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FMC Votes to Provide Regulatory Relief to Ocean Carriers, Update its Regulations

Monday, September 30, 2019
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission voted Sept. 26 to move forward with proposed rules to provide partial regulatory relief to ocean carriers, implement changes mandated by recent legislation, and publish a direct final rule to restructure how the agency oversees enforcement matters.

The Shipping Act requires vessel operating common carriers to publish concise statements of certain essential terms in tariff format when they file each service contract with the FMC. These essential terms include the origin and destination port ranges, the commodities involved, the minimum volume, and the service contract duration. The order approved by the FMC would exempt ocean carriers from publishing these essential terms of service contracts, although the FMC denied a second aspect of the World Shipping Council petition that also sought an exemption from service contract filing requirements. The order will now be finalized and a notice of proposed rulemaking to adopt this regulatory relief published.

The FMC also voted to update its regulations to:

- include provisions on “nonpublic collaborative discussions”;

- expand the class of persons that must be licensed as ocean transportation intermediaries and meet associated financial responsibility requirements;

- expand the prohibition on common carriers knowingly and willfully accepting or transporting cargo for OTIs that do not have a tariff or do not meet financial responsibility requirements;

- make clear that OTI licensing and financial responsibility requirements do not apply to a person performing OTI services on behalf of an OTI for which it is a disclosed agent; and

- make comments submitted to the FMC regarding filed ocean common carrier and marine terminal operator agreements confidential.

In addition, the FMC voted to issue a request for comments on a direct final rule creating a new enforcement process for its Bureau of Enforcement. The revised procedures will (1) provide notice to the subjects of investigations that BoE intends to recommend that the FMC initiate enforcement proceedings and allow them an opportunity to respond before BoE submits those recommendations, (2) require FMC approval before formal or informal enforcement action is taken, and (3) require FMC approval of any proposed informal compromise agreements.

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