FMC Orders Investigation to Determine Whether Three NVOCCs Violated the Shipping Act by Transporting Cargo for OTIs Without Tariffs and Bonds, Etc.
The Federal Maritime Commission (FMC) has issued an order of investigation and hearing concerning whether three licensed non-vessel operating common carriers (NVOCCs) violated, among other things, section 10(b)(11) of the Shipping Act of 1984 and the FMC's regulations at 46 CFR 515.27 by knowingly and willfully accepting cargo from or transporting cargo for the account of an ocean transportation intermediary (OTI) that did not have a tariff and a bond as required under sections 8 and 19 of the Shipping Act.
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The FMC's investigation will pertain to the actions of the following NVOCCs:
EuroUSA Shipping, Inc. According to the FMC, EuroUSA of Jessup, MD maintains an NVOCC bond in the amount of $75,000. Based on the evidence available to the FMC, it appears that between February 2004 and December 2005, EuroUSA knowingly and willfully accepted cargo from or transported cargo for the account of several OTIs that did not have tariffs and bonds as required.
Tober Group, Inc. The FMC states that Tober of Brooklyn, NY maintains an NVOCC bond in the amount of $75,000 and an ocean freight forwarder (OFF) bond in the amount of $50,000. Tober also publishes an electronic tariff that covers a single commodity of "Cargo, N.O.S." and the tariff rate has not been updated since its original issue on January 7, 2004. The tariff rate for Tober's N.O.S. cargo is $500 per 1,000 kilograms or 1 cubic meter, whichever yields the higher amount.
The FMC states that based on the evidence available, it appears that between May 2004 and December 2005, Tober knowingly and willfully accepted cargo from or transported cargo for the account of several OTIs that did not have tariffs and bonds as required. In addition, it appears that from at least January 2004, Tober has provided liner service to its shippers that was not in accordance with the $500 Cargo, N.O.S. rate published in its electronic tariff.
Container Innovations, Inc. With regard to Container Innovations of Kearny, NJ, the FMC states that it maintains an NVOCC bond in the amount of $75,000. Based on the evidence available, it appears that between September 2004 and March 2006, Container Innovations knowingly and willfully accepted cargo from or transported cargo for the account of several OTIs that did not have tariffs and bonds as required.
FMC to Determine if Violations Occurred, if Penalties Should be Assessed, Etc.
The FMC has ordered an investigation to determine whether these NVOCCs violated the provisions of the Shipping Act and the FMC regulations described above. In addition, the investigation will also determine whether civil penalties should be assessed, and if so, the amount of such penalties. In addition, the FMC will determine whether, in the event violations are found, appropriate cease and desist orders should be issued. The FMC will also determine whether such violations constitute grounds for the revocation of any respondent's OTI license.
According to the FMC, the administrative law judge's initial decision will be issued by May 11, 2007 and the FMC's final decision will be issued by September 11, 2007.
The FMC's order states that a hearing may take place; however, FMC sources indicate that no date has been set and such investigations are often settled without a hearing. If a hearing is held, notice will be provided in the Federal Register.
FMC Order of Investigation and Hearing (D/N 06-06, FR Pub 05/24/06, served 05/11/06) available athttp://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/E6-7874.pdf