[Senate Report 105-61]
[From the U.S. Government Publishing Office]
Calendar No. 144
105th Congress Report
SENATE
1st Session 105-61
_______________________________________________________________________
OCEAN SHIPPING REFORM ACT
_______
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 414
July 31, 1997.--Ordered to be printed
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington WENDELL H. FORD, Kentucky
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA SNOWE, Maine JOHN F. KERRY, Massachusetts
JOHN ASHCROFT, Missouri JOHN B. BREAUX, Louisiana
BILL FRIST, Tennessee RICHARD H. BRYAN, Nevada
SPENCER ABRAHAM, Michigan BYRON L. DORGAN, North Dakota
SAM BROWNBACK, Kansas RON WYDEN, Oregon
John Raidt, Staff Director
Ivan A. Schlager, Democratic Chief Counsel and Staff Director
Calendar No. 144
105th Congress Report
SENATE
1st Session 105-61
_______________________________________________________________________
OCEAN SHIPPING REFORM ACT
_______
July 31, 1997.--Ordered to be printed
_______________________________________________________________________
Mr. McCain, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 414]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 414) ``A Bill to amend the
Shipping Act of 1984 to encourage competition in international
shipping and growth of United States imports and exports, and
for other purposes'', having considered the same, reports
favorably thereon with an amendment in the nature of a
substitute and recommends that the bill (as amended) do pass.
Purpose of the Bill
S. 414, the Ocean Shipping Reform Bill of 1997, would amend
the Shipping Act of 1984 (46 U.S.C. App. 1701 et seq.), and
other related U.S. shipping laws to encourage competition in
international shipping, growth in United States exports, and
the increased use of United States ports for international
trade, and for other purposes.
BACKGROUND AND NEEDS
Ocean liner shipping is an international industry involving
trade between sovereign nations, and the industry is subject to
multinational regulation. The international nature of the
industry has been characterized by chronic conditions of
carrier overcapacity. The primary cause of liner shipping
overcapacity is the presence of international policies designed
to promote national-flag carriers and also to ensure strong
shipbuilding capacity in the interests of national security and
employment. These policies include subsidies to purchase ships
and operate ships, tax advantages to lower costs, cargo
reservation schemes, and national control of shipyards and
shipping companies and have resulted in an industry which is
not completely driven by economic objectives.
Expansion of the liner shipping industry has increased every
year since the utilization of containerization in the late
1960's, and in the 1990's, container port handling has risen at
nearly 10% per annum. According to a Drewry shipping report on
Global Container Markets--Prospect and Profitability in a High
Growth Era (1996): ``Global ocean and intermodal container
freight revenue is around $80-90 billion per annum, and while
this is rising annually with the expansion of world container
trade, unit revenues are, and have been consistently falling.
For instance, in the transpacific trade, average unit revenues
were 60% less in real terms in 1994 than in 1976. The
transatlantic market presents a broadly similar picture, and
average westbound earnings in 1994 (post-Trans-Atlantic
Agreement and Trans-Atlantic Conference Agreement rate
restoration) were just 46% of 1978's level in real terms,
having reached as low as 35% at the bottom of the market in
1992.'' The primary causes for reductions in unit revenues per
box, in real terms, continue to be overcapacity and gains in
productivity inherent in intermodal containerization.
Historically, ocean shipping liner companies attempted to
combat the ocean shipping overcapacity that had developed into
``rate wars'' by establishing shipping conferences to
coordinate their practices and pricing policies. The first
shipping conference was established in 1875, but it was not
until 1916 that the Federal government reviewed the conference
system. The Alexander Committee (named after the then-Chairman
of the House Committee on Merchant Marine and Fisheries)
recommended continuing the conference system in order to avoid
ruinous ``rate wars'' and trade instability, but also
determined that conference practices should be regulated to
ensure that they did not adversely impact shippers. All other
maritime nations allow shipping conferences to exist with
immunity from the application of antitrust or competition laws.
U.S. regulation of the international ocean shipping industry
began with the Shipping Act, 1916 (1916 Act). The 1916 Act
provided conferences with immunity from U.S. antitrust laws,
imposed certain requirements on conferences (such as free entry
and exit of their members, or more commonly known as open
conference requirements), and prohibited discriminatory rates
or services. The 1916 Act also created a separate government
agency, the United States Shipping Board, to enforce the 1916
Act.
In 1961, Congress amended the 1916 Act to address certain
concerns about anticompetitive conduct by ocean carrier
conferences. The 1961 Amendments mandated tariff filing,
introduced a limited form of independent action, and
established an independent agency, the Federal Maritime
Commission (FMC), to regulate ocean shipping practices. Prior
to the creation of the FMC, ocean shipping regulation was
performed by the Federal Maritime Board as part of the
Department of Commerce. The 1961 Amendments authorized the FMC
to apply a public interest standard to the agency's review of
ocean carrier agreements, strengthened the FMC's powers to
investigate and punish ocean carrier transgressions, and
authorized it to disapprove rates that were determined to be
detrimental to the commerce of the United States.
After enactment of the 1961 Amendments, ocean carriers
complained about delays in the FMC agreement approval process.
The 1961 Amendments strengthened the agreement review process
to incorporate public interest standards, and the injection of
antitrust considerations after the Supreme Court decision in
Federal Maritime Commission v. Aktiebolaget Svenska America
Linien, 390 U.S. 238 (1968), severely delayed consideration and
approval of carrier agreements.
The advances in ocean shipping productivity were dramatic
in the 1960's and 1970's, but the general worldwide recession
in the early 1970's tightened the need for shipping services.
Foreign carriers crowded into the U.S. trades where the U.S.
policy requiring conferences to be open guaranteed that they
would be entitled to conference cargoes. Uncertainty as to the
legality of ocean shipping agreements that contained land-side
intermodal agreements, widespread illegal practices brought
about by competitive pressures, and delays in approval for
agreements that increased productivity by allowing and
facilitating intermodal containerization, led to the call for
reform of the 1916 Act.
Congress considered ocean shipping regulation throughout
the 97th and 98th Congress, culminating in the enactment of the
Shipping Act of 1984 (1984 Act). The 1984 Act overhauled the
ocean carrier agreement review process, allowed greater
flexibility in the type of discount-rate and contracts that
could be offered by ocean carriers, recognized the increasing
role of non-vessel-operating common carriers (NVOCCs) and
shippers' associations in facilitating intermodal ocean
transportation, and expanded the right of independent action to
conference tariffs. While the 1984 Act allowed greater
discrimination for service contracts than tariffs, it
essentially preserved common carriage requirements for both
types of transactions, and similarly situated shippers were
afforded identical contract rights.
The 1984 Act also established an Advisory Commission on
Conferences in Ocean Shipping (the Advisory Commission),
effective five and one-half years after the date of enactment,
to study the ocean shipping regulatory system and recommend
changes to that system. The Advisory Commission report,
submitted in April 1992, produced no consensus within either
the Advisory Commission or the industry on recommended changes
to the 1984 Act. The Advisory Commission report, however,
identified several concerns of individual industry segments
with certain aspects of the regulatory system:
Ocean carrier conferences: Many shippers expressed concern
that conferences were able to wield excessive power to prevent
competition under the 1984 Act. This concern was based on the
FMC's limited ability to challenge anticompetitive ocean
carrier agreements under section 6(g) of the 1984 Act, the
increasing market share of conferences in most trade lanes, the
use of trade stabilization agreements between conferences and
non-conference ocean carriers, conference use of public tariff
and service contract information and the independent action 10-
day waiting period to restrict competition among conference
carriers, and the absence of a mandatory right of independent
action by conference carriers for service contracts. Ocean
carriers contended that an unrestricted market wouldresult in a
highly destructive market, and rapidly devolve into a market oligopoly.
Publication of tariff and service contract rates and terms:
Many shippers, especially large volume shippers, expressed
concern that the transparency of the U.S. system disadvantages
U.S. shippers with respect to their foreign competitors in
third markets. In general, foreign nations have not required
transparency of rates or services, and their shippers' rates
are not publicly accessible. Larger shippers also objected to
the requirement that similarly situated shippers be allowed to
access identical service contract rights, contending that it
reduced their ability to negotiate competitive advantages,
while smaller shippers contended that this right helped to
counter competitive advantages. Many shippers also objected to
conference provisions that restricted their rights to negotiate
directly with individual conference carriers.
