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FMC Approves Overhaul of OTI Regulations, Will Examine Service Contract Rules

Monday, October 26, 2015
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission voted Oct. 21 to issue a final rule overhauling its regulations on ocean transportation intermediary licensing and financial responsibility requirements. The FMC also directed its staff to prepare an advance notice of proposed rulemaking concerning service contracts and non-vessel-operating common carrier service arrangements.

The FMC states that under the forthcoming OTI rules, beginning in late 2016 OTIs will be required to renew their licenses every three years through an online portal. In addition, an expedited hearing process will be provided for license denials, revocations or suspensions. The FMC gave no indication of any changes from the proposed rule, which is described in detail here.

Commissioner Rebecca Dye said she opposed the final rule because it “focuses on our own internal regulatory challenges and imposes new regulatory requirements on the entire OTI industry without adequate justification.” Dye said that the rule “does not address demonstrable harm in the international supply chain” and that she believes the FMC should instead be focusing on the problems that have been identified by the commercial OTI industry, such as fraud, cargo theft, deceptive pickup transportation crimes, and regulatory burdens such as tariff publication and inflexible service contract filing.

The FMC did address at least one of those issues at its Oct. 21 meeting by voting to seek comment on its service contract rules to clarify, update, encourage leveraging technology and provide regulatory relief where possible. The ANPR will be published for comment by the end of 2015.

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