for retrieval.
(ii) Empty container return. Absent extenuating circumstances, practices and regulations that provide for imposition of detention when it does not serve its incentivizing purposes, such as when empty containers cannot be returned, are likely to be found unreasonable.
(iii) Notice of cargo availability. In assessing the reasonableness of demurrage practices and regulations, the Commission may consider whether and how regulated entities provide notice to cargo interests that cargo is available for retrieval. The Commission may consider the type of notice, to whom notice is provided, the format of notice, method of distribution of notice, the timing of notice, and the effect of the notice.
(iv) Government inspections. In assessing the reasonableness of demurrage and detention practices in the context of government inspections, the Commission may consider the extent to which demurrage and detention are serving their intended purposes and may also consider any extenuating circumstances.
(d) Demurrage and detention policies. The Commission may consider in the reasonableness analysis the existence, accessibility, content, and clarity of policies implementing demurrage and detention practices and regulations, including dispute resolution policies and practices and regulations regarding demurrage and detention billing. In assessing dispute resolution policies, the Commission may further consider the extent to which they contain information about points of contact, timeframes, and corroboration requirements.
(e) Transparent terminology. The Commission may consider in the reasonableness analysis the extent to which regulated entities have clearly defined the terms used in demurrage and detention practices and regulations, the accessibility of definitions, and the extent to which the definitions differ from how the terms are used in other contexts.
(f) Non-Preclusion. Nothing in this rule precludes the Commission from considering factors, arguments, and evidence in addition to those specifically listed in this rule.
SUBCHAPTER C – REGULATIONS AND ACTIONS TO ADDRESS RESTRICTIVE FOREIGN MARITIME PRACTICES
PART 550 – REGULATIONS TO ADJUST OR MEET CONDITIONS UNFAVORABLE TO SHIPPING IN THE FOREIGN TRADE OF THE UNITED STATES
In accordance with 44 U.S.C. 3518(c)(1)(B), and except for investigations undertaken with reference to a category of individuals or entities (e.g., an entire industry), any information requests or requirements in this part 550 are not subject to the requirements of section 3507 of the Paperwork Reduction Act because such collections of information are pursuant to a civil, administrative action or investigation by an agency of the United States against specific individuals or entities.
Subpart A – General Provisions
§ 550.101 Purpose.
It is the purpose of the regulations of this part to declare certain conditions resulting from governmental actions by foreign nations or from the competitive methods or practices of owners, operators, agents, or masters of vessels of a foreign country unfavorable to shipping in the foreign trade of the United States and to establish procedures by which persons who are or can reasonably expect to be adversely affected by such conditions may petition the Federal Maritime Commission for the issuance of regulations under the authority of section 19 of the Merchant Marine Act of 1920 (46 U.S.C. 42101-42109). It is the further purpose of the regulations of this part to afford notice of the general circumstances under which the authority granted to the Commission under section 19 may be invoked and the nature of the regulatory actions contemplated.
§ 550.102 Scope.
Regulatory actions may be taken when the Commission finds, on its own motion or upon petition, that a foreign government has promulgated and enforced or intends to enforce laws, decrees, regulations or the like, or has engaged in or intends to engage in practices which presently have or prospectively could create conditions unfavorable to shipping in the foreign trade of the United States, or when owners, operators, agents or masters of foreign vessels engage in or intend to engage in competitive methods, pricing practices or other practices which have created or could create such conditions.
§ 550.103 Definitions.
When used in this part:
(a) Act means the Merchant Marine Act, 1920, as amended by Pub. L. 101-595 and as amended by Pub. L. 105-258.
(b) Person means individuals, corporations, partnerships and associations existing under or authorized by the laws of the United States or of a foreign country, and includes any common carrier, tramp operator, bulk operator, shipper, shippers’ association, importer, exporter, consignee, ocean transportation intermediary, marine terminal operator, or any component of the Government of the United States.
(c) Voyage means an inbound or outbound movement between a foreign country and the United States by a vessel engaged in the United States oceanborne trade. Each inbound or outbound movement constitutes a separate voyage.
§ 550.104 Confidentiality.
Notwithstanding any other law, the Commission may refuse to disclose to the public a response or other information provided under the terms of this part.
§ 550.105 Consultation.
(a) Consultation with other agencies. The Commission may consult with, seek the cooperation of, or make recommendations to other appropriate agencies prior to taking any action under this part.
(b) Request for resolution through diplomatic channels. Upon the filing of a petition, or on its own motion when there are indications that conditions unfavorable to shipping in the foreign trade of the United States may exist, the Commission may notify the Secretary of State that such conditions apparently exist, and may request that the Secretary seek resolution of the matter through diplomatic channels. If request is made, the Commission will give every assistance in such efforts, and the Commission may request the Secretary to report the results of such efforts at a specified time.
Subpart B – Production of Information
§ 550.201 Information orders.
In furtherance of the purposes of this part –
(a) The Commission may, by order, require any person (including any common carrier, tramp operator, bulk operator, shipper, shippers’ association, ocean transportation intermediary, or marine terminal operator, or any officer, receiver, trustee, lessee, agent, or employee thereof), to file with the Commission a report, answers to questions, documentary material, or other information which the Commission considers necessary or appropriate;
(b) The Commission may require a report or answers to questions to be made under oath;
(c) The Commission may prescribe the form and the time for response to a report or answers to questions.
§ 550.202 Type of information.
In order to aid in the determination of whether conditions unfavorable to shipping in the foreign trade of the United States exist, or in order to aid in the formulation of appropriate regulations subsequent to a finding that conditions unfavorable to shipping in the foreign trade of the United States exist, the Commission may, when it deems necessary or appropriate, and without further proceedings, order any:
(a) Owner, operator, or charterer in the affected trade to furnish any or all of the following information:
(1) Statistics for a representative period showing passengers or cargo carried to and from the United States in the affected trade on vessels owned, operated or chartered by it, by type, source, value, and direction;
(2) Information for a representative period on the activities of vessels owned, operated, or chartered, which shall include sailings to and from United States ports, costs incurred, taxes or other charges paid to authorities, and subsidies or other payments received from foreign authorities;
(3) Information for a specified future period on the prospective activities of vessels which it owns, operates or charters or plans to own, operate or charter, to and from United States ports, which shall include projected sailings, anticipated costs, taxes or other charges to be paid to authorities, and expected subsidies or other payments to be received from foreign authorities; and
(4) Such other information that the Commission considers relevant to discovering or determining the existence of general or special conditions unfavorable to shipping in the foreign trade of the United States.