Shippers' associations, NVOCCs, and freight forwarders: Many
shippers' associations and NVOCCs expressed concerns that
conferences were not negotiating with them in good faith. Many
freight forwarders wanted to increase the mandatory floor for
freight forwarder compensation, which is only applicable to
freight forwarders that are also customs brokers, to include
those forwarders who do not also perform customs brokerage.
These entities generally supported the 1984 Act's transparency
and common carriage requirements, although some NVOCCs
generally wanted relief from tariff filing requirements. Many
NVOCCs also wanted the right to enter into service contracts
with shippers as carriers to help them compete with ocean
carriers. Smaller shippers also expressed concerns that
reductions in contract transparency could facilitate carrier
abuse of collective business authority, and would also ensure
the benefit of larger shippers at the expense of smaller
shippers.
Subsequent to the Advisory Commission report, Committee
hearings and discussions with industry representatives have
produced similar views as expressed in the report. One
significant exception is the recent support of U.S. ocean
carriers for relief from common carriage principles with
respect to service contracts, including confidentiality of
service contract terms. Since the Advisory Commission report,
ocean carrier relationships have become increasingly
diversified. As the need for intermodal shipping services
becomes increasingly global, ocean carriers increasingly rely
on complex partnerships with other ocean carriers to coordinate
assets and services to meet this global requirement. These
ocean carrier partnerships involve smaller carrier groups and
more comprehensive coordination of intermodal and ocean
shipping assets than typical conference activities, which are
focused more on rate stability. Many U.S. ocean carriers
participate in collective shipping arrangements and believe
that these arrangements would produce maximum efficiency if
carriers were allowed to engage in joint contracts for service.
Shipper needs for global shipping alternatives will continue,
and carrier flexibility to engage in tailored carrier-shipper
contracts will increase.
While developing the reported bill, the Committee conducted
two hearings and more than 100 meetings with affected industry
and Federal agency representatives, spent in excess of 300
hours in discussion with these representatives, and developed a
comprehensive understanding of the concerns of all of these
affected parties. Attempts to balance the interests of all
affected parties were difficult given the competing interests.
Additionally, the Committee bill attempted to balance the need
to deregulate the industry with the need to provide oversight
of industry practices, given the immunity from the antitrust
laws. The reported bill attempts to compromise the positions
and interests of those who support complete deregulation of
ocean shipping and those who support the status quo.
Legislative History
On February 2, 1995, the House of Representatives Committee
on Transportation and Infrastructure Subcommittee on Coast
Guard and Maritime Transportation held a hearing on
international ocean shipping. On August 1, 1995, Congressman
Shuster, Chairman of the House Transportation and
Infrastructure Committee introduced H.R. 2149, the Ocean
Shipping Reform Act of 1995, with Congressmen Mineta, Coble,
Traficant, and Oberstar as cosponsors. On August 2, 1995, the
House Transportation and Infrastructure Committee ordered H.R.
2149 reported by voice vote.
On October 23, 1995, Senator Pressler, Chairman of this
Committee, introduced S. 1356, the Ocean Shipping Reform Act of
1995, which was a companion bill to H.R. 2149, as reported. On
November 1, 1995, the Committee held a hearing on S. 1356.
Because of concerns about lack of oversight of carrier
practices immune from the antitrust laws, the Committee worked
to develop a compromise that would ensure a higher degree of
review of carrier-shipper practices. Senator Pressler published
amendments to S. 1356 in the Congressional Record on July 18,
1996 and September 30, 1996 for public comment. The Senate
Commerce Committee took no further action on ocean shipping
regulation in the 104th Congress.
On March 10, 1997, Senator Hutchison, Chairman of the
Committee's Subcommittee on Surface Transportation and Merchant
Marine, introduced S. 414. The bill was cosponsored by Senators
Lott, Breaux, and Gorton. This bill included minor changes to
the amendment to S. 1356 published on September 30, 1996. The
Subcommittee held a hearing on S. 414 on March 20, 1997 (see
Senate document S. Hrg. 105-57 for a record of the hearing). On
May 1, 1997, the Committee considered and adopted an amendment
in the nature of a substitute for S. 414 offered by Senator
Hutchison, cosponsored by Senators Lott, Breaux, and Gorton.
The Committee also adopted an amendment offered by Senator
McCain that would prohibit ocean carriers that had violated
certain U.S. shipping laws within the previous five years from
receiving a shipbuilding loan guarantee under title XI of the
Merchant Marine Act, 1936. The amended bill was ordered
reported by the Committee.
Summary of Major Provisions
As reported, S. 414 would, for ocean liner shipping through
U.S. ports:
1. Provide shippers and common carriers greater
choice and flexibility in entering into contractual
relationships with shippers for ocean transportation
and intermodal services. The most significant
improvement is the right of members of ocean carrier
agreements to negotiate and enter into service
contracts with one or more shippers independent of the
agreement.
2. Reduce the expense of the tariff filing system and
privatize the function of publishing tariff information
while maintaining current tariff enforcement and common
carriage principles with regard to tariff shipments.
3. Protect U.S. exporters from disclosure to their
foreign competitors of their contractual relationships
with common carriers and proprietary business
information, including targeted markets.
4. Specifically exempt new assembled motor vehicles
from tariff and service contract requirements and
provide the FMC with greater flexibility to grant
general exemptions from provisions of the 1984 Act.
5. Reform the licensing and bonding requirements for
ocean freight forwarders and NVOCCs and consolidate the
definitions of those two entities under the term
``ocean transportation intermediary.''
6. Strengthen the provisions of the 1984 Act, the
Foreign Shipping Practices Act of 1988, and section 19
of the Merchant Marine Act, 1920, that prohibit unfair
foreign shipping practices to provide greater
protection from certain discriminatory actions.
7. Provide for an orderly transition to this more
deregulated ocean shipping environment.
8. Transfer the functions of the FMC to the Surface
Transportation Board (STB), rename the STB as the
Intermodal Transportation Board (ITB), and make
appropriate changes in the qualifications of ITB
members.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate prepared by the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 13, 1997.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 414, the Ocean
Shipping Reform Act of 1997.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Deborah
Reis (for the federal costs); Karen McVey (for the state and
local impact); and Lesley Frymier (for the private-sector
impact).
Sincerely,
Paul Van de Water
For June E. O'Neill, (Director).
Enclosure.
congressional budget office cost estimate
S. 414--Ocean Shipping Reform Act of 1997
Summary: S. 414 would amend the Shipping Act of 1984 and
other laws that govern the regulation of ocean shipping by the
Federal Maritime Commission (FMC). The bill would authorize the
appropriation of $15 million for the FMC for fiscal year 1998
while also providing for the subsequent termination of the
agency and transfer of its responsibilities to the Surface
Transportation Board (STB). Finally, the bill would extend
eligibility for certain veterans' death benefits to cover
merchant mariners who served between August 16, 1945, and
December 31, 1946.
Assuming appropriation of the authorized amount, CBO
estimates that the FMC would spend $15 million in 1998 to carry
out routine duties as well as one-time activities to implement
this legislation. Enacting the bill also would increase direct
spending by between $0.2 million and $0.4 million annually.
Finally, enacting S. 414 would increase federal revenues by
about $1 million in 1998 and decrease revenues by roughly the
same amount in each of the following years. Because the bill
would affect direct spending and receipts (revenues), pay-as-
you-go procedures apply.
S. 414 contains several provisions that would either
eliminate existing requirements on the private sector or impose
new private-sector mandates as defined in the Unfunded Mandates
Reform Act of 1995 (UMRA). S. 414 contains no intergovernmental
mandates as defined in UMRA and would have no significant
impact on state, local, or tribal governments.
Estimated cost to the Federal Government: CBO estimates
that enacting S. 414 would increase discretionary spending in
1998 by $1 million over the current year's funding level,
assuming appropriation of the authorized amount. In addition,
the bill would affect both revenues and direct spending each
year. These budgetary effects are summarized in the following
table.
[By fiscal years, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
FMC Spending Under Current Law:
Budget Authority\1\....................... 14 0 0 0 0 0
Estimated Outlays......................... 14 1 0 0 0 0
Proposed Changes:
Authorization Level....................... 0 15 0 0 0 0
Estimated Outlays......................... 0 14 1 0 0 0
FMC Spending Under S. 414:
Authorization Level \1\................... 14 15 0 0 0 0
Estimated Outlays......................... 14 15 1 0 0 0
CHANGES IN DIRECT SPENDING AND REVENUES
Direct Spending:
Estimated Budget Authority................ 0 (\2\) (\2\) (\2\) (\2\) (\2\)
Estimated Outlays......................... 0 (\2\) (\2\) (\2\) (\2\) (\2\)
Revenues:
Estimated Revenues........................ 0 1 -1 -1 -1 -1
----------------------------------------------------------------------------------------------------------------
\1\ The 1997 level is the amount appropriated for that year.
