December 1, 1998   Oakland, California

SIGNALS™ provides detailed information on the regulations and activities of the US Federal Maritime Commission (FMC), and related developments in the ocean freight industry.

Anti-Rebating Certification Requirements: Waived by FMC for 1999

The FMC requirement for Anti-Rebating Certification has been waived for 1999. Due to this waiver the chief executive officers of common carriers, NVOCCs and freight forwarders will not be required to file certifications by December 31, 1998. This action is being taken to alleviate the filing burden on the public and the collection burden on the Commission, in light of changes made by the Ocean Shipping Reform Act of 1998 (OSRA) which removes the filing requirement on May 1, 1999, when OSRA becomes effective.

This waiver is strictly for administrative convenience. In an order issued November 18, 1998, the FMC makes clear that the Shipping Act, as current in force, and as amended by OSRA, prohibits the payment, receipt or solicitation of illegal rebates. This waiver of certification requirements does not modify, in any manner, the Commission’s enforcement obligations or efforts with respect to past or future rebate activity. All persons and organizations subject to the FMC’s jurisdiction are still prohibited from engaging in illegal rebating, and are required to cooperate with the Commission in its efforts to end illegal rebating.

FMC Begins to Issue Proposed Rules: Implementing the Ocean Shipping Reform Act

At a meeting held in Washington on November 24, the FMC Commissioners approved the publication of the first two of several proposed rulemakings to be undertaken implementing the Ocean Shipping Reform Act of 1998 (OSRA). Additionally, the Commission announced its intended general reorganization of the Code of Federal Regulations Title 46 (CFR-46) Parts 500-588.

The proposed revisions to CFR-46 will organize FMC’s regulations in three subchapters. Subchapter A (Parts 501-508) will continue to set forth general and administrative provisions. Subchapter B (Parts 515-545) will contain all of the Commission's basic regulations concerning operations in the U.S. foreign commerce, including tariff publication regulations. Subchapter C (Parts 550-565) will be set aside to cover matters involving the restrictive maritime practices of foreign governments and controlled carriers.

The two proposals adopted 24Nov1998 are:

(1) Miscellaneous Amendments to Rules of Practice and Procedure which make changes to the rules of practice necessitated by OSRA, such as special docket procedures, and petitions for exemptions; makes a number of routine administrative changes, and makes certain other revisions to clarify the rules.

(2) Amendments to Regulations Governing Restrictive Foreign Shipping Practices, and New Regulations Governing Controlled Carriers which update and clarify rules implementing section 19 of the Merchant Marine Act, 1920, sections 9 and 13(b)(5) of the Shipping Act of 1984, and the Foreign Shipping Practices Act of 1988 to reflect changes made by the Ocean Shipping Reform Act of 1998.

FMC Sets Timetable for New Rules: Implementing the Ocean Shipping Reform Act

At its meeting on November 24, the Commission also announced that it would be considering additional rules implementing provisions of the Ocean Shipping Reform Act of 1998 at meetings on December 2 and December 9, 1998. The tentative agendas for these meetings would include new rules dealing with Agreements, Marine Terminal Operator Schedules, and Ocean Transportation Intermediaries on December 2 and rules dealing with Private Tariff Systems and Service Contracts on December 9.

The Commission indicated that it intends to provide a 30-day comment period for each of the proposed rulemakings, but because of the statutory mandate to have all final rules issued by March 1, 1999, the FMC will not be in a position to approve requests for extensions to the comment periods. The final rules will become effective on May 1, 1999.

New FMC Commissioner Appointed: John A. Moran, former US Senate Counsel

In late October the US Senate approved the appointment of Mr. John A. Moran as FMC Commissioner. Mr. Moran has been appointed to a term which will expire June 30, 2000. Mr. Moran most recently was the Vice President for legislative affairs at the American Waterways Operators, a national trade association representing the inland and coastal tugboat, towboat, and barge industry. Mr. Moran's Congressional experience includes service as senior counsel for the Senate Merchant Marine Subcommittee, legislative counsel for Senator John Warner (R-VA), and senior counsel for the House Committee on Merchant Marine and Fisheries. Mr. Moran also has practiced law in Norfolk, VA, and was a judicial clerk. Mr. Moran will take the seat of Commissioner Joe Scroggins, who has served since 1994.

Docket 98-19: World Line Shipping, Possible Violations of the Shipping Act

By this docket issued November 9, the FMC began an official proceeding against World Line Shipping, Inc., also doing business as World Line Shipping and World Line Shipping International Shipping Co. Also named in the docket are Saeid B. Maralan (aka Sam Bustani), the President and owner of World Line Shipping, Inc. and Atlas World Line, Inc., another company owned by Mr. Bustani. World Line Shipping, Inc. is registered with the FMC as an NVOCC and maintains a tariff and bond; Atlas World Line, Inc. is not registered. Mr. Bustani is not licensed by the FMC as an ocean freight forwarder.

According to documents obtained by the FMC it appears that from at least March 30, 1997 until April 21, 1998, Mr. Bustani acted as both a freight forwarder and as an NVOCC using the various company names listed above. Shipments were contracted with ocean common carriers under the names of actual shippers, as well as under the names of NVOCCs not registered with the FMC. A formal investigation has been instituted by the FMC to determine whether Mr. Bustani and his various companies violated the Shipping Act, and, if violations are found, to determine if civil penalties should be assessed.

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Vol. 2, No. 8, December 1, 199