(b) Shipper, shippers’ association, or ocean transportation intermediary in the affected trade to furnish any or all of the following information:
(1) Information for a representative period showing shipments made, type of cargo, commodity, carrier and vessel on which shipment was made, including furnishing copies of bills of lading and other shipping documents;
(2) Information relating to the application for, grant of, or securing of waivers or other exemption from requirements imposed by foreign governments that cargo move on national-flag, conference, or non-conference vessels;
(3) Amount of brokerage, ocean transportation intermediary compensation or other charges collected or paid in connection with shipments in the affected trade; and
(4) such other information that the Commission considers relevant to discovering or determining the existence of general or special conditions unfavorable to shipping in the foreign trade of the United States.
(c) Any marine terminal operator to furnish any or all of the following information:
(1) Marine terminal facilities agreements, whether or not on file with the Commission, into which it has entered with any ocean carrier in the affected trade;
(2) Information for a representative period showing the difference between the rates agreed to for use of its facilities by any ocean carrier serving the affected trade pursuant to an agreement authorizing preferential treatment or lease terms and those rates which would otherwise have applied to such services or leases.
§ 550.203 Failure to provide information.
(a) A person who fails to file a report, answer, documentary material, or other information required under this subpart shall be liable to the United States Government for a civil penalty of not more than $5,000 for each day that the information is not provided.
(b) The Commission may, when there is a failure to produce any information ordered produced under § 550.201, make appropriate findings of fact and inferences, including the inference that conditions unfavorable to shipping in the foreign trade of the United States do exist.
Subpart C – Conditions Unfavorable to Shipping
§ 550.301 Findings.
For the purposes of this part, conditions created by foreign governmental action or competitive methods, pricing practices or other practices of owners, operators, agents or masters of foreign vessels are found unfavorable to shipping in the foreign trade of the United States, if such conditions:
(a) Impose upon vessels in the foreign trade of the United States fees, charges, requirements, or restrictions different from those imposed on other vessels competing in the trade, or preclude vessels in the foreign trade of the United States from competing in the trade on the same basis as any other vessel;
(b) Reserve substantial cargoes to the national flag or other vessels and fail to provide, on reasonable terms, for effective and equal access to such cargo by vessels in the foreign trade of the United States;
(c) Are discriminatory or unfair as between carriers, shippers, exporters, importers, or ports or between exporters from the United States and their foreign competitors and which cannot be justified under generally accepted international agreements or practices and which operate to the detriment of the foreign commerce or the public interest of the United States;
(d) Restrict or burden a carrier’s intermodal movements or shore-based maritime activities, including terminal operations and cargo solicitation; agency services; ocean transportation intermediary services and operations; or other activities and services integral to transportation systems; or
(e) Are otherwise unfavorable to shipping in the foreign trade of the United States.
Subpart D – Petitions for Section 19 Relief
§ 550.401 Who may file.
Any person who has been harmed by, or who can reasonably expect harm from, existing or impending conditions unfavorable to shipping in the foreign trade of the United States, may file a petition for relief under the provisions of this part.
§ 550.402 Filing of petitions.
All requests for relief from conditions unfavorable to shipping in the foreign trade must be by written petition. An original and fifteen copies of a petition for relief under the provisions of this part must be filed with the Secretary, Federal Maritime Commission, Washington, DC 20573. The petition must be accompanied by remittance of a $306 filing fee.
§ 550.403 Contents of petitions.
Petitions for relief from conditions unfavorable to shipping in the foreign trade of the United States shall set forth the following:
(a) A concise description and citation of the foreign law, rule, regulation, practice or competitive method complained of;
(b) A certified copy of any law, rule, regulation or other document involved and, if not in English, a certified English translation thereof;
(c) Any other evidence of the existence of such practice or competitive method;
(d) A clear description, in detail, of the harm already caused or which may reasonably be expected to be caused petitioner, including:
(1) Statistics for the representative period showing the type and amount of revenue loss or operating cost increase suffered or projected, such as a present or prospective cargo loss if harm is alleged on that basis. Such statistics shall include figures which permit comparison or computation of the proportional effect of the harm alleged. For example, when the harm alleged is loss of cargo, supporting evidence shall include the total cargo carried or projected in the trade for the period;
(2) Statistics or other evidence for the representative period showing increased costs, inferior services or other harm to cargo or other non-vessel interest if injury is claimed on that basis; and
(3) A statement as to why the period is representative.
(e) A recommended regulation, the promulgation of which will, in the view of the petitioner, adjust or meet the alleged conditions unfavorable to shipping in the foreign trade of the United States.
§ 550.404 Amendment or dismissal of petitions.
Upon the failure of a petitioner to comply with the provisions of this part, the petitioner will be notified by the Secretary and afforded reasonable opportunity to amend its petition. Failure to timely amend the petition may result in its dismissal. For good cause shown additional time for amendment may be granted.
Subpart E – Proceedings
§ 550.501 Participation of interested persons.
In the event that participation of interested persons is deemed necessary by the Commission, notice will be published in the
§ 550.502 Discovery.
The Commission may authorize a party to a proceeding to use depositions, written interrogatories, and discovery procedures that, to the extent practicable, are in conformity with the rules applicable in civil proceedings in the district courts of the United States.
§ 550.503 Subpoenas.
In proceedings under this part, the Commission may by subpoena compel the attendance of witnesses and the production of books, papers, documents, and other evidence.
§ 550.504 Witness fees.
In proceedings under this subpart, witnesses are, unless otherwise prohibited by law, entitled to the same fees and mileage as in the courts of the United States, subject to funds being provided by appropriations Acts.
§ 550.505 Failure to supply information.
For failure to supply information ordered to be produced or compelled by subpoena in proceedings under this part, the Commission may –
(a) After notice and an opportunity for hearing, suspend tariffs of a common carrier or that common carrier’s right to use the tariffs of conferences of which it is a member; or
(b) Assess a civil penalty of not more than $5,000 for each day that the information is not provided.
§ 550.506 Enforcement of orders.
In proceedings under this part, when a person violates an order of the Commission or fails to comply with a subpoena, the Commission may seek enforcement by a United States district court having jurisdiction over the parties.
