FMC Announces $490K in Penalties in Compromise Agreements with 8 NVOCCs
On February 15, 2012, the Federal Maritime Commission announced that five compromise agreements have been reached for a total of $490,000 in civil penalties for alleged violations of the Shipping Act. The agreements were reached with eight non-vessel-operating common carriers (NVOCCs) and related companies providing ocean transportation services.
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The compromise agreements are as follows:
3 NVOCCs Paid $235K for Applying Reduced Rates in Service Contracts, Etc.
FMC staff alleged that Orient Express Container Co. Ltd. (a tariffed and bonded NVOCC in the British Virgin Islands), and OEC Freight (NY) Inc. and O.E.C. Shipping Los Angeles Inc. (both licensed NVOCCs and freight forwarders) violated the Shipping Act by knowingly and willfully applying reduced rates in service contracts, contrary to contract provisions limiting application of such reduced rates to certain "named accounts." FMC staff alleged that Orient Express Container also violated the Shipping Act by providing service that was not in accordance with the rates or charges contained in its NVOCC tariff. Under the terms of the compromise, the three companies paid $235,000 in civil penalties.
CA NVOCC Paid $105K for Misdescribing Cargo in Service Contracts, Etc.
FMC staff alleged that Solex Logistics Inc., a licensed and bonded NVOCC located in California, violated the Shipping Act by knowingly and willfully misdescribing cargo under applicable service contracts, and by failing to charge its applicable NVOCC rates. Under the terms of the compromise, Solex Logistics paid $105,000 in civil penalties.
2 NVOCCs Paid $75K for Misdescribing Cargo Under Contracts for Lower Rates
Pan-Link International Corp. and Pacific Star International Logistics (China) Co. Ltd. are alleged to have violated the Shipping Act by knowingly and willfully obtaining ocean freight transportation at less than the rates and charges that would otherwise be applicable by misdescribing cargo under applicable service contracts. Under the terms of the compromise, the two companies made payment of $75,000 in civil penalties.
NY NVOCC Paid $40K for Misdescribing Commodities in Service Contracts
FMC staff alleged that JIF Logistics Inc., a licensed NVOCC located in New York, knowingly and willfully misdescribed commodities under its applicable service contracts, in violation of the Shipping Act. Under the terms of the compromise, JIF Logistics paid $40,000 in civil penalties.
2 NVOCCs Paid $35K for Obtaining Service Under Contract They Weren't Party to, etc.
Wanda Shipping Company Inc., which was a licensed and bonded NVOCC at the time of the alleged violations, and Heng Shen USA Inc., a related company that operates as a trading company, are alleged to have violated the Shipping Act by knowingly and willfully obtaining transportation under service contracts to which they were not a party. Wanda Shipping is also alleged to have unlawfully allowed others to obtain transportation using its corporate name and service contracts. Under the terms of the compromise, the two companies paid $35,000 in civil penalties.