\2\ Less than $500,000.
The costs of this legislation fall within budget function
400 (transportation).
Basis of estimate: For purposes of this estimate, CBO
assumes that S. 414 will be enacted by the end of fiscal year
1997 and that all provisions will become effective at that time
or as stated in the bill.We also assume that the entire amount
authorized will be appropriated by the beginning of fiscal year 1998.
Outlays for discretionary activities are estimated on the basis of
historical spending patterns for the FMC. Estimates of discretionary
costs, changes in federal revenues, and direct spending effects are
based on information provided by the FMC, the U.S. Coast Guard, and the
Office of Management and Budget.
Spending subject to appropriation
S. 414 would authorize the appropriation of $15 million for
the FMC for fiscal year 1998. Assuming appropriation of the
entire amount authorized, CBO estimates that the FMC would
spend most of the increase on one-time activities to implement
Titles I and II of the bill.
Title I would make significant changes in how the FMC
regulates ocean shipping, particularly common carrier rates,
and terms and conditions for services provided under tariff
and/or contract. This title would amend the 1984 act to
eliminate the existing requirement that ocean common carriers
and conferences file their tariffs with the FMC. Common
carriers and conferences (associations of carriers) would still
have to make tariffs available electronically to the public for
reasonable fees (or to federal agencies at no charge), but the
tariffs would not require FMC approval before they become
effective. Common carriers (of any type or combination) would
still have to file all service contracts with the FMC and
publish an abstract of the contract's essential terms, but they
would no longer have to disclose rate information publicly. The
FMC would still have to acquire and review published tariffs
and suspend or prohibit the use of those found to violate
federal shipping laws.
Title I would repeal 46 app. United States Code 1707a,
which requires the FMC to collect and disseminate to the public
all tariffs and other information through an automated tariff
filing and information system (ATFI). The FMC would still be
charged with ensuring the accessibility and accuracy of all
private automated systems used to provide tariff information to
the public. Other provisions of Title I would strengthen
regulations on controlled carriers (which are common carriers
owned or otherwise controlled by foreign governments) and would
change licensing and financial security requirements imposed on
non-vessel-operating common carriers (NVOCCs) to be more
consistent with those on ocean freight forwarders (OFFs).
Title II of the bill would terminate the FMC and transfer
all of the agency's functions and responsibilities to the STB,
which would be renamed the Intermodal Transportation Board
(ITB). These provisions of Title II would be effective on
January 1, 1999.
Of the $15 million authorized, we estimate that the FMC
would incur one-time costs of about $1 million in 1998 to
implement the changes made by Titles I and II. The agency would
use some of this money for rulemaking proceedings. For example,
the agency would have to promulgate regulations to implement
the tariff filing changes made by section 106, including new
guidelines on electronic tariff systems. Also, the termination
of ATFI could result in costs of up to $0.2 million to relocate
computer equipment owned by the FMC but located on a
contractor's premises. Finally, the balance would be spent on
activities associated with the agency's termination and the
transfer of regulatory responsibilities to the ITB. One-time
spending for these purposes would include minor rulemaking
costs and severance payments to former employees. We expect
that any reduction in personnel levels would be small, and that
severance costs would therefore be minimal.
After the two regulatory bodies have merged, ongoing costs
to carry out the new board's responsibilities would be about
the same as those incurred by the FMC and the STB under current
law. In addition to reviewing tariffs for potential violations
of the law, the government would continue to undertake its
other regulatory responsibilities, such as investigating
complaints against carriers and others, overseeing conference
agreements and activities, and taking actions against those who
engage in prohibited acts.
Direct spending
Under Title IV, merchant mariners who served between August
16, 1945, and December 31, 1946, would be eligible for
veterans' burial and funeral benefits. CBO estimates that these
provisions would increase direct spending by $0.2 million in
fiscal year 1998 and by gradually increasing amounts in
subsequent years, up to $0.4 million annually by 2001.
CBO estimates that, to carry out Title IV, the Coast Guard
would incur administrative costs of about $1.5 million in 1998
and $1 million in the following year. The increased spending in
both years would be offset by fee collections provided for in
the bill. Also beginning in 1998, the federal government would
pay about $0.2 million in additional death benefits (including
flags, headstones, burial allowances) to eligible seamen. This
amount would grow to about $0.4 million annually by 2001.
Revenues
Several provisions of S. 414 would affect federal revenues.
The most significant of these are sections 106 and 107, which
would free carriers and conferences from having to file tariffs
with the FMC and would terminate the agency's responsibility to
make tariff information available electronically. As a result
of these provisions, the Treasury would lose nearly all of the
$0.8 million it collects annually from tariff filing fees,
remote access charges, and sales of ATFI tapes. Such losses
would be partially offset by increased collections of license
application fees resulting from section 117, which would
require NVOCCs to obtain licenses as ocean transportation
intermediaries. We estimate that such revenues would be about
$1.4 million in 1998 for initial applications and about $0.2
million annually thereafter for new applications and license
amendments. Finally, the penalty provisions in section 113 also
could result in additional revenues, but these are likely to be
minimal. As shown in the preceding table, the net effect of all
changes in federal revenues would be an increase of about $1
million in 1998 and a loss of a similar amount each year
thereafter.
Pay-as-you-go considerations: Section 252 of the Balanced
Budget and Emergency Deficit Control Act of 1985 sets up pay-
as-you-go procedures for legislation affecting direct spending
or receipts through 1998. CBO estimates that S. 414 would have
no significant effect on direct spending in fiscal year 1998
and would increase receipts in 1998 by about $1 million.
Estimated impact on State, local, and tribal governments:
S. 414 contains no intergovernmental mandates as defined in
UMRA. Title I of the bill would relieve operators of marine
terminals, some of which are state or local governmental
entitles, of two administrative requirements and provide them
new legal protection in certain rate-setting actions. Based on
information from operators of public marine terminals and
ports, CBO estimates that any savings resulting from these
provisions would be negligible.
Enactment of Title IV of the bill could result in
additional costs for some state, local, and tribal governments
to the extent that their retirement systems provide credit for
military service. (For the purposes of certain state retirement
benefits, this title would result in an extra sixteen months of
service credit for merchant mariners because some states credit
such service towards their governmental retirement systems.)
Based on information from stateretirement officials and the
National Association of State Retirement Executives, CBO estimates such
costs would not be significant.
Estimated impact on the private sector: S. 414 would
eliminate existing mandates on common carriers, conferences,
and marine terminal operators and impose new mandates on common
carriers and conferences. Based on information provided by
government and industry sources, CBO estimates that the net
direct costs of these new mandates would not exceed the
statutory threshold established in UMRA ($100 million in 1996,
adjusted annually for inflation) in any year.
Section 104 would require conferences to prohibit
agreements that require members to disclose terms of service
contracts or that restrict member negotiations for service
contracts. CBO believes that these requirements would weaken
conferences' control over service contracts. The magnitude of
the costs to conferences is unclear; however, any costs
associated with these requirements would most likely be offset
by benefits to shippers.
Section 106 would eliminate the existing mandate that
common carriers and conferences file tariffs with the Federal
Maritime Commission and replace it with a requirement that they
make tariffs publicly available, according to regulations that
would be issued by the FMC. Based on information provided by
government and industry sources, CBO estimates that the costs
of the new mandate, in aggregate, would most likely be less
than or equal to the costs of the existing mandate.
Section 117 would replace the license requirement for ocean
freight forwarders (OFFs) with a license requirement for ocean
transportation intermediaries (OTIs), a new category that would
include OFFs and non-vessel operating common carriers. Based on
information provided by government sources, CBO believes that
the 2000 OFFs that are already licensed (including 300 NVOCCs)
would not need to be re-licensed. However, approximately 2000
NVOCCs would have to be licensed. Assuming license fees remain
at the current level, the total cost to NVOCCs would be $1.4
million in fiscal year 1998. CBO also estimates a cost to
NVOCCs of about $200,000 per year in fiscal years 1999-2002 in
fees for new licenses and amendments to existing licenses.