§ 550.507 Postponement, discontinuance, or suspension of action.
The Commission may, on its own motion or upon petition, postpone, discontinue, or suspend any and all actions taken by it under the provisions of this part. The Commission shall postpone, discontinue or suspend any or all such actions if the President informs the Commission that postponement, discontinuance or suspension is required for reasons of foreign policy or national security.
§ 550.508 Publication, content, and effective date of regulation.
The Commission shall incorporate in any regulations adopted under the rules of this part a concise statement of their basis and purpose. Regulations shall be published in the
Subpart F – Corrective Actions
§ 550.601 Actions to correct unfavorable conditions.
Upon submission of a petition filed under the rules of this part, or upon its own motion, the Commission may find that conditions unfavorable to shipping in the foreign trade of the United States do exist, and may, without further proceedings, issue regulations which may:
(a) Impose equalizing fees or charges;
(b) Limit sailings to and from United States ports or the amount or type of cargo carried;
(c) Suspend, in whole or in part, tariffs and service contracts for carriage to or from United States ports, including a common carrier’s right to use tariffs of conferences and service contracts of agreements in United States trades of which it is a member for any period the Commission specifies;
(d) Suspend, in whole or in part, an ocean common carrier’s right to operate under an agreement, including any agreement authorizing preferential treatment at terminals or preferential terminal leases, whether filed with the Commission or not filed with the Commission pursuant to the exemptions granted in 46 CFR Part 535; or any agreement filed with the Commission authorizing space chartering, or pooling of cargo or revenues with other ocean common carriers;
(e) Impose a fee, not to exceed $1,000,000 per voyage;
(f) Request the collector of customs at the port or place of destination in the United States to refuse the clearance required by section 4197 of the Revised Statutes (46 U.S.C. 60105), to a vessel of a foreign carrier which is or whose government is identified as contributing to the unfavorable conditions described in subpart C;
(g) Request the collector of customs at the port or place of destination in the United States to collect any fees imposed by the Commission under paragraph (e) of this section;
(h) Request the Secretary of the department in which the Coast Guard is operating to deny entry, for purposes of oceanborne trade, of any vessel of a foreign carrier which is or whose government is identified as contributing to the unfavorable conditions described in subpart C, to any port or place in the United States or the navigable waters of the United States, or to detain any such vessel at the port or place in the United States from which it is about to depart for any other port or place in the United States; or
(i) Take any other action the Commission finds necessary and appropriate to adjust or meet any condition unfavorable to shipping in the foreign trade of the United States.
§ 550.602 Penalty.
A common carrier that accepts or handles cargo for carriage under a tariff or service contract that has been suspended under § 550.505 or § 550.601 of this part, or after its right to use another tariff or service contract has been suspended under those sections, is subject to a civil penalty of not more than $50,000 for each day that it is found to be operating under a suspended tariff or service contract.
PART 551 – ACTIONS TO ADJUST OR MEET CONDITIONS UNFAVORABLE TO SHIPPING IN THE U.S. FOREIGN TRADE
In accordance with 44 U.S.C. 3518(c)(1)(B), and except for investigations undertaken with reference to a category of individuals or entities (e.g., an entire industry), any information requests or requirements in this part 551 are not subject to the requirements of section 3507 of the Paperwork Reduction Act because such collections of information are pursuant to a civil, administrative action or investigation by an agency of the United States against specific individuals or entities.
§ 551.1 Actions to adjust or meet conditions unfavorable to shipping in specific trades.
Whenever the Commission determines that conditions unfavorable to shipping exist in the United States foreign trade with any nation and issues rules to adjust or meet such conditions, pursuant to section 19(1)(b) of the Merchant Marine Act, 1920 (46 U.S.C. 42101) and 46 CFR part 551, such rules shall be published in the
PART 555 – ACTIONS TO ADDRESS ADVERSE CONDITIONS AFFECTING U.S.-FLAG CARRIERS THAT DO NOT EXIST FOR FOREIGN CARRIERS IN THE UNITED STATES
In accordance with 44 U.S.C. 3518(c)(1)(B), and except for investigations undertaken with reference to a category of individuals or entities (e.g., an entire industry), any information requests or requirements in this part 555 are not subject to the requirements of section 3507 of the Paperwork Reduction Act because such collections of information are pursuant to a civil, administrative action or investigation by an agency of the United States against specific individuals or entities.
§ 555.1 Purpose.
It is the purpose of the regulations of this part to establish procedures to implement the Foreign Shipping Practices Act of 1988, as amended by the Ocean Shipping Reform Act of 1998, which authorizes the Commission to take action against foreign carriers, whose practices or whose government’s practices result in adverse conditions affecting the operations of United States carriers, which adverse conditions do not exist for those foreign carriers in the United States. The regulations of this part provide procedures for investigating such practices and for obtaining information relevant to the investigations, and also afford notice of the types of actions included among those that the Commission is authorized to take.
§ 555.2 Definitions.
For the purposes of this part:
(a) Common carrier, marine terminal operator, ocean transportation intermediary, ocean common carrier, person, shipper, shippers’ association, and United States have the meanings given each such term, respectively, in section 3 of the Shipping Act of 1984 (46 U.S.C. 40102);
(b) Foreign carrier means an ocean common carrier a majority of whose vessels are documented under the laws of a country other than the United States;
(c) Maritime services means port-to-port carriage of cargo by the vessels operated by ocean common carriers;
(d) Maritime-related services means intermodal operations, terminal operations, cargo solicitation, agency services, ocean transportation intermediary services and operations, and all other activities and services integral to total transportation systems of ocean common carriers and their foreign domiciled affiliates on their own and others’ behalf;
(e) United States carrier means an ocean common carrier which operates vessels documented under the laws of the United States;
(f) United States oceanborne trade means the carriage of cargo between the United States and a foreign country, whether direct or indirect, by an ocean common carrier;
(g) Voyage means an inbound or outbound movement between a foreign country and the United States by a vessel engaged in the United States oceanborne trade. Each inbound or outbound movement constitutes a separate voyage.
§ 555.3 Scope.
