[Federal Register: January 29, 2004 (Volume 69, Number 19)]
[Proposed Rules]
[Page 4271-4274]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29ja04-27]
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FEDERAL MARITIME COMMISSION
46 CFR Part 515
[Docket No. 04-02]
Optional Rider for Proof of Additional NVOCC Financial
Responsibility
AGENCY: Federal Maritime Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Maritime Commission proposes to amend its
regulations governing proof of financial responsibility for ocean
transportation intermediaries. The Commission proposes to allow an
optional rider for additional coverage to be filed with a licensed non-
vessel-operating common carrier's proof of financial responsibility for
such carriers serving the U.S. oceanborne trade with the People's
Republic of China.
DATES: Comments must be received no later than February 20, 2004.
Requests for meetings to make oral presentations to individual
Commissioners must be received, and the meetings completed, by this
date as well. Submit an original and 15 copies of comments (paper), or
e-mail comments as an attachment in WordPerfect 8, Microsoft Word 2000,
or earlier versions of these applications.
ADDRESSES: Address all comments concerning this proposed rule to:
Bryant L. VanBrakle, Secretary, Federal Maritime Commission, 800 North
Capitol Street, NW., Room 1046, Washington, DC 20573-0001, (202) 523-
5725, E-mail: secretary@fmc.gov.
FOR FURTHER INFORMATION CONTACT: Amy W. Larson, General Counsel,
Federal Maritime Commission, 800 North Capitol Street, NW., Room 1018,
Washington, DC 20573-0001, (202) 523-5740, E-mail:
GeneralCounsel@fmc.gov.
Sandra A. Kusumoto, Director, Bureau of Consumer Complaints and
Licensing, Federal Maritime Commission, 800 North Capitol Street, NW.,
Room 970, Washington, DC 20573-0001, (202) 523-5787, E-mail:
otibonds@fmc.gov.
SUPPLEMENTARY INFORMATION: On January 22, 2004, the Federal Maritime
Commission (``FMC'' or ``Commission'') granted in part and denied in
part a petition for rulemaking (``Petition'') from the National Customs
Brokers and Forwarders Association of America, Inc. (``NCBFAA'').
Petition No. P10-03, Petition of the National Customs Brokers and
Forwarders Association of America, Inc. for Rulemaking. NCBFAA, a trade
association representing licensed ocean transportation intermediaries
(``OTIs'') in the U.S., whose members it claims are linked to 90% of
the U.S. oceanborne cargo, petitioned the Commission to change its
rules to effectuate concessions made by the People's Republic of China
(``PRC'' or ``China'') in a recently concluded U.S.-China Agreement on
Maritime Transport (``Agreement''). The Agreement's associated
Memorandum of Consultations provides that the Chinese government will
not require U.S. NVOCCs to make a cash deposit in a Chinese bank, as
long as the NVOCC: (1) Is a legal person registered by U.S.
authorities; (2) obtains an FMC license as an NVOCC; and (3) provides
evidence of financial responsibility in the total amount of RMB 800,000
or U.S. $96,000. Therefore, it appears that an FMC-licensed NVOCC that
voluntarily provides an additional surety bond in the amount of
$21,000, which by its conditions is responsive to potential claims of
the Chinese Ministry of Communications (``MOC'') (as well as
[[Page 4272]]
other Chinese agencies) for violations of the RIMT, would be able to
register in the PRC without paying the cash deposit otherwise required
by Chinese law and regulation. However, because current FMC regulations
do not provide any mechanism for NVOCCs to file proof of such
additional financial responsibility with the FMC, the Commission
proposes to amend its regulations in order to permit licensed NVOCCs to
file such additional proof in the form of optional riders to the
required NVOCC bond.
The rule the Commission proposes differs from that requested by
NCBFAA in its Petition as described in the Commission's order granting
the Petition in part and denying it in part. The rule changes proposed
herein reflect the grant of that Petition in most substantive respects.
However, while NCBFAA's Petition requests a rule that would ``provide
that the bond would * * * be available for the payment of fines or
reparation awards,'' the language proposed by NCBFAA does not include
``reparation awards'' imposed by the Chinese Ministry of Communications
(``MOC''). NCBFAA Petition at 2. Thus, NCBFAA's request is internally
inconsistent. Therefore we are proposing a rule which would relate only
to ``fines and penalties'' imposed by MOC, as provided in NCBFAA's
proposed language for the optional rider form. Comments on the proposed
coverage of the optional rider are invited.