To satisfy license requirements, NVOCCs also would be
required to be bonded at an amount determined by the FMC.
Currently, OFFs are bonded at $30,000, with an additional
$10,000 requirement for every branch office. NVOCCs are bonded
at $50,000. The NVOCC bond requirement would be repealed under
S. 414. CBO has no basis for predicting the amount of the
bonding requirement that would be established for OTIs.
Depending on FMC regulations, bonding requirements could result
in savings or impose greater costs on OFFs and NVOCCs.
Other sections of the bill would eliminate current mandates
for common carriers, conferences, and operators of marine
terminals.
Estimate prepared by: Federal Costs: Deborath Reis. Impact
on State, Local, and Tribal Governments: Karen McVey. Impact on
the Private Sector: Lesley Frymier.
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported.
number of persons covered
This legislation does not significantly change the scope of
entities or actions subject to the 1984 Act. The specific
exclusion from tariff and service contract requirements of new
assembled automobiles should result in a minor reduction in the
number of persons subject to these regulations. The enhancement
of the FMC's general exemption authority may result in further
reductions in the area.
ECONOMIC IMPACT
The amendments to the 1984 Act are intended to increase
competition in ocean shipping, which is not expected to have an
inflationary impact on the Nation's economy.
Title II of the bill authorizes appropriations of $15
million for the FMC for fiscal year 1998. This funding level is
not expected to have an inflationary impact on the Nation's
economy. This title also transfers the functions of the FMC to
the STB, which would be renamed the ITB. This consolidation is
likely to result in minor cost savings to the Federal
Government.
PRIVACY
This legislation will not have any adverse impact on the
personal privacy of the individuals affected.
PAPERWORK
This legislation eliminates the filing of ocean shipping
tariffs with the FMC and encourages the use of privately owned,
publicly accessible, automated systems for the publication of a
reduced volume of information. This legislation creates a new
requirement to license NVOCCs in the United States. This
legislation should result in no net increase in paperwork
requirements.
Section-by-Section Analysis
Section 1.--Short title
This section cites the short title of the bill as the
``Ocean Shipping Reform Act of 1997''.
Section 2.--Effective date
This section provides that the amendments made by S. 414
take effect on March 1, 1998, unless otherwise expressly
provided in S. 414.
TITLE I--AMENDMENTS TO THE SHIPPING ACT OF 1984
This title of the bill contains a number of amendments to
the 1984 Act. Among the provisions considered for amendment was
section 6(g). Although the reported bill does not change its
provisions, a discussion of the Committee's evaluation of
section 6(g) is warranted.
Although the bill retains the broad statutory language of
section 6(g) of the 1984 Act, the Committee believes that the
agency's interpretation and administration of the general
standard must be revised to meet the dramatic changes that have
taken place in the ocean liner shipping industry over the last
decade. In response to those changes, and in keeping with the
expanded policy goals of the bill, the Committee intends that
this report shall guide the agency, and its successor, in the
future exercise of its section 6(g) agreement review authority.
In doing so, the Committee wishes to point out that section
6(g) itself is not changed by the bill. This section continues
the policy of removing any per se condemnation of concerted
action as may be applied under antitrust laws, and there is no
vague public interest standard to be applied to such agreements
as existed before the1984 Act. The 1984 Act continues to place
the burden of proof on the agency. Ocean carrier agreements should be
permitted unless the agency demonstrates that they are likely to
produce unreasonable changes to transportation costs or services
through reductions in competition.
Ocean carriers continue to be free to structure their own
affairs, except when such structure violates specific statutory
provisions or the section 6(g) standard. Ocean carriers should
continue to have the benefit of regulatory certainty and prompt
rulings from the agency. While the agency may continue to weigh
reasonable and commercially proven alternative arrangements
that have less anticompetitive impact, there is no intent to
return to pre-1984 law under which agreement proponents may
have been compelled to show that no less anticompetitive
alternative was available to obtain the benefits of the 1916
Act.
Changes in competitive conditions in the shipping industry.--
Since the passage of the 1984 Act, the FMC has taken a narrow
and restrictive view of its section 6(g) authority, based on
the instructions set forth in the 1984 Act's Conference Report.
In addressing the analytical approach to be taken in applying
the general standard for agreement consideration, much of the
commentary in that report focused on limiting the application
of section 6(g); on granting proposed agreements any benefit of
the doubt; and on establishing a heavy burden of proof with
respect to FMC action. Given the current concerns with
regulatory delay, unclear authority, and excessive government
intervention and regulatory costs, that emphasis was not
without merit. Moreover, at the time the legislation was
introduced, debated, and passed (1978-1984), substantial
independent competition existed in the form of new and
expanding non- conference service. That competition, in
addition to the new right of independent action on conference
rates, appeared to limit the potential market power of liner
conferences.
Today, however, the traditional distinction between
conference and independent lines is eroding. Non-conference
lines regularly cooperate with their conference rivals under
the authority of so-called voluntary discussion agreements.
Activities of those agreements have included capacity
withholding schemes, coordinated general rate increases,
collective action with respect to add-on charges, credit terms,
and an assortment of other price-related tariff and contract
elements. Although the bill includes pro-competitive reforms,
such as prohibiting conferences from restricting a member's
contracting authority or issuing mandatory rules with respect
to contracts, it does not categorically bar carriers from
reducing competition through trade-wide capacity control, rate
discussion agreements, and voluntary cooperation on terms and
procedures of individual contracts. The likelihood that
carriers will continue to pursue such arrangements and other
evolving forms of cooperation creates the need for careful
agency oversight and policing under the general standard.
Furthermore, the recent trend toward greater operational
coordination by means of global strategic alliances, and the
merger-driven carrier consolidations now taking place, strongly
suggest that international liner shipping is becoming a more
concentrated industry. The Committee is concerned that trade-
wide agreements established by the potential oligopoly of mega-
carriers and global strategic alliances, composed of fewer and
more homogeneous members than are today's agreements, may
effectively dominate the major U.S. trade lanes in the near
future. On the other hand, the Committee also recognizes that,
because of ocean carrier alliances, there have actually been an
increase in the number of competitors in some trades (e.g., in
the North Atlantic), and there may have been fewer mergers than
would have been the case in the absence of such alliances.
Since global carriers and carrier alliances likely will have
diversified their assets and operations across a range of
trades, thereby reducing their reliance on revenues from any
single trade, compromise on collective pricing activities could
be easier and the likelihood of substantially anti-competitive
activity could well increase. The agency must be prepared and
able to address and rectify such anti-competitive conditions
before they take their toll on importers, exporters, and U.S.
ocean borne trade.
Administration of section 6(g).--In administering the 1984
Act, as amended by the bill, the agency must balance a number
of important and potentially conflicting policies and
considerations. Foremost of these should be prompt agreement
review, minimal government intervention, and continued
flexibility in structuring agreements. In addition, however,
the agency must remain mindful of many of the broad policies
that underlay the 1984 Act. For example, the 1984 Act's
declaration of policy, as amended by the bill, expresses the
importance of competitive and efficient ocean transportation
and placing a greater reliance on the marketplace. The need, in
light of ongoing changes in the industry, to exercise vigilance
with respect to the potential anti-competitive effects of
industry concentration and possible reductions in independent
competition in U.S. trade lanes also remains an important and
worthwhile goal. In enforcing the 1984 Act, the agency should
also continue to be mindful of the historical and international
acceptance of conferences and carrier cooperation; however,
such factors must be continuously evaluated in the context of
evolving industry structure and commercial practices.
Section 6(g) sets forth a three-part test to be employed by
the agency in assessing agreements. To warrant injunctive
action, the agency must first find, as a threshold matter, that
an agreement is likely to result in a ``reduction in
competition.'' Second, it must show that an agreement, through
this reduction in competition, is likely to produce either a
``reduction in transportation service'' or an ``increase in
transportation cost.'' Third, the agency must determine that
the likely reduction in transportation service or increase in
transportation cost is ``unreasonable.''
As an initial matter, the Committee would point out that the
word ``likely'' in the statute clearly indicates that the
agency is expected to act prospectively to block substantially
anti- competitive carrier plans before they result in adverse
effects on shippers and foreign trade. The section contemplates
the use of reasoned projections and forward-looking analyses by
the agency, based on its substantial industry expertise. It
appears that the FMC thus far has given the section a
restrictive reading, suggesting that an injunction cannot be
won without direct evidence of actual commercial harm suffered
by shippers as a result of agreement activity. While evidence
of shipper harm may indeed be relevant in certain cases, a
blanket requirement for such evidence is not consistent with
the text of the statute, and would undermine the agency's
ability to take necessary preventive action. Indeed, the
Committee directs the agency not to allow the disruption of
ocean borne commerce while it seeks to quantify such disruption
for evidentiary purposes.