The Commission shall take such action under this part as it considers necessary and appropriate when it determines that any laws, rules, regulations, policies, or practices of foreign governments, or any practices of foreign carriers or other persons providing maritime or maritime-related services in a foreign country, result in conditions that adversely affect the operations of United States carriers in United States oceanborne trade, and do not exist for foreign carriers of that country in the United States under the laws of the United States or as a result of acts of United States carriers or other persons providing maritime or maritime-related services in the United States.
§ 555.4 Petitions.
(a) A petition for investigation to determine the existence of adverse conditions as described in § 555.3 may be submitted by any person, including any common carrier, shipper, shippers’ association, ocean freight forwarder, or marine terminal operator, or any branch, department, agency, or other component of the Government of the United States. Petitions for relief under this part shall be in writing, and filed in the form of an original and fifteen copies with the Secretary, Federal Maritime Commission, Washington, DC 20573. The petition must be accompanied by remittance of a $306 filing fee.
(b) Petitions shall set forth the following:
(1) The name and address of the petitioner;
(2) The name and address of each party (foreign government, agency or instrumentality thereof, carrier, or other person) against whom the petition is made, a statement as to whether the party is a foreign government, agency or instrumentality thereof, and a brief statement describing the party’s function, business or operation;
(3) The name and address of each United States carrier alleged to be adversely affected, and a description, and if possible, documentation, of why each is considered by petitioner to be a United States carrier;
(4) A precise description and, if applicable, citation of any law, rule, regulation, policy or practice of a foreign government or practice of a foreign carrier or other person causing the conditions complained of;
(5) A certified copy of any law, rule, regulation or other document involved and, if not in English, a certified English translation thereof;
(6) Any other evidence of the existence of such laws and practices, evidence of the alleged adverse effects on the operations of United States carriers in United States oceanborne trade, and evidence that foreign carriers of the country involved are not subjected to similar adverse conditions in the United States.
(7) With respect to the harm already caused, or which may reasonably be expected to be caused, the following information, if available to petitioner:
(i) Statistical data documenting present or prospective cargo loss by United States carriers due to foreign government or commercial practices for a representative period, if harm is alleged on that basis, and the sources of the statistical data;
(ii) Statistical data or other information documenting the impact of the foreign government or commercial practices causing the conditions complained of, and the sources of those data; and
(iii) A statement as to why the period used is representative.
(8) A separate memorandum of law or a discussion of the relevant legal issues; and
(9) A recommended action, including any of those enumerated in § 555.8, the result of which will, in the view of the petitioner, address the conditions complained of.
(c) A petition which the Commission determines fails to comply substantially with the requirements of paragraph (b) of this section shall be rejected promptly and the person filing the petition shall be notified of the reasons for such rejection. Rejection is without prejudice to the filing of an amended petition.
§ 555.5 Investigations.
(a) An investigation to determine the existence of adverse conditions as described in § 555.3 may be initiated by the Commission on its own motion or on the petition of any person pursuant to § 555.4. An investigation shall be considered to have been initiated for the purpose of the time limits imposed by the Foreign Shipping Practices Act of 1988 upon the publication in the
(b) The provisions of part 502 of this chapter (Rules of Practice and Procedure) shall not apply to this part except for those provisions governing ex parte communications (§ 502.11 of this chapter) and except as the Commission may otherwise determine by order. The precise procedures and timetables for participation in investigations initiated under this part will be established on an ad hoc basis as appropriate and set forth in the notice. Proceedings may include oral evidentiary hearings, but only when the Commission determines that there are likely to be genuine issues of material fact that cannot be resolved on the basis of written submissions, or that the nature of the matter in issue is such that an oral hearing and cross-examination are necessary for the development of an adequate record. In any event, investigations initiated under this part shall proceed expeditiously, consistent with due process, to conform with the time limits specified in the Foreign Shipping Practices Act and to identify promptly the conditions described in § 555.3 of this part.
(c) Upon initiation of an investigation, interested persons will be given the opportunity to participate in the proceeding pursuant to the procedures set forth in the notice. Submissions filed in response to a notice of investigation may include written data and statistics, views, and legal arguments. Factual information submitted shall be certified under oath. An original and 15 copies of such submissions will be filed with the Secretary, Federal Maritime Commission, Washington, DC 20573. Persons who receive information requests from the Commission pursuant to § 555.6 of this part are not precluded from filing additional voluntary submissions in accordance with this paragraph.
(d) An investigation shall be completed and a decision rendered within 120 days after it has commenced as defined in paragraph (a) of this section, unless the Commission determines that an additional 90-day period is necessary in order to obtain sufficient information on which to render a decision. When the Commission determines to extend the investigation period for an additional 90 days, it shall issue a notice clearly stating the reasons therefor.
§ 555.6 Information demands and subpoenas.
(a) In furtherance of this part, the Commission may, by order, require any person (including any common carrier, shipper, shipper’s association, ocean freight forwarder, or marine terminal operator, or any officer, receiver, trustee, lessee, agent or employee thereof) to file with the Commission any periodic or special report, answers to questions, documentary material, or other information which the Commission considers necessary or appropriate, and in the form and within the time prescribed by the Commission. Responses to such orders may be required by the Commission to be made under oath.
(b) The Commission may issue subpoenas to compel the attendance and testimony of witnesses and the production of records or other evidence as it deems necessary and appropriate in conducting an investigation under § 555.5 of this part.
(c) The Commission may, in its discretion, determine that any information submitted to it in response to a request (including a subpoena) under this section, or accompanying a petition under § 555.4, or voluntarily submitted by any person pursuant to § 555.5(c), shall not be disclosed to the public. To this end, persons submitting information for consideration in a proceeding or investigation under this part may indicate in writing any factors they wish the Commission to consider relevant to a decision on confidentiality under this section; however, such information will be advisory only, and the actual determination will be made by the Commission. In the event that a request for confidentiality is not accommodated, the person making the request will be so advised before any disclosure occurs.
§ 555.7 Notification to Secretary of State.
Upon publication of a petition in the
§ 555.8 Action against foreign carriers.
