|May 6, 2002|
Volume 6, Number 5
SIGNALS provides detailed information on the regulations and activities of the US Federal Maritime Commission (FMC), and related developments in the ocean freight industry. For past issues, please consult our index.
|FMC Collects $764,500 In Penalties: Compromise Agreements Announced|
The Federal Maritime Commission (FMC) announced that it has recently entered into compromise agreements which resulted in the collection of a total of $764,000 in civil penalties. These agreements are the result of investigations by the FMC’s Bureau of Enforcement into violations of the Shipping Acts by ocean carriers, NVOCCs and unlicensed entities. In concluding these compromises, the parties involved did not admit any violation of the Shipping Acts, and did not surrender any licenses. Details are as follows:
Air Sea Transport Inc. et al. A group of four "Air Sea Companies" entered into a joint settlement agreement with the FMC to settle alleged violations of the Shipping Acts involving the misdescription of commodities. The Air Sea Companies are comprised of Air Sea Transport Inc., a Taiwanese corporation; Air Sea Transport, Inc., a California corporation; Bondex China Co. Ltd., a Chinese corporation; and Bondex Air & Sea Logistics, Inc., a California corporation. The first three named companies each have separate NVOCC tariffs and bonds; Bondex Air & Sea Logistics is an applicant for OTI licensing. The FMC alleged that the Air Sea Companies obtained transportation of property at less than the applicable rates and charges by means of misdescription of the commodities shipped. The Air Sea Companies jointly paid FMC the sum of $60,000 to settle these allegations.
Bernuth Lines Ltd. This vessel operating common carrier located in Miami, Florida was alleged to have violated the Shipping Acts by providing service in the Caribbean and South America liner trades at rates and charges other than those contained in its published tariffs. Bernuth paid FMC the sum of $110,000 to settle.
De Well Container Shipping Corp. This New York based OTI-NVOCC acted as a service contract signatory and consignee on shipments from Shanghai, PRC that were misdescribed as to commodity, in apparent violation of the Shipping Act. Under the terms of the compromise, De Well Container paid the sum of $50,000.
Dole Ocean Cargo Express (Dole) of Jacksonville, Florida and King Ocean Central America, S.A. (King Ocean) of Miami, Florida are separately owned vessel operating common carriers participating in the Central America trades. The FMC alleged that Dole and King Ocean violated sections 5(a) and 10(a)(2) of the 1984 Act by failing to file a slot allocation agreement in a timely manner, and by knowingly and willfully operating pursuant to this unfiled agreement. Dole and King Ocean each made a payments of $40,000 to the FMC.
Eurasia Freight Service Inc. and Eurasia Express Co., Ltd. Eurasia Freight Service, Inc. (Eurasia Freight) is a tariffed, bonded and licensed NVOCC, with offices in Jamaica, New York and Los Angeles, CA. Eurasia Express Co., Ltd. (Eurasia Express) is not registered with the FMC; it is based in Shanghai, PRC, and serves primarily as origin/destination agent for Eurasia Freight. It was alleged that Eurasia Freight and Eurasia Express intentionally misdescribed commodities shipped. In addition, Eurasia Express executed service contracts and issued NVOCC bills of lading without having a valid tariff or bond in effect. Under the compromise, the parties paid $80,000 to the FMC.
Wallenius Wilhelmsen Lines AS, (WWL), a vessel operating common carrier located in Oslo, Norway, was alleged to have violated FMC regulations by filing and maintaining service contracts having incomplete, inaccurate or no certifications of shipper status. WWL paid $37,500 in settlement of these allegations.
Hanjin Shipping Company, Ltd., a vessel operating common carrier with headquarters in Seoul, Korea, was alleged to have violated the Shipping Act by collecting or receiving less or different compensation than the rates and charges shown in its service contracts. It was also alleged that Hanjin knowingly and willfully accepted cargo from or transported cargo for accounts of NVOCCs that did not have FMC tariffs and bonds, and that Hanjin knowingly and willfully entered into service contracts with NVOCCs that did not have tariffs and bonds as required by FMC regulations. In compromise of these allegations, Hanjin paid the sum of $280,000.
Servitrans, Inc, an OTI-NVOCC located in Houston, Texas, was alleged to have violated the Shipping Act by obtaining transportation at less than the applicable rates and charges provided in its service contracts, and by failing to charge the rates set forth in its own NVOCC tariff. Furthermore, it was alleged that for a period of time Servitrans operated as an NVOCC without a tariff and a surety bond on file with the Commission. In compromise of these allegations, Servitrans paid the sum of $45,000.
Top Cargo Inc. of Miami, Florida was alleged to have operated as an NVOCC in the USA without first obtaining an OTI license, without providing the Commission evidence of a bond or other form of security, and without publishing a NVOCC tariff. Additionally, Top Cargo is alleged to have shipped cargo of others under service contracts wherein Top Cargo identified itself as the beneficial owner of the cargo; and Top Cargo entered into a service contract as an NVOCC without first having obtained an OTI license. Top Cargo paid $22,000 in settlement of the allegations.
|Hudson Shipping (HK) Ltd. Investigated by FMC: Docket No 02-06|
The Federal Maritime Commission (FMC) has ordered a formal investigation and hearing into the activities of Hudson Shipping (Hong Kong) Ltd. d/b/a Hudson Express Lines, a Hong Kong based NVOCC. FMC Docket No. 02-06 alleges Hudson violated the Shipping Act by misuse of service contracts with several ocean carriers.
According to Docket No. 02-06, Hudson entered into service contracts with ocean carriers that did not include any affiliated shippers or NVOCCs, and which explicitly prohibited Hudson from permitting assignment or co-loading under the contracts. Hudson violated the Shipping Act and these contracts by permitting other NVOCCs to use its service contracts in order to obtain transportation for their shipments at rates less than those that should have been applicable. This was accomplished through a scheme initiated by Hudson whereby Hudson deceived the ocean common carriers as to the true identity of the shipper. Hudson received compensation from the NVOCCs for each instance in which the NVOCCs assumed Hudson’s identity and used its service contracts. In addition, as a result of allowing other NVOCCs to use its service contracts, Hudson avoided the payment of liquidated damages for failure to ship the minimum quantity required under one service contract.
The allegations reported in Docket 02-06, if proven, could result in penalties of US$ 30,000 per violation. Violations of the Shipping Act that are committed knowingly and willfully are subject to these penalties. The FMC investigation and hearing will determine if Hudson violated the Shipping Act. If violations are found the Commission will decide whether civil penalties should be assessed, the amount of the penalty, and whether a cease and desist order must be issued. This initial decision of the FMC’s Administrative Law Judge in this matter is due by April 7, 2003.
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