In determining whether an agreement is likely to result in a
reduction in competition, the agency must ascertain whether a
collective activity or arrangement set forth in an agreement
would, as a practical matter, reduce the level of competition
(in terms of rates or range of services), either among
agreement members or between agreement members and nonmembers.
Some types of arrangements, such as rate agreements and
capacity withholding, usually result in a reduction in
competition, and in fact have the easing of competitive
pressures as the primary aim. For all types of cooperative or
rationalization arrangements, the agency must closely examine
the agreement authorities and the nature of the parties'
operations to determine whether reduced competition is more
likely than not. It is not the Committee's intention that the
agency expend scarce enforcement resources pursuing
insubstantial or de minimus reductions in competition.
The second part of the test is the showing of a likely
``reduction in transportation service'' or ``increase in
transportation cost.'' Of course, if an agreement is in effect
and had already produced (or is in the process of producing)
such a reduction or increase, evidence of this may be relied
upon by the agency. However, if an agreement is not in effect,
or is likely to have some future impact, agency action is not
foreclosed. Given the agency's resources and expertise, it is
capable of assessing and projecting the likely effects of a
carrier agreement on transportation costs and service, based on
an evaluation of factors such as: the nature of the collective
action contemplated under the agreement; agreement members'
share of the relevant trades; market concentration; rate levels
and rate histories; capacity utilization levels, histories, and
projections; ease of entry or exit; and the existence of other
overlapping agreements.
Market share is relevant and is a factor in considering
whether an agreement is likely to result in a reduction in
transportation service or increase in transportation cost, and
whether those changes are likely to be unreasonable, but it is
only one factor. For example, because S. 414 guarantees a
member of an agreement with pricing authority the right of
independently negotiating and contracting with a shipper, the
aggregated market share of an agreement's members does not by
itself indicate a cohesive or coordinated contracting approach
to the market. On the other hand, in an agreement to
rationalize service and withdraw vessels from service, for
example, the carrier's market share could be a substantial
consideration. The agency may use economically reasonable
projections and forward-looking analysis in determining whether
an agreement is likely to result in a reduction in service or
an increase in cost.
The third prong of the analysis is a determination as to
whether the likely reduction in service or increase in cost is
``unreasonable.'' No further definition of reasonableness is
given in the statute, nor is there case law to serve as a
guide. However, it is apparent fromthe context that the
reasonableness requirement entails a balancing of the scope or
magnitude of the cost increase or service decrease against the likely
benefits to be derived from the carrier agreement. These benefits may
include, for example, carriers' ability to improve efficiency, lower
costs, and increase service options and quality. Other possible
benefits include development of an economically sound and efficient
U.S.-flag fleet, the prevention or forestalling of further competition-
reducing concentration in the industry due to carrier mergers, and the
promotion of comity with our trading partners. Enabling carriers to
remedy identifiable conditions of rate instability or severe
overcapacity may also be a potential agreement benefit, to the extent
that such arrangements are in the long term interests of shippers and
carriers. This is not to say, however, that all collective efforts by
carriers to increase rates or revenues or lower costs are deemed to be
``reasonable'' simply on the grounds that they contribute, in the
general sense, to industry stability.
In general, the reasonableness requirement entails comparing
short term ``apples'' to an array of medium-term and long-term
``oranges.'' The test requires the weighing of a number of
difficult-to-quantify costs and benefits to various segments of
the industry.
In applying the general standard, the agency must consider
whether the relevant competitive market includes more than just
ocean common carriers providing direct service in a trade. The
Committee intends that the agency consider the impact on
shippers of an agreement not only in view of competition
between ocean common carriers providing direct service in a
trade, but also in view of other competitive means of
transport. In some cases, alternative liner routings, bulk
carriers, charter operators, or air freight carriers may
provide competitive alternatives to the direct service provided
by ocean common carriers. In considering these alternatives,
the agency may gather relevant information from shippers, other
carriers and third parties. Although the agency may use its
information powers to request market information from the
proponents of an agreement, such information must be relevant.
Another aspect of the reasonableness requirement is that the
negative impact upon shippers may be offset by the benefits of
an agreement. For example, the competitive harm ensuing from
conferences, already diminished by the statutory limitations on
conference activity, may be offset by the significant benefits
of such activity. Also, the degree to which privately-owned
ocean common carriers that service U.S. foreign commerce are
subjected to competition from state-subsidized and controlled
carriers is another consideration. A conference's ability to
address problems of overcapacity and rate instability is an
important benefit that the agency must weigh.
Another possible benefit to be considered by the agency is
the impact of an agreement on U.S. foreign policy and
international comity. The Committee agrees that the United
States should act with sensitivity to the interests of its
trading partners when administering shipping regulation.
Another important potential benefit to be considered is any
efficiency-creating aspects of an agreement. Agreements
involving significant carrier integration are, if properly
limited to achieve such important benefits, to be favorably
considered by the agency and the courts if these benefits are
not outweighed by any competitive harm that is likely to result
from such integration. Joint ventures and other cooperative
agreements can enable carriers to raise necessary capital,
attain economies of scale, and rationalize their services.
The Committee intends that ocean carriers be free to
structure their own affairs, except when such structuring
violates specific statutory provisions or the general standard.
Even when an agreement raises potential issues under the
general standard, the Committee believes that the procedural
framework gives carriers sufficient flexibility. Carriers are
able to obtain a prompt ruling from the agency under the
provisions for expedited review. If the agency objects to an
agreement under the general standard, the filing party may
withdraw it, modify it, or force the agency to make its showing
in court.
The Committee would also clarify the range of injunctive
remedies available from the district court. The court
evaluating an agreement in a section 6(g) proceeding is not
limited to the simple binary choice of enjoining or not
enjoining an agreement in its entirety. As carrier arrangements
grow increasingly complex and global in scope, a more surgical
approach is warranted. Thus, upon a request by the agency, or
upon its own motion, a court may tailor its injunction to bar
certain agreement authorities or application to particular
geographic ranges, while leaving other parts of the filed
agreement intact.
Finally, the Committee notes that the bill does not adopt the
FMC's suggestion that the 6(g) standard be incorporated into
the prohibited acts section of the 1984 Act so that excessively
anti-competitive agreements could be addressed and acted upon
directly by the agency. The 1984 Act, as amended by the bill,
continues to require the agency to seek to enjoin such
agreements in the federal courts. However, the Committee would
encourage the agency to allow shippers or others to contribute
to the process of determining whether an injunction should be
sought. At present, notices of agreement filings are published
in the Federal Register and comments of interested parties are
solicited. The agency could encourage even more participation
by shippers and others potentially detrimentally affected by
agreement authority by issuing notices of inquiry or conducting
hearings on new agreement filings or existing agreements, the
objective being to more fully apprise the agency of the likely
or actual impact of the agreement prior to its seeking an
injunction. These proceedings, however, should be held promptly
and be of short duration. The Committee is mindful that it may
be infeasible for intra-agency proceedings to occur before the
agency goes to court, particularly in instances where time is
of the essence. But, the Committee does not intend for such
hearings to be protracted. The protracted hearings conducted
under the pre-1984 Act regime are not favored under section
6(g).
Section 101.--Purpose
This section amends section 2 of the 1984 Act to expand the
purpose of the 1984 Act to include the promotion of United
States exports.
Section 102.--Definitions
This section adds, deletes, and amends several definitions
described in section 3 of the 1984 Act. The most important of
these changes are as follows:
Section 3(8) of the 1984 Act is amended to eliminate a
loophole through which government owned or controlled ocean
common carriers avoid controlled carrier restrictions by
registering their vessels in other nations, including nations
operating flag of convenience registries.
Section 3(9) of the 1984 Act is amended to redefine the term
``deferred rebate'' to apply to refunds of freight money tied
to agreements to make further shipments with any common
carrier. Refunds of freight money that are not tied to
agreements to make further shipments must be made in accordance
with the applicable tariff or service contract to avoid a
violation of section 10(b)(2) of the 1984 Act, as amended by
the reported bill.