(a) Whenever, after notice and opportunity for comment or hearing, the Commission determines that the conditions specified in § 555.3 of this part exist, the Commission shall take such action as it considers necessary and appropriate against any foreign carrier which it identifies as a contributing cause to, or whose government is a contributing cause to, such conditions, in order to offset such conditions. Such action may include, but is not limited to:
(1) Limitations on sailings to and from United States ports or on the amount or type of cargo carried;
(2) Suspension, in whole or in part, of any or all tariffs or service contracts, including the right of an ocean common carrier to use any or all tariffs or service contracts of conferences in United States trades of which it is a member for such period as the Commission specifies;
(3) Suspension, in whole or in part, of the right of an ocean common carrier to operate under any agreement filed with the Commission, including agreements authorizing preferential treatment at terminals, preferential terminal leases, space chartering, or pooling of cargo or revenues with other ocean common carriers;
(4) Imposition of a charge, not to exceed $1,000,000 per voyage;
(5) A request to the collector of customs at any port or place of destination in the United States to refuse the clearance required by section 4197 of the Revised Statutes(46 U.S.C. 60105), to any vessel of a foreign carrier that is identified by the Commission under this section;
(6) A request to the Secretary of the department in which the Coast Guard is operating to deny entry, for purposes of oceanborne trade, of any vessel of a foreign carrier that is identified by the Commission under this section to any port or place in the United States or the navigable waters of the United States, or to detain any such vessel at the port or place in the United States from which it is about to depart for any other port or place in the United States; and
(7) Any other action the Commission finds necessary and appropriate to address adverse foreign shipping practices as described in § 555.3 of this part.
(b) The Commission may consult with, seek the cooperation of, or make recommendations to other appropriate U.S. Government agencies prior to taking any action under this action.
(c) Before any action against foreign carriers under this section becomes effective or a request under this section is made, the Commission’s determination as to adverse conditions and its proposed actions and/or requests shall be submitted immediately to the President. Such actions will not become effective nor requests made if, within 10 days of receipt of the Commission’s determination and proposal, the President disapproves it in writing, setting forth the reasons for the disapproval, if the President finds that disapproval is required for reasons of the national defense or the foreign policy of the United States.
PART 560 – ACTIONS TO ADDRESS CONDITIONS UNDULY IMPAIRING ACCESS OF U.S.-FLAG VESSELS TO OCEAN TRADE BETWEEN FOREIGN PORTS
In accordance with 44 U.S.C. 3518(c)(1)(B), and except for investigations undertaken with reference to a category of individuals or entities (e.g., an entire industry), any information request or requirement in this part is not subject to the requirements of section 3507(f) of the Paperwork Reduction Act because such collection of information is pursuant to a civil, administrative action or investigation by an agency of the United States against specific individuals or entities.
§ 560.1 Purpose; general provisions.
(a)(1) It is the purpose of this part to enumerate certain conditions resulting from the action of a common carrier, acting alone or in concert with any person, or a foreign government, which unduly impair the access of a vessel documented under the laws of the United States whether liner, bulk, tramp or other vessel, (hereinafter “U.S. flag vessel”) to ocean trade between foreign ports, which includes intermodal movements, and to establish procedures by which the owner or operator of a U.S. flag vessel (hereinafter “U.S. flag carrier”) may petition the Federal Maritime Commission for relief under the authority of section 13(b)(6)of the Shipping Act of 1984 (“the Act”) (46 U.S.C. 41108(d)).
(2) It is the further purpose of this part to indicate the general circumstances under which the authority granted to the Commission under section 13(b)(6) (46 U.S.C. 41108(d)) may be invoked, and the nature of the subsequent actions contemplated by the Commission.
(3) This part also furthers the goals of the Act with respect to encouraging the development of an economically sound and efficient U.S. flag liner fleet as stated in section 2 of the Act (46 U.S.C. 40101).
(b)(1) This part implements the statutory notice and hearing requirement and ensures that due process is afforded to all affected parties. At the same time, it allows for flexibility in structuring proceedings so that the Commission may act expeditiously whenever harm to a U.S. flag carrier resulting from impaired access to cross trades has been demonstrated or is imminent.
(2) The provisions of part 502 of this chapter (Rules of Practice and Procedure) shall not apply to this part except for those provisions governing ex parte communications (§ 502.11 of this chapter) and service of documents and copies of documents (§§ 502.114(b) and 502.118 of this chapter), and except as the Commission may otherwise determine by order.
(c) The condition of unduly impaired access will be found only where a U.S. flag carrier is commercially able to enter a trade in which its access is being unduly impaired, or is reasonably expected to be impaired, or where actual participation in a trade by a U.S. flag carrier is being restricted for reasons other than its commercial ability or competitiveness.
(d) In examining conditions in a trade between foreign ports, and in considering appropriate action, the Commission will give due regard to U.S. maritime policy and U.S. Government shipping arrangements with other nations, as well as the degree of reciprocal access afforded in U.S. foreign trades to the carriers of the countries against whom Commission action is contemplated.
§ 560.2 Factors indicating conditions unduly impairing access.
For the purpose of this part, factors which would indicate the existence of conditions created by foreign government action or action of a common carrier acting alone or in concert with any person, which unduly impair access of a U.S. flag vessel engaged in or seeking access to ocean trade between foreign ports, include, but are not limited to:
(a) Imposition upon U.S. flag vessels or upon shippers or consignees using such vessels, of fees, charges, requirements, or restrictions different from those imposed on national-flag or other vessels, or which preclude or tend to preclude U.S. flag vessels from competing in the trade on the same basis as any other vessel.
(b) Reservation of a substantial portion of the total cargo in the trade to national-flag or other vessels which results in failure to provide reasonable competitive access to cargoes by U.S. flag vessels.
(c) Use of predatory practices, possibly including but not limited to the use of a vessel or vessels in a particular trade for the purpose of excluding, preventing, or reducing competition by driving another ocean common carrier out of that trade, and closed conferences employing deferred rebates, which unduly impair access of a U.S. flag vessel to the trade.
(d) Any government or commercial practice that results in, or may result in, unequal and unfair opportunity for U.S. flag vessel access to port or intermodal facilities or services related to the carriage of cargo inland to or from ports in the trade.
(e) Any other practice which unduly impairs access of a U.S. flag vessel to trade between foreign ports.
§ 560.3 Petitions for relief.
(a) Filing. (1) Any owner or operator of a liner, bulk, tramp or other vessel documented under the laws of the United States who believes that its access to ocean trade between foreign ports has been, or will be, unduly impaired may file a written petition for relief under the provisions of this part.
(2) An original and fifteen copies of such a petition including any supporting documents shall be filed with the Secretary, Federal Maritime Commission, Washington, DC 20573. The petition must be accompanied by remittance of a $306 filing fee.