As requested by NCBFAA, the Commission proposes to amend its rules
to add a new subsection to provide for the optional rider at Sec.
515.25. As suggested by NCBFAA, the Commission proposes to provide for
group security bonds by the addition of Sec. 515.25(c), changes to Sec.
515.21(b), and the addition of Appendix F. Finally, the Commission
declines to propose changes requested by NCBFAA which would have the
effect of creating a procedure by which the Commission would administer
the payment of claims against these optional riders. NCBFAA Petition at
5. The Commission declines to propose such changes because it would be
inappropriate for the Commission to be involved in the collection of
claims arising from decisions of the MOC, whether involving
reparations, fines or penalties. The issuers of such bonds may wish to
propose language to be included in the optional rider itself that would
relate to procedures by which claims may be exercised against the
optional rider, such as whether the English language must be used for
all claims, whether the surety will not pay any claim earlier than 30
days after it has been notified of the claim, or what documentation the
surety will require before paying a claim. The Commission invites
comments on this issue.
Pursuant to Rule 53(a) of the Commission's Rules of Practice and
Procedure, 46 CFR 502.53(a), in notice-and-comment rulemakings the
Commission may permit interested persons to make oral presentations in
addition to filing written comments. The Commission has determined to
permit interested persons to make such presentations to individual
Commissioners in this proceeding, at the discretion of each
Commissioner.
Interested persons may request one-on-one meetings at which they
may make presentations describing their views on the proposed rule. Any
meeting or meetings shall be completed before the close of the comment
period. The summary or transcript of oral presentations will be
included in the record and must be submitted to the Secretary of the
Commission within 5 days of the meeting. Interested persons wishing to
make an oral presentation should contact the Office of the Secretary to
secure contact names and numbers for individual Commissioners.
In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et
seq., the Chairman of the Federal Maritime Commission certifies that
this rule, if promulgated, will not have a significant economic impact
on a substantial number of small entities. The Commission recognizes
that the majority of businesses that would be affected by this rule
qualify as small entities under the guidelines of the Small Business
Administration. The rule, however, would establish an optional
provision for U.S. licensed NVOCCs, which may be used at their
discretion. The rule would pose no economic detriment to small business
entities. Rather, it would provide a cost effective alternative, than
would otherwise be available, to assist licensed NVOCCs with their
business endeavors in the PRC. As such, the rule would help to promote
U.S. business interests in the PRC and facilitate U.S. foreign
commerce.
This regulatory action is not a ``major rule'' under 5 U.S.C.
804(2).
The collection of information requirements contained in this rule
have been submitted to the Office of Management and Budget for review
under section 3504(h) of the Paperwork Reduction Act of 1980, as
amended. Public reporting burden for this collection of information is
estimated to be 1 hour per response, including time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. Send comments regarding the burden estimate
or any other aspect of this collection of information, including
suggestions for reducing this burden, to Austin L. Schmitt, Deputy
Executive Director, Federal Maritime Commission, 800 North Capitol
Street, NW., Washington, DC 20573; and to the Office of Information and
Regulatory Affairs, Office of Management and Budget, Attention: Desk
Officer for the Federal Maritime Commission, Washington, DC 20503.
List of Subjects for 46 CFR Part 515
Common carriers, Exports, Non-vessel-operating common carriers,
Ocean transportation intermediaries, Financial responsibility
requirements, Reports and recordkeeping requirements, Surety bonds.
Accordingly, the Federal Maritime Commission proposes to amend 46
CFR part 515 subpart C as follows:
Subpart C--Financial Responsibility Requirements; Claims Against
Ocean Transportation Intermediaries
1. The authority citation for part 515 continues to read as
follows:
Authority: 5 U.S.C. 553; 31 U.S.C. 9701; 46 U.S.C. app. 1702,
1707, 1709, 1710, 1712, 1714, 1716, and 1718; Pub. L. 105-383, 112
Stat. 3411; 21 U.S.C. 862.
2. Revise 46 CFR 515.21(b) to add a new sentence at the end as
follows:
Sec. 515.21 Financial responsibility requirements.