Section 3(10) of the 1984 Act is deleted. The Committee
considers the term ``fighting ship'' to be obsolete. The
original definition of a ``fighting ship'' envisioned an
individual ship that would follow a competitor's ship and offer
predatory prices to drive the competitor from the trade. In
today's marketplace, such predatory actions, taken with the
intent of driving a carrier from the trade, would be attempted
using multiple ship combinations. The substitute amendment
would prohibit such predatory behavior under section 10(b) of
the prohibited acts.
Section 3(10), as redesignated, of the 1984 Act is amended to
clarify the definition of ``forest products'' and ensure that
it reflects current technology developments that have occurred
since 1984. The 1984 Act specifically states that the list of
products found in section 3(10), as redesignated, is not
exclusive, that forest products not specifically described
therein can qualify for treatment as ``forest products'' under
the 1984 Act. The Committee recognizes that current and
emerging technology allows for the development of new products
which can more efficiently utilize forest resources. The
Committee intends that such new products be included within the
``forest products'' definition. Such products include liquid or
granular by-products derived from pulping and papermaking. Also
included, for example, is a class generally known as
``engineered wood products.'' These are structural or panel
wood products, produced at the mill, glued, or laminated.
Section 3(13), as redesignated, of the 1984 Act is amended to
redefine the term ``loyalty contract'' to eliminate the
application of the term to a contract that commits a fixed
portion of cargo to a common carrier or an agreement among
ocean common carriers, but that does not provide for a deferred
rebate arrangement. Additionally, this change conforms to
common law definitions which have allowed percentage-based
contracts and output requirements contracts absent other
devices that anticompetitively tie shippers and carriers. This
change was made in response to requests by many shippers who
simply are not certain of the volume of cargo they can commit
over a fixed time period due to changing market conditions.
These shippers believe renegotiating contracts shortly before
their expiration date in order to increase the originally
specified volume of cargo to match a greater than anticipated
productionschedule places them at a disadvantage with respect
to the common carrier. The Committee understands that ``portion''
contracts have been viewed as potentially anticompetitive in an ocean
transportation market where shippers were limited to dealing with a
single large conference or a few small independent ocean carriers in
each trade lane who would require shippers to ship all of their cargo
for a given commodity or commodities with that carrier or conference.
Given the changes made by the bill to provide such shippers with a
competitive market for individual common carrier and multiple ocean
common carrier service contracts, the Committee believes allowing
shippers to enter into portion contracts will benefit shippers, not
harm them. The Committee believes that availability of competitive
service contracting options and the prohibition against an unreasonable
refusal to deal or negotiate by one or more common carriers in section
10(b)(10) of 1984 Act, as redesignated, provides sufficient protection
for shippers from unreasonable portion contract requirements by common
carriers.
Section 3(17), as redesignated, of the 1984 Act
consolidates the definitions of ``ocean freight forwarder'' and
``NVOCC'' into a single definition of ``ocean transportation
intermediary.'' Since the bill would consolidate the licensing
and bonding requirements for intermediaries under a single
section, the Committee chose to use a single term throughout
the 1984 Act, as amended by the bill, to cover both types of
functions. The bill, as introduced, consolidated the same two
definitions into the definition of ``ocean freight forwarder.''
The Committee understands that ocean transportation
arrangements are made through a diverse group of
intermediaries. Some fit the description of either an ocean
freight forwarder or an NVOCC; some perform both functions for
different shipments. The Committee also recognizes that some
countries use the term ``freight forwarder'' to include what
the 1984 Act defines as NVOCC functions, while many U.S. NVOCCs
prefer to be identified by that unique U.S. term. The
substitute amendment changed this overarching term from ``ocean
freight forwarder'' to ``ocean transportation intermediary'' in
recognition of the above concerns. The new definition retains
the terms ``ocean freight forwarder'' and ``NVOCC'' for
commercial use by those entities who perform those narrow
functions and prefer to be known by the existing terms for
commercial business reasons, while providing a single, new term
to describe entities who provide the wider variety of services.
Section 3(19), as redesignated, of the 1984 Act redefines
the term ``service contract'' to provide shippers and common
carriers with greater flexibility in entering into contractual
arrangements. First, the new definition allows more than one
shipper collectively to enter into a service contract. The
Committee intends that the Department of Justice ``safe-
harbor'' guidelines should apply to the collective activity of
shippers with respect to a service contract. Second, the new
definition allows NVOCCs to enter into service contracts as
common carriers. Some U.S. ocean common carriers have expressed
concern that this change conflicts with section 2(3) of the
1984 Act, which states that one of the purposes of the 1984 Act
is to encourage the development of an economically sound and
efficient United States-flag liner fleet. The Committee,
however, believes that this change will provide a more
competitive ocean transportation system, and which will
ultimately help smaller shippers who often utilize NVOCCs to
procure shipping services. The Committee also believes that
U.S.-flag carriers provide quality service options, which
should benefit from the increased regulatory flexibility
provided by the bill. Third, the new definition allows
agreements among ocean common carriers, in addition to a
conference, to enter into service contracts. The Committee
believes this change, coupled with the addition of new section
5(b)(9) of the 1984 Act, as amended by the bill, will
substantially increase the competitive options available to
shippers who wish to enter into service contracts with multiple
ocean carriers. Recent shipping trends indicate a move away
from larger carrier conference structure to smaller and more
integrated alliance agreements. Finally, the new definition
allows shippers to commit to provide a certain portion of their
cargo to a common carrier or agreement among ocean common
carriers in a service contract. The rationale for this change
is described in the analysis of section 3(13) above. Also, the
new definition would clarify that a bill of lading or a receipt
for a particular shipment may not be considered a service
contract. The amendments to the 1984 Act made by the bill shall
not affect the provisions of other laws governing the handling
of, and the accessibility of information contained in, bills of
lading, receipts, and similar documentation associated with
shipments of cargo.
Section 3(21), as redesignated, of the 1984 Act would
consolidate in a single location in the 1984 Act the
circumstances in which a person is considered a shipper by the
1984 Act. The revised definition is intended only to clarify
the meaning of the term ``shipper,'' as it is defined in the
1984 Act, and interpreted by the FMC, not to change that
definition.
Section 103.--Agreements within the scope of the act
This section amends section 4 of the 1984 Act in two areas:
First, the bill deletes the reference to NVOCCs in section
4(a)(5) of the 1984 Act. Section 4(a)(5) of the 1984 Act
appears to allow agreements between ocean common carriers and
NVOCCs to be filed in the same manner as ocean carrier
conference agreements and be provided antitrust immunity. This
provision is inconsistent with section 8 of the 1984 Act, which
requires agreements between ocean common carriers and NVOCCs to
be filed as service contracts subject to the antitrust laws.
The FMC has decided that the treatment of these agreements
pursuant to section 8 of the 1984 Act should prevail. The
Committee agrees and eliminates the conflicting provision in
section 4.
Second, the bill amends section 4(b) of the 1984 Act to
assure that there is no gap in the coverage of agreements among
marine terminal operators that operate facilities serving both
the foreign and domestic commerce of the United States. For
example, many marine terminal operators enter into agreements
that discuss, fix, or regulate rates or other conditions of
service that apply at terminals serving carriers that engage in
both foreign and domestic commerce of the United States. The
bill provides that such agreements are not removed from the
scope of the 1984 Act, as amended by the bill, to the extent
they involve ocean transportation in the domestic commerce of
the United States, but rather are fully encompassed within the
1984 Act, as amended by the bill. Also, section 3(14) ofthe
1984 Act, as amended by the bill, is amended by section 102 of the bill
to implement this intent by defining a marine terminal operator for the
purposes of the 1984 Act to include a person that provides wharfage,
dock, warehouse, or other terminal facilities in connection with a
common carrier that operates in the foreign and domestic commerce of
the United States, as well as a carrier that operates in only the
foreign commerce of the United States.
Marine terminal operator agreements within the scope of the
1984 Act, as amended by this section of the bill, and the
activities conducted pursuant to these agreements, like all
other agreements under the Act, are exempt from the antitrust
laws in accordance with section 7 of the 1984 Act.
Section 104.--Agreements
This section amends section 5 of the 1984 Act in three areas:
First, section 5(b)(8) of the 1984 is rewritten to shorten
the notice period for independent action on a conference tariff
from 10 calendar days to five calendar days and to eliminate a
provision which some shippers contend could be interpreted to
prevent independent action on unfiled conference tariffs for
commodities excepted or exempted from tariff filing by section
8(a)(1) or 16 of the 1984 Act. The Committee intends that
conference members have the right of independent action on all
conference tariffs.