(b) Contents. Petitions for relief shall include the following and shall also include an affidavit attesting to the truth and accuracy of the information submitted:
(1) The name and address of the petitioner;
(2) The name and address of each party (foreign government, agency or instrumentality thereof, carrier, or other person) against whom the petition is made and a statement as to whether the party is a foreign government, agency or instrumentality thereof;
(3) A concise description and citation of the foreign law, rule or government or commercial practice complained of;
(4) A certified copy of any law, rule, regulation or other document concerned, when available and, if not in English, a certified English translation thereof;
(5) Any other information relating to any law, rule or regulation, or indicating the existence of any government or commercial practice;
(6) A description of the service offered or proposed, as a result of which petitioner is alleging harm, including information which indicates the ability of the petitioner to otherwise participate in the trade;
(7) A clear description, in detail, of the harm already caused, or which may reasonably be expected to be caused, to the petitioner for a representative period, including:
(i) Statistics documenting present or prospective cargo loss due to discriminatory government or commercial practices if harm is alleged on that basis; such statistics shall include figures for the total cargo carried or projected to be carried by petitioner in the trade for the period, and the sources of the statistics;
(ii) Information documenting how the petitioner is being prevented from entering a trade, if injury is claimed on that basis;
(iii) Statistics or other information documenting the impact of discriminatory government or commercial practices resulting in an increase in costs, service restrictions, or other harm on the basis of which injury is claimed, and the sources of the statistics; and
(iv) A statement as to why the period is representative.
(8) A separate memorandum of law or a discussion of the relevant legal issues.
(9) A recommended action, rule or regulation, the result of which will, in the view of the petitioner, address the alleged conditions unduly impairing the access of petitioner to the affected trade.
(c) Deficient petition. A petition which substantially fails to comply with the requirements of paragraph (b) of this section shall be rejected and the person filing the petition shall be notified of the reasons for such rejection. Rejection is without prejudice to filing of an amended petition.
§ 560.4 Proceeding.
(a) Upon the Commission’s own motion or upon the filing of a petition which meets the requirements of § 560.3, when there are indications that conditions unduly impairing the access of a U.S. flag vessel to trade between foreign ports may exist, the Commission will institute a proceeding pursuant to this part.
(b)(1) Notice of the institution of any such proceeding will be published in the
(2) Interested or adversely affected persons will be allowed a period of time to reply to the petition by the submission of written data, views or legal arguments pursuant to § 560.5 of this part. Factual submissions shall be in affidavit form.
(3) An original and 15 copies of such submissions will be filed with the Secretary, Federal Maritime Commission, Washington, DC 20573.
(c) Following the close of the initial response period, the Commission may issue a decision or order further hearings if warranted. If further hearings are ordered, they will be conducted pursuant to procedures to be outlined by the Commission in its order.
§ 560.5 Receipt of relevant information.
(a) In making its decision on matters arising under section 13(b)(6)of the Act (46 U.S.C. 41108(d)), the Commission may receive and consider relevant information from any owner, operator, or conference in an affected trade, or from any foreign government, either directly or through the Department of State or from any other reliable source. All such submissions should be supported by affidavits of fact and memorandum of law. Relevant information may include, but is not limited to:
(1) Statistics, with sources, or, if unavailable, the best estimates pertaining to:
(i) The total cargo carried in the affected liner or bulk trade by type, source, value, tonnage and direction.
(ii) Cargo carried in the affected trade on vessels owned or operated by any person or conference, by type, source, value, tonnage and direction.
(iii) The percentage such cargo carried is of the total affected liner or bulk trade, on a tonnage and value basis.
(iv) The amount of cargo reserved by a foreign government for national-flag or other vessels in the affected trade, on a tonnage and value basis, and a listing of the types of cargo and specific commodities which are reserved for national-flag or other vessels.
(2) Information on the operations of vessels of any party serving the affected trade, including sailings to and from ports in the trade, taxes or other charges paid to foreign authorities, and subsidies or other payments received from foreign authorities.
(3) Information clarifying the meaning of the foreign law, rule, regulation or practice complained of, and a description of its implementation.
(4) Complete copies of all conference and other agreements, including amendments and related documents, which apply in the trade.
(b) Once introduced or adduced, information of the character described in paragraph (a) of this section, and petitions and responses thereto, shall be made part of the record for decision and may provide the basis for Commission findings of fact and conclusions of law, and for the imposition of sanctions under the Act and this part.
§ 560.6 Notification to Secretary of State.
When there are indications that conditions unduly impairing the access of a U.S. flag vessel to trade between foreign ports may exist, the Commission shall so notify the Secretary of State and may request that the Secretary of State seek resolution of the matter through diplomatic channels. If request is made, the Commission will give every assistance in such efforts, and the Commission may request the Secretary to report the results of such efforts within a specified time period.
§ 560.7 Decision; sanctions; effective date.
(a) Upon completion of any proceeding conducted under this part, the Commission will issue and serve a decision on all parties.
(b) If the Commission finds that conditions unduly impairing access of a U.S. flag vessel to ocean trade between foreign ports exist, any of the following actions may be taken:
(1) Imposition of equalizing fees or charges applied in the foreign trade of the United States;
(2) Limitations on sailings to and from United States ports or on the amount or type of cargo carried;
(3)(i) Suspension, in whole or in part, of any or all tariffs or service contracts for carriage to or from United States ports for any period the Commission specifies, or until such time as unimpaired access is secured for U.S. flag carriers in the affected trade.
(ii) Acceptance or handling of cargo for carriage under a tariff that has been suspended, or after a common carrier’s right to utilize that tariff has been suspended pursuant to this part, will subject a carrier to the imposition of a civil penalty as provided under the Act (46 U.S.C. 41108(b)) of not more than $50,000 per shipment; and
(4) Suspension, in whole or in part, of the right of an ocean common carrier to operate under any agreement filed with the Commission, including agreements authorizing preferential treatment at terminals, preferential terminal leases, space chartering, or pooling of cargo or revenues with other ocean common carriers;
(5) Imposition of a charge not to exceed $1,000,000 per inbound or outbound movement between a foreign country and the United States by a vessel engaged in the United States oceanborne trade;
(6) A request to the collector of customs at any port or place of destination in the United States to refuse the clearance required by section 4197 of the Revised Statutes (46 U.S.C. 60105), to any vessel of a foreign carrier which is or whose government is identified as contributing to the conditions described in § 560.2 of this part;
(7) A request to the Secretary of the department in which the Coast Guard is operating to deny entry, for purposes of oceanborne trade, of any vessel of a foreign carrier which is or whose government is identified as contributing to the conditions described in § 587.2 of this part to any port or place in the United States or the navigable waters of the United States, or to detain any such vessel at the port or place in the United States from which it is about to depart for any other port or place in the United States; and
(8) Any other action the Commission finds necessary and appropriate to address conditions unduly impairing access of a U.S.-flag vessel to trade between foreign ports.