* * * * *
(b) * * * A group or association of ocean transportation
intermediaries may also file an optional additional bond as provided
for by Sec. 515.25(c).
* * * * *
3. Amend 46 CFR 515.23 to add paragraph (d) to read as follows:
Sec. 515.23 Claims against an ocean transportation intermediary.
* * * * *
(d) The Federal Maritime Commission shall not serve as depository
or distributor to third parties of optional bond riders as described in
Sec. 515.25(c), Appendix E to Subpart C of this Part [Optional Rider to
Form FMC-48] or Appendix F to Subpart C of this Part [Optional Rider to
Form FMC-69]. Administration of claims against such optional bond
riders will be pursuant to the terms of the optional bond rider itself.
4. Revise 46 CFR 515.25 to add paragraph (c) to read as follows:
[[Page 4273]]
Sec. 515.25 Filing of proof of financial responsibility.
* * * * *
(c) Optional bond rider. Any person operating as an NVOCC in the
United States as defined by Sec. 515.2(o)(2), in addition to the bond
required by Sec. 515.21(a)(2), may file with the Commission proof of
additional financial responsibility in the form of a rider as provided
for in Appendix E or Appendix F of this Part.
5. Add Appendix E to read as follows:
Appendix E to Subpart C of Part 515--Optional Rider for Additional
NVOCC Financial Responsibility (Optional Rider to Form FMC-48) [Form
48A]
Form FMC-48A
RIDER
The undersigned [--------------], as Principal and [----------],
as Surety do hereby agree that the existing Bond No. [------] to the
United States of America and filed with the Federal Maritime
Commission pursuant to Section 19 of the Shipping Act of 1984 is
modified as follows:
1. The following condition is added to this Bond:
An additional condition of this Bond is that $[--------] shall
be available to pay any fines and penalties imposed by the Ministry
of Communications of the People's Republic of China or its
authorized competent communications department of the people's
government of the province, autonomous region or municipality
directly under the Central Government or the State Administration of
Industry and Commerce pursuant to the Regulations of the People's
Republic of China on International Maritime Transportation and the
Implementing Rules of the Regulations of the PRC on International
Maritime Transportation promulgated by MOC Decree No. 1, January 20,
2003. Such amount is separate and distinct from the bond amount set
forth in the first paragraph of this Bond. Payment under this Rider
shall not reduce the bond amount in the first paragraph of this
Bond.
2. The liability of the Surety shall not be discharged by any
payment or succession of payments pursuant to section 1 of this
Rider, unless and until the payment or payments shall aggregate the
amount set forth in section 1 of this Rider. In no event shall the
Surety's obligation under this Rider exceed the amount set forth in
section 1 regardless of the number of claims.
3. This Rider is effective the [------] day of [----------],
200[--], and shall continue in effect until discharged, terminated
as herein provided, or upon termination of the Bond in accordance
with the sixth paragraph of the Bond. The Principal or the Surety
may at any time terminate this Rider by written notice to the
Federal Maritime Commission at its office in Washington, DC. The
Surety also shall send notice to the Ministry of Communications of
the People's Republic of China via telecopier or e-mail. Evidence of
transmission of the notice to the Ministry of Communications shall
constitute proof of notice. Such termination shall become effective
thirty (30) days after receipt of said notice by the Commission, or
transmission of the notice to the Ministry of Communications,
whichever occurs later. The Surety shall not be liable for fines or
penalties imposed on the Principal after the expiration of the 30-
day period but such termination shall not affect the liability of
the Principal and Surety for any fine or penalty imposed prior to
the date when said termination becomes effective.
4. Bond No. [--------] remains in full force and effect
according to its terms except as modified above.
In witness whereof we have hereunto set our hands and seals on
this [----] day of [--------], 200[--],
[Principal]
By:
[Surety]
By:
Privacy Act and Paperwork Reduction Act Notice.
The collection of this information is authorized generally by
Section 19 of the Shipping Act of 1984, 46 U.S.C. app. Sec. 1718.
This is an optional form. Submission is completely voluntary.
Failure to submit this form will in no way impact the Federal
Maritime Commission's assessment of your firm's financial
responsibility.