Second, a new section 5(b)(9) is added to the 1984 Act to
provide a mandatory right of independent action on service
contracts for members of all ocean common carrier agreements
required to be filed under section 5(a), not only members of
conference agreements. Ocean common carrier agreements would
be: (1) required to allow their members to take independent
action on agreement service contracts; (2) required to allow
their members to negotiate those independent service contracts
without disclosing to the other parties to the agreement the
existence of that negotiation or the terms and conditions of a
resulting service contract, other than those terms required to
be published by new section 8(c)(3) of the 1984 Act, as amended
by the bill; (3) prohibited from issuing mandatory rules or
requirements affecting a member's right to negotiate and enter
into service contracts; and (4) allowed to issue voluntary
guidelines relating to the terms and procedures of agreement
members' service contracts so long as the guidelines do not
require agreement members to comply with the guidelines. The
provisions in new section 5(b)(9) of the 1984 Act, as amended
by the bill, do not extend to the discussion, agreement and
adoption of voluntary guidelines by agreement members
concerning their negotiation and use of individual service
contracts. Thus, nothing in this Act is intended to preclude
agreement members from promulgating voluntary guidelines
relating to the terms and procedures of individual service
contracts, as long as those guidelines make clear that there is
no penalty associated with the failure of a member to follow
any such guideline. Conference members may also similarly adopt
voluntary guidelines for individual tariff matters. The
adoption of voluntary guidelines by an agreement shall not
result in an agreement member or agreement members being
penalized or otherwise disciplined by the agreement for
choosing to deviate from those guidelines. Amending the 1984
Act to provide agreement members with the right to contract
individually is intended to foster intra-agreement competition,
promote efficiencies, modernize ocean shipping arrangements,
and encourage individual shippers and carriers to develop
economic partnerships that better suit their business needs.
The Committee believes that the right of individual and
independent service contracts is the most important change made
by the bill and is intended to develop an efficient and market-
responsive ocean carrier industry.
Finally, a reference to the Intercoastal Shipping Act, 1933,
is deleted. The Intercoastal Shipping Act, 1933, was repealed
by the Interstate Commerce Commission Termination Act of 1995
(Public Law 104-88).
The substitute amendment adopted by the Committee made
several changes to the introduced bill's version of new section
5(b)(9) of the 1984 Act. The introduced bill applied the
provisions of this section to conferences, but not to other
types of ocean common carrier agreements, and limited this
independent action to individual ocean common carrier service
contracts. The introduced bill allowed conferences to require
their members to disclose the existence of these members'
individual service contracts or negotiations on individual
service contracts when the conference entered into negotiations
with the same shipper. The introduced bill also did not require
that conference voluntary guidelines relating to the terms and
procedures of conference members' service contracts be filed
with the FMC. The net effect of the substitute amendment's
changes to new section 5(b)(9) of the 1984 Act is to provide
shippers with more options and a more competitive environment
for negotiating service contracts with one or more ocean common
carriers.
Section 105.--Exemption from antitrust laws
This section would amend section 7 of the 1984 Act to conform
it with other amendments to the 1984 Act made by the bill.
Under the 1984 Act, loyalty contracts, as currently defined,
may be employed if in accordance with the antitrust laws and
the FMC regulates their use. The bill would subject loyalty
contracts, as redefined by the bill, to antitrust oversight by
the Department of Justice. The FMC should provide the
Department of Justice with copies of all loyalty contracts that
are submitted to the FMC pursuant to section 8(a) of the 1984
Act.
Section 106.--Tariffs
This section would amend section 8 of the 1984 Act in several
areas:
First, this section would add ``new, assembled motor
vehicles'' to the list of commodities excepted from tariff and
service contract publication requirements in section 8(a) of
the 1984 Act. Most common carriage of automobiles is conducted
by specialized roll-on, roll-off vessels, usually in very large
quantity, single shipment lots pursuant to a service contract.
This type of service more closely resembles unregulated
contract carriage than common carriage regulated by the 1984
Act. Common carriers employing this method of shipment have in
the past petitioned the FMC to exempt them from the publication
requirements of section 8(c) of the 1984 Act. Common carriage
requirements are intended to protect shipper interests, and to
encourage nondiscriminatory shipping practices. Thenew,
assembled automobile shipper market is very concentrated, it employs
unique shipping practices, and the Committee believes that common
carriage requirements are not necessary for this particular market.
Second, this section would eliminate the requirement in
section 8(a) of the 1984 Act that common carrier tariffs be
filed with the FMC. The FMC, or its successor, retains its
authority pursuant to other sections of the 1984 Act, and other
U.S. shipping laws, to suspend or prohibit the use of tariffs
found to violate the 1984 Act, or other U.S. shipping laws.
Tariffs provide the shipping public with notice as to the price
and service terms of tendered shipping services. The 1984 Act's
requirement that common carrier tariffs be kept open to public
inspection is retained. Instead of using the FMC's Automated
Tariff Filing and Information System (ATFI) for this purpose,
the bill would require that common carriers publish their
tariffs electronically through private systems. Many common
carriers have already developed electronic information
publication systems, such as World Wide Web home pages, that
are more advanced than ATFI and improve these common carriers'
business processes with their customers. The Committee believes
that this innovative private sector approach should be
encouraged and that common carriers should be free to develop
their own means of electronic publication either individually
or collectively, including the use of third party information
providers. This section authorizes the FMC to prescribe
requirements for the accessibility and accuracy of automated
tariff systems and review such systems from time to time for
compliance with the 1984 Act, as amended by the bill. There
should be no government constraints on the design of a private
tariff publication system as long as that system assures the
integrity of the common carrier's tariff and of the tariff
system as a whole, and the system provides the appropriate
level of public access to the common carrier's tariff
information. However, the Committee believes that tariff
information should be simplified and standardized.
Third, this section would make extensive changes to section
8(c) of the 1984 Act concerning service contracts. Consistent
with the bill's amendment to the definition of ``service
contract,'' section 8(c)(1) would be amended to allow all
common carriers, as defined by the 1984 Act, including NVOCCs,
and ocean common carriers operating under all types of
agreements, not only conference agreements, to enter into
service contracts as common carriers with one or more shippers,
including a shippers' association. Consistent with the bill's
amendment to the 1984 Act's tariff publication requirements,
service contracts dealing exclusively with new, assembled motor
vehicles would no longer be filed with the FMC and service
contract terms for new, assembled motor vehicles would not be
required to be published. The FMC shall not accept for filing
any service contract excepted or exempted by section 8(c)(2) or
section 16 of the 1984 Act, as amended by the bill. The bill
would retain the 1984 Act provision providing that the
exclusive remedy for a breach of a service contract is an
appropriate court, not the FMC. Parties to a service contract
may still agree to use a private dispute resolution forum in
lieu of a court, but in no case may the dispute resolution
occur in a forum controlled by, or affiliated with, one of the
parties to the contract. For example, a common carrier that is
owned and controlled by a government would be prohibited from
mandating in its service contracts that contract disputes be
resolved in nationally run arbitration proceedings.
This section would substantially reduce the scope of service
contract essential terms that are required to be made public.
The Committee recognizes that U.S. exporters are engaged in
competition with foreign-based companies who can offer into the
world market similar, if not identical, products. Those
foreign-based companies do not currently publish, or otherwise
disclose specific terms of the ocean shipping contracts they
sign with ocean carriers. Currently, many U.S. exporters are
disadvantaged in the world market because their foreign
competitors are able to ascertain proprietary business
information from their published service contract essential
terms. The Committee seeks to eliminate this competitive
disadvantage for U.S.-based exporters, and seeks to assure that
U.S. exporters continue to produce domestically for world
markets. At the same time, the Committee recognizes that the
publication of certain service contract essential terms
provides U.S. ports, longshore labor, ocean transportation
intermediaries, and others useful information for determining
cargo flows and facilitate strategic planning and marketing
efforts, including the U.S. port range involved in handling
shipments pursuant to a service contract. The Committee seeks
to ensure that the FMC, its successor, and the shipping public
continue to have access to the information necessary to enforce
U.S. shipping laws. Additionally, the Committee recognizes that
in retaining ocean carrier dispensation from the antitrust
laws, while providing ocean carriers with greater discretion in
contracting, this alternative regulatory structure must provide
a mechanism to ensure that shipping malpractices are capable of
being ascertained, and the shipping public may petition a
Federal agency for relief. The bill balances these often
conflicting requirements by requiring the confidential filing
of all service contracts with the FMC, protecting U.S.
exporters' most sensitive service contract information from
public disclosure, and requiring common carriers and agreements
among ocean common carriers to publish certain service contract
information to assist U.S. ports, smaller shippers, shippers'
associations, and ocean transportation intermediaries, and to
ensure that antitrust immunity is not abused.