(c) If the Commission finds that conditions impairing access of a U.S. flag vessel to ocean trade between foreign ports has not yet occurred, and punitive sanctions are warranted, such sanctions will be imposed to become effective simultaneously with the implementation of the action that would unduly impair the access of a U.S. flag vessel.
(d)(1) All decisions will be published in the
(2) Decisions imposing sanctions, except where conditions warrant and for good cause, will become effective 30 days after the date of publication.
(e) Any party may file a petition to reconsider any decision under this part. Such a petition shall be served on all other parties to the proceeding and shall not, in and of itself, stay the effective date of the Commission action.
§ 560.8 Submission of decision to the President.
Concurrently with the submission of any decision imposing sanctions to the
§ 560.9 Postponement, discontinuance, or suspension of action.
(a) The Commission may, on its own motion or upon a petition, postpone, discontinue, or suspend any action taken by it under the provisions of this part. Such a petition will be served on all other parties and will not, in and of itself, stay the effective date of Commission action.
(b) The Commission shall postpone, discontinue or suspend any action provided for in its final decision if so directed by the President for reasons of national defense or foreign policy of the United States as provided in § 560.8.
PART 565 – CONTROLLED CARRIERS
§ 565.1 Purpose and scope.
(a) Purpose. The regulations of this part are intended to carry out the Commission’s mandate under section 9 of the Shipping Act of 1984 (46 U.S.C. 40701-40706), as amended by the Ocean Shipping Reform Act of 1998, to monitor the practices of controlled carriers and ensure that they do not:
(1) Maintain rates or charges in their tariffs and service contracts that are below a level that is just and reasonable; nor
(2) Establish, maintain or enforce unjust or unreasonable classifications, rules or regulations in those tariffs or service contracts which result or are likely to result in the carriage or handling of cargo at rates or charges that are below a just and reasonable level.
(b) Scope. The regulations contained in this part set forth the special procedures whereby controlled carriers’ tariffs and service contracts become effective and are reviewed by the Commission. These regulations in no way exempt controlled carriers from other Commission regulations or statutory authority to which they may otherwise be subject as ocean common carriers. These regulations apply to all controlled carriers operating in the foreign commerce of the United States unless excepted under section 9(f) of the Shipping Act of 1984 (46 U.S.C. 40706), as reflected by § 565.5.
§ 565.2 Definitions.
(a) Controlled carrier means an ocean common carrier that is, or whose operating assets are, directly or indirectly owned or controlled by a government. Ownership or control by a government shall be deemed to exist with respect to any ocean common carrier if:
(1) A majority portion of the interest in the carrier is owned or controlled in any manner by that government, by any agency thereof, or by any public or private person controlled by that government; or
(2) That government has the right to appoint or disapprove the appointment of a majority of the directors, the chief operating officer or the chief executive officer of the carrier.
(b) Effective date has the same meaning it has in 46 CFR part 520.
§ 565.3 Classification as controlled carrier.
(a) Notification. The Commission will periodically review the ocean common carriers operating in the foreign commerce of the United States and will notify any ocean common carrier of any change in its classification as a controlled carrier.
(b) Rebuttal of classification. (1) Any ocean common carrier contesting such a classification may, within 30 days after the date of the Commission’s notice, submit a rebuttal statement.
(2) The Commission shall review the rebuttal and notify the ocean common carrier of its final decision.
§ 565.4 Notification to Commission of change in control.
Whenever the operation, control or ownership of an ocean common carrier is transferred resulting in a majority portion of the interest of that ocean common carrier being owned or controlled in any manner by a government, the ocean common carrier shall immediately send written notification of the details of the change to the Secretary of the Commission. If a carrier is newly commencing ocean common carrier operations in a United States trade, and if a majority portion of the carrier is owned or controlled by a government, or if a government may approve or disapprove the majority of directors or the chief executive or operating officer of the carrier, the carrier shall immediately send written notification to the Secretary of the details of such ownership or control.
§ 565.5 Exceptions.
All controlled carriers shall be subject to provisions of this part and section 9 of the Shipping Act of 1984 (46 U.S.C. 40701-40706) except those which meet the following exceptions:
(a) When the vessels of the controlling state are entitled by a treaty of the United States to receive national or most-favored-nation treatment; or
(b) When the controlled carrier operates in a trade served exclusively by controlled carriers.
§ 565.6 Level of rates and charges generally.
No controlled carrier may maintain or enforce rates or charges in its tariffs or service contracts that are below a level that is just and reasonable. No controlled carrier may establish or maintain unjust or unreasonable classifications, rules, or regulations in its tariffs or service contracts. An unjust or unreasonable classification, rule or regulation means one that results or is likely to result in the carriage or handling of cargo at rates or charges that are below a just and reasonable level. See § 565.9(a)(2) (Rate standards).
§ 565.7 Effective dates.
(a) Generally. Except for service contracts, the rates, charges, classifications, rules or regulations of controlled carriers may not, unless the Commission has granted special permission, become effective sooner than the 30th day after the date of publication.
(b) Open rates – (1) Generally. Controlled carriers that are members of conference agreements publishing rates for commodities designated as open by the conference are subject to the 30-day controlled carrier notice requirement, except when special permission is granted by the Commission under § 565.8.
(2) Conference publication of reduced open rates. Notwithstanding paragraph (b)(1) of this section, a conference may, on less than 30 days’ notice, publish reduced rates on behalf of controlled carrier members for open-rated commodities:
(i) At or above the minimum level set by the conference; or
(ii) At or above the level set by a member of the conference that has not been determined by the Commission to be a controlled carrier subject to section 9 of the Shipping Act of 1984 (46 U.S.C. 40701-40706).