You are not required to provide the information requested on a
form that is subject to the Paperwork Reduction Act unless the form
displays a valid OMB control number. Copies of this form will be
maintained until the corresponding license has been revoked.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated average time
is: Recordkeeping, 20 minutes; Learning about the form, 20 minutes;
Preparing and sending the form to the FMC, 20 minutes.
If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we would be
happy to hear from you. You can write to the Secretary, Federal
Maritime Commission, 800 North Capitol Street, NW, Washington, DC
20573-0001 or e-mail: secretary@fmc.gov.
6. Add Appendix F to read as follows:
Appendix F to Subpart C of Part 515--Optional Rider for Additional
NVOCC Financial Responsibility for Group Bonds [Optional Rider to Form
FMC-69] [Form 69A]
Form FMC-69A
RIDER
The undersigned [--------------], as Principal and [----------],
as Surety do hereby agree that the existing Bond No. [------] to the
United States of America and filed with the Federal Maritime
Commission pursuant to Section 19 of the Shipping Act of 1984 is
modified as follows:
1. The following condition is added to this Bond:
An additional condition of this Bond is that $[--------] shall
be available to any NVOCC enumerated in Appendix A to pay any fines
and penalties imposed by the Ministry of Communications of the
People's Republic of China or its authorized competent
communications department of the people's government of the
province, autonomous region or municipality directly under the
Central Government or the State Administration of Industry and
Commerce pursuant to the Regulations of the People's Republic of
China on International Maritime Transportation and the Implementing
Rules of the Regulations of the PRC on International Maritime
Transportation promulgated by MOC Decree No. 1, January 20, 2003.
Such amount is separate and distinct from the bond amount set forth
in the first paragraph of this Bond. Payment under this Rider shall
not reduce the bond amount in the first paragraph of this Bond. The
Surety shall indicate the amount available to pay such fines and
penalties on the Appendix A listing for each NVOCC wishing to
exercise this option.
2. The liability of the Surety shall not be discharged by any
payment or succession of payments pursuant to section 1 of this
Rider, unless and until the payment or payments shall aggregate the
amount set forth in section 1 of this Rider. In no event shall the
Surety's obligation under this Rider exceed the amount set forth in
section 1 regardless of the number of claims.
3. This Rider is effective the [------] day of [----------],
200[--], and shall continue in effect until discharged, terminated
as herein provided, or upon termination of the Bond in accordance
with the sixth paragraph of the Bond. The Principal or the Surety
may at any time terminate this Rider by written notice to the
Federal Maritime Commission at its office in Washington, DC. The
Surety also shall send notice to the Ministry of Communications of
the People's Republic of China via telecopier or email. Evidence of
transmission of the notice to the Ministry of Communications shall
constitute proof of notice. Such termination shall become effective
thirty (30) days after receipt of said notice by the Commission, or
transmission of the notice to the Ministry of Communications,
whichever occurs later. The Surety shall not be liable for fines or
penalties imposed on the Principal after the expiration of the 30-
day period but such termination shall not affect the liability of
the Principal and Surety for any fine or penalty imposed prior to
the date when said termination becomes effective.
4. Bond No. [--------] remains in full force and effect
according to its terms except as modified above.
In witness whereof we have hereunto set our hands and seals on
this [----] day of [--------], 200[--],
[Principal]
By:
[Surety]
By:
Privacy Act and Paperwork Reduction Act Notice.
The collection of this information is authorized generally by
Section 19 of the Shipping Act of 1984, 46 U.S.C. app. Sec. 1718.
This is an optional form. Submission is completely voluntary.
Failure to submit this
[[Page 4274]]
form will in no way impact the Federal Maritime Commission's
assessment of your firm's financial responsibility.
You are not required to provide the information requested on a
form that is subject to the Paperwork Reduction Act unless the form
displays a valid OMB control number. Copies of this form will be
maintained until the corresponding license has been revoked.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated average time
is: Recordkeeping, 20 minutes; Learning about the form, 20 minutes;
Preparing and sending the form to the FMC, 20 minutes.
If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we would be
happy to hear from you. You can write to the Secretary, Federal
Maritime Commission, 800 North Capitol Street, NW., Washington, DC
20573-0001 or e-mail: secretary@fmc.gov.
By the Commission.
Bryant L. VanBrakle,
Secretary.
[FR Doc. 04-1808 Filed 1-28-04; 8:45 am]
BILLING CODE 6730-01-P