[Federal Register: October 3, 2007 (Volume 72, Number 191)]
[Rules and Regulations]
[Page 56272-56273]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03oc07-12]
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FEDERAL MARITIME COMMISSION
46 CFR Part 515
[Docket No. 07-06]
RIN 3072-AC33
Amendment to Regulations Governing the Filing of Proof of
Financial Responsibility
September 27, 2007.
AGENCY: Federal Maritime Commission.
ACTION: Final Rule.
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SUMMARY: The Federal Maritime Commission (``FMC'' or ``Commission'')
amends its regulations governing proof of financial responsibility for
ocean transportation intermediaries (``OTIs'') required to be filed
prior to commencement of OTI services. The amendment reduces the amount
of time an applicant has to file the requisite proof of financial
responsibility from two years to 120 days, after approval of the
applicant's license application. Upon expiration of the 120-day time
period, if valid proof of financial responsibility has not been
provided by the applicant, its OTI application will be considered
invalid. Applications approved prior to the effective date of this
Final Rule will continue to be subject to the two-year time period to
submit valid proof of financial responsibility.
DATES: Effective November 5, 2007.
FOR FURTHER INFORMATION CONTACT: Sandra L. Kusumoto, Director, Bureau
of Certification and Licensing, Federal Maritime Commission, 800 N.
Capitol Street, NW., Room 970, Washington, DC 20573-0001.(202) 523-
5787, e-mail: skusumoto@fmc.gov.
Amy W. Larson, General Counsel, Office of the General Counsel,
Federal Maritime Commission, 800 N. Capitol Street, NW., Room 1018,
Washington, DC 20573-0001. (202) 523-5740, e-mail:
generalcounsel@fmc.gov.
SUPPLEMENTARY INFORMATION: The Commission published a Notice of
Proposed Rulemaking (``NPRM'') on July 25, 2007, in the Federal
Register, 72 FR 40813-14, to amend its regulations at 46 CFR 515.25(a)
to require an applicant for an OTI license to provide valid proof of
financial responsibility within 120 days of approval of its
application, prior to issuance of a license by the Commission's Bureau
of Certification and Licensing. The current regulation allows an
applicant two years from the date of approval in which to furnish proof
of financial responsibility, failing which the application will be
considered invalid by the Commission.
The Commission proposed this change for two reasons. First, if
applicants illegally provide OTI services in the two years following
approval but before procurement of financial responsibility, the
statutory goal of protecting the shipping public is frustrated. Second,
applicants' inability or unwillingness to procure financial
responsibility may indicate questionable financial integrity, a key
factor in establishing an applicant's fitness to perform OTI
activities.
BCL staff analysis shows that the majority of new applicants obtain
surety bonds within 120 days or less. Therefore, reducing the time for
providing proof of valid financial responsibility to 120 days is
unlikely to burden OTI applicants.
The Commission received two comments to its NPRM. The
Transportation Intermediaries Association (``TIA''), whose members
include OTIs, supports the Commission's proposal to reduce the amount
of time from two years to 120 days. TIA states that its member
companies are put at a competitive disadvantage when other OTIs do not
comply with laws or regulations. The National Industrial Transportation
League (``NITL'') also provided comments in support of the NPRM. NITL's
members include OTIs and entities that use the services of OTIs. Both
TIA and NITL believe that reducing the time for OTI applicants to
provide proof of responsibility prior to offering OTI services will
better protect the shipping public.
OTI applicants whose applications were approved prior to the
effective date of the Final Rule will continue to have two years from
approval in which to furnish proof of financial responsibility. If no
proof is furnished within this period, the OTI application would be
considered invalid, thereby requiring the filing of a new application.
Any new application will be subject to the 120-day period for filing
evidence of financial responsibility.
In addition, the Commission amends 46 CFR 515.25(a) by deleting
reference to supplementary investigations for the determination of an
applicant's continued qualification, if more than six months elapse
between approval of the application and an applicant's submission of
financial responsibility to the Commission. The supplementary
investigations will become unnecessary due to the reduction of time the
applicant is permitted to obtain financial responsibility. Removal of
the option of supplementary investigation from 46 CFR 515.25(a)
likewise necessitates removing paragraph 515.5(b)(3), since the
collection of fees for supplementary investigations will no longer be
applicable.
This rule is not a ``major rule'' under 5 U.S.C. 804(2) and
therefore is not subject to review by the Office of Management and
Budget's Office of Information and Regulatory Affairs.
In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et
seq., the Federal Maritime Commission has certified to the Chief
Counsel for Advocacy, Small Business Administration, that the rule will
not have a significant impact on a substantial number of small
entities. The rule directly applies to the licensing requirements of
OTIs, which are regulated persons (or businesses) under the
Commission's jurisdiction and
[[Page 56273]]
which qualify as small entities under the guidelines of the Small
Business Administration. The rule will decrease the amount of time an
applicant has to file the requisite proof of financial responsibility
upon approval of applicant's license application, from two years to 120
days. The modifications in the rule will simplify the OTI licensing
application process and increase administrative efficiency, while
further serving to safeguard the shipping public from unlicensed
operators. The rule imposes no new or additional cost burden on persons
applying for an OTI license, nor will it have a harmful effect on the
general public, the U.S. economy, or any of the regulated entities
under the jurisdiction of the Commission. In its NPRM, the Commission
stated its intention to certify this rulemaking. No comments from
interested parties contested the Commission's certification. Thus, the
rule is hereby certified.
The rule contains no additional information collection or
recordkeeping requirements. Therefore, the requirements of the
Paperwork Reduction Act, 44 U.S.C. 3501 et seq., do not apply.
List of Subjects in 46 CFR Part 515
Common carriers, Exports, Non-vessel-operating common carriers,
Ocean transportation intermediaries, Financial responsibility
requirements, Reporting and recordkeeping requirements, Surety bonds.
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Accordingly, the Federal Maritime Commission amends 46 CFR part 515 as
follows:
PART 515--LICENSING, FINANCIAL RESPONSIBILITY REQUIREMENTS, AND
GENERAL DUTIES FOR OCEAN TRANSPORTATION INTERMEDIARIES
0
1. The authority citation for part 515 is revised 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 (recodified October
2006 as 46 U.S.C. 305, 40102, 40104, 40501-40503, 40901-40904,
41101-41106, 41107-41109, 41301-41302, 41305-41307, 42101, and
42301-42307); Pub. L. 105-383, 112 Stat. 3411; 21 U.S.C. 862.
Sec. 515.5 [Amended]
0
2. In Sec. 515.5, remove paragraph (b)(3).
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3. Amend Sec. 515.25(a) by removing the fourth sentence and revising
the last sentence to read as follows:
Sec. 515.25 Filing of proof of financial responsibility.
(a) * * * Should the applicant not file the requisite proof of
financial responsibility within 120 days of notification, the
Commission will consider the application to be invalid.
* * * * *
By the Commission.
Bryant L. VanBrakle,
Secretary.
[FR Doc. E7-19464 Filed 10-2-07; 8:45 am]
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