(c) Independent action rates of controlled carriers. Conferences may publish on behalf of their controlled carrier members lower independent action rates on less than 30 days’ notice, subject to the requirements of their basic agreements and subject to such rates being published at or above the level set by a member of the conference that has not been determined by the Commission to be a controlled carrier subject to section 9 of the Shipping Act of 1984.
§ 565.8 Special permission.
Section 8(d) of the Shipping Act of 1984 (46 U.S.C. 40501(e)) authorizes the Commission, in its discretion and for good cause shown, to permit increases or decreases in rates, or the issuance of new or initial rates, on less than statutory notice under § 565.7. Section 9(c) of the Shipping Act of 1984 (46 U.S.C. 40703, 40704(a)) authorizes the Commission to permit a controlled carrier’s rates, charges, classifications, rules or regulations to become effective on less than 30 days’ notice. The Commission may also in its discretion and for good cause shown, permit departures from the requirements of this part. The Commission will consider such requests for special permission by controlled carriers pursuant to its procedures set forth at 46 CFR part 520.
§ 565.9 Commission review, suspension and prohibition of rates, charges, classifications, rules or regulations.
(a)(1) Request for justification. Within 20 days of a request (with respect to its existing or proposed rates, charges, classifications, rules or regulations) from the Commission, each controlled carrier shall file a statement of justification that sufficiently details the controlled carrier’s need and purpose for such rates, charges, classifications, rules or regulations upon which the Commission may reasonably base its determination of the lawfulness thereof.
(2) Rate standards. (i) In determining whether rates, charges, classifications, rules or regulations by a controlled carrier are just and reasonable, the Commission shall take into account whether the rates or charges which have been published or assessed or which would result from the pertinent rates, charges, classifications, rules or regulations are below a level which is fully compensatory to the controlled carrier based upon that carrier’s actual or constructive costs.
(ii) For the purposes of paragraph (a)(2)(i) of this section, constructive costs means the costs of another carrier, other than a controlled carrier, operating similar vessels and equipment in the same or a similar trade.
(iii) The Commission may also take into account other appropriate factors, including, but not limited to, whether:
(A) The rates, charges, classifications, rules or regulations are the same as or similar to those published or assessed by other carriers in the same trade;
(B) The rates, charges, classifications, rules or regulations are required to assure movement of particular cargo in the trade; or
(C) The rates, charges, classifications, rules or regulations are required to maintain acceptable continuity, level or quality of common carrier service to or from affected ports.
(3) Time for determination. The Commission shall determine within 120 days of the receipt of information requested by the Commission under this section, whether the rates, charges, classifications, rules or regulations of a controlled carrier may be unjust and unreasonable. Whenever the Commission is of the opinion that the rates, charges, classifications, rules or regulations published or assessed by a controlled carrier may be unjust and unreasonable, the Commission shall issue an order to the controlled carrier to show cause why those rates, charges, classifications, rules or regulations should not be prohibited.
(b) Suspension. Pending a decision on whether to prohibit the rates, charges, classifications, rules or regulations of a controlled carrier, the Commission may suspend the rates, charges, classifications, rules or regulations. See § 565.10.
(c) Prohibition. The Commission shall prohibit the use of any rates, charges, classifications, rules or regulations that the controlled carrier has failed to demonstrate to be just and reasonable. In a proceeding under this paragraph, the burden of proof is on the controlled carrier to demonstrate that its rates, charges, classifications, rules or regulations are just and reasonable. The use of rates, charges, classifications, rules or regulations published or assessed by a controlled carrier that have been suspended or prohibited by the Commission is unlawful.
(d) Publication. All final orders of prohibition shall be published in the
§ 565.10 Suspension procedures, period of suspension, and replacement rates.
(a)(1) Suspension prior to effective date. Pending a determination as to their lawfulness in a prohibition proceeding as described in § 565.9, the Commission may suspend the rates, charges, classifications, rules or regulations at any time before their effective date.
(2) Suspension after effective date. In the case of rates, charges, classifications, rules or regulations that have already become effective, the Commission may, upon the issuance of an order to show cause, suspend those rates, charges, classifications, rules or regulations on not less than 30 days’ notice to the controlled carrier.
(b) Period of suspension. In any case, no period of suspension may be greater than 180 days.
(c) Implementation. (1) Upon issuance of an order suspending a rate, charge, classification, rule or regulation in whole or in part, the Commission shall direct the controlled carrier to remove the suspended material from its tariff publication; or
(2) if the matter subject to the suspension order is not covered by paragraph (c)(1) of this section, the Commission shall set forth procedures in the order for implementing the suspension.
(3) Publication. All orders of suspension shall be published in the
(d) Replacement rates. Controlled carriers may publish in tariffs or file in service contracts rates, charges, classifications, rules or regulations in lieu of the suspended matter (“replacement rates”).
(1) Effective date. In the case of replacement rates which are published in tariffs and which are scheduled to become effective during a suspension period, may become effective immediately upon either their publication in tariffs or upon the effective date of the suspension, whichever is later.
(2) Rejection of replacement rates. The Commission may reject the replacement rates, charges, classifications, rules or regulations published in tariffs or filed in service contracts to take effect during the suspension period if they are unjust and unreasonable. In determining whether to reject replacement rates, charges, classifications, rules or regulations, the Commission will consider whether they would result in total charges (i.e, rate plus applicable surcharges) that are lower than the lowest comparable charges effective for a common carrier, other than a controlled carrier, serving the same trade.
(3) At the same time it announces replacement rates, the controlled carrier shall submit to the Secretary of the Commission, a letter identifying the specific competing common carrier’s rates, charges, classification or rules resulting in total charges which are equal to or lower than its own.
§ 565.11 Presidential review.
The Commission shall transmit all orders of suspension or final orders of prohibition to the President of the United States concurrently with the submission of such orders to the
§ 565.12 Stay, postponement, discontinuance or suspension of action.
The Commission may, on its own motion or upon petition, postpone, discontinue, or suspend any and all actions taken by it under the provisions of this part. The Commission shall immediately stay the effect of any order issued under this part as requested by the President pursuant to § 565.11.
§ 565.13 OMB control number assigned pursuant to the Paperwork Reduction Act
The Commission has received OMB approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. In accordance with that Act, agencies are required to display a currently valid control number. The valid control number for this collection of information is 3072-0060.