To achieve this balance, the substitute amendment would
require the publication of only the commodity or commodities,
the volume or portion of the commodity or commodities covered
by the service contract, the duration of the service contract,
and the U.S. port range through which the common carrier
intends to provide the service covered by the contract. This
publication requirement includes U.S. port ranges involved in
the transshipment of cargo from one foreign destination to
another foreign destination, to the extent that these service
contracts are subject to the requirements of the 1984 Act, as
amended by the bill. The bill requires common carriers and
agreements among ocean common carriers to publish this
information for each of their service contracts in tariff
format through the same private electronic system they use to
publish their tariffs.
This section also adds new sections 8(c)(4) and 8(c)(5) of
the 1984 Act, which provide for a new procedure for the
disclosure by the FMC, or its successor, of certain unpublished
service contract essential terms to address certain collective-
bargaining agreement disputes. These provisions do not require
the agency to develop expertise in laws and regulations
concerning collective-bargaining agreements. The Committee
expects the agency to use its best judgment in determining
which common carrier service contract unpublished terms may be
relevant as evidence in a collective bargaining dispute. The
Committee directs the FMC, and its successor, to give petitions
filed in accordance with section 8(c)(4) of the 1984 Act, as
amended by the bill, its highest priority in processing and
determination to facilitate the timely resolution of the
associated collective-bargaining disputes.
This section adds a provision to section 8 of the 1984 Act
which will permit marine terminal operators to establish and
make available to the public, subject to section 10(d) of the
1984 Act, as amended by the bill, a schedule of rates,
regulations, and practices, including limitation of liability
for cargo loss or damage, pertaining to the receiving,
delivering, handling or storing of property on the marine
terminal. The limitations for cargo loss or damage must be
consistent with domestic law and international conventions and
agreements. Such schedules shall be enforceable by an
appropriate court, not by the FMC, as an implied contract,
without proof of actual knowledge of its provisions. If a
marine terminal operator has an actual contract with a person
covering the services rendered, such a schedule would not be
enforceable as an implied contract with respect to that person.
In the past, marine terminal operators established and filed
tariffs with the FMC for their services pursuant to FMC
regulations. This new provision is necessary to ensure that the
operators of essential marine terminal transportation
facilities are promptly and fairly compensated for the services
they provide to waterborne commerce.
This section also would amend section 8 of the 1984 Act to
authorize the FMC to prescribe regulations for the
accessibility and accuracy of automated tariff systems and for
the form and manner of marine terminal operator schedules
authorized by that section. The agency also is authorized to
prohibit the use of any automated tariff publication system it
determines has failed to meet the requirements established
under section 8 of the 1984 Act, as amended by the bill.
Finally, this section would amend section 8 of the 1984 Act
in several places to conform this section with amendments made
to other sections of the 1984 Act by the bill.
The substitute amendment constituted a significant shift in
the bill sponsors' direction on increasing confidentiality for
service contract essential terms. The introduced bill would
have authorized complete confidentiality for service contracts
signed by individual ocean carriers and retained current filing
and publication requirements for service contracts signed by
two or more ocean carriers or an agreement among ocean
carriers.
The Committee found that the industry was divided over the
question of whether current ocean carrier antitrust immunity
should apply to ocean carrier discussions concerning
individualocean carrier service contracts. Ocean carriers and large
volume shippers supported the extension of ocean carrier antitrust
immunity to individual service contracts to enable ocean carrier
agreements, such as the current ``alliances,'' to jointly negotiate
confidential service contracts with shippers. Many shippers'
associations, NVOCCs, and ocean freight forwarders opposed the
application of ocean carrier antitrust immunity to discussions or
negotiations of individual service contracts based on their concern
that this would allow ocean carrier conferences to allocate
confidential contracts among their members and allow conferences to
subject these intermediaries to concerted, unfair discrimination under
the protection of complete contract confidentiality. Also, smaller U.S.
ocean carriers that depended on cooperative ventures with other
conference members to compete with larger ocean carriers stated their
need for individual ocean carrier and multiple ocean carrier service
contracts to be treated the same with respect to confidentiality of
service contract terms. To do otherwise, they argued, would provide an
incentive for smaller carriers to merge with other carriers in order to
remain competitive in the world market. In addition, the committee
questioned whether individual ocean common carrier actions could
legally be segregated from ocean common carrier actions which were
authorized to be considered collectively, which could allow
anticompetitive collective activity to occur under the guise of
confidential individual contracts.
The Committee believed that the original proposal on contract
confidentiality could produce undesirable results. Therefore,
the Committee chose a different approach to address service
contract confidentiality. The substitute amendment replaced the
two-tiered system where individual ocean carrier service
contracts were not filed and completely confidential, and
multiple ocean carrier service contracts were filed and
published, with a single system in which all contracts are
filed, but substantially less service contract information is
published. The substitute amendment attempts to balance
competing considerations by shielding from public scrutiny
certain contract terms that disclose sensitive business
information, while providing the shipping public with certain
terms for the purpose of monitoring shipping practices in order
to petition for relief of unfair or predatory actions.
The substitute amendment also would retain the current
statutory language of section 8(d) of the 1984 Act, which the
bill as introduced would have amended; prohibit the use of a
biased forum for the resolution of service contract disputes,
which was not included in the introduced bill; and clarified
the applicability of section 10 of the 1984 Act to the bill's
new marine terminal operator schedule provision.
Section 107.--Automated tariff filing and information system
This section would repeal the authorization for the FMC's
Automated Tariff Filing and Information System, since the
function of providing tariff information would be delegated to
private entities.
Section 108.--Controlled carriers
This section of the bill would amend section 9 of the 1984
Act in several places to increase the FMC's authority to
prevent and address unjust or unreasonable actions by
controlled carriers. This section would direct the FMC to take
into account whether the constructive costs of a non-controlled
carrier with similar service are met by the controlled
carrier's challenged prices when the FMC is not able to
accurately determine the actual costs of the controlled
carrier; set the time period after the FMC's request for
information in which the agency must make a determination on
the controlled carrier's rates, charges, classifications,
rules, or regulations; reduce the notice period for FMC actions
pursuant to section 9 of the 1984 Act from 60 days to 30 days;
and eliminate three exceptions to this section of the 1984 Act.
Also, this section would conform this section with other
amendments made to the 1984 Act by the bill. The Committee is
concerned about the aggressive growth of certain controlled
carriers, and would hope that new authority under section 9
will allow the FMC, and its successor, to move forward
aggressively to ensure that carriers controlled by foreign
governments not be allowed to utilize the benefits of operating
under the control of, and with the support of, a government to
displace carriers operating under normal commercial
considerations.
Section 109.--Prohibited acts
This section would make several amendments to section 10 of
the 1984 Act:
Amendments to section 10(b) of the 1984 Act--
The prohibited acts described in section 10(b) of the 1984
Act would be substantially revised. Current sections 10(b)(1)
through (3) of the 1984 Act, which are intended to maintain the
integrity of the common carrier tariff and service contract
systems, would be replaced by a single new section 10(b)(2),
which is intended to accomplish the same purpose. Current
sections 10(b)(4) and (5) would be redesignated as sections
10(b)(1) and (3), respectively. Current section 10(b)(6), to be
redesignated as section 10(b)(4), would be amended to clarify
that it applies only to service pursuant to a tariff and
includes charges as well as rates. Current section 10(b)(7) of
the 1984 Act, to be redesignated as section 10(b)(6), would be
amended to replace the reference to ``a fighting ship'' with a
description of the predatory behavior which the Committee
believes should be prohibited by the 1984 Act. The amendment to
section 10(b)(6), as redesignated, was included in the
substitute amendment, but not the bill as introduced.
Current sections 10(b)(9) through (13) of the 1984 Act would
be replaced with new sections 10(b)(5) and (8) through (10).
New section 10(b)(5), combined with section 10(b)(4), as
redesignated, would provide the necessary guidance with respect
to common carrier discriminatory practices pursuant to tariffs
and service contracts in place of current section 10(b)(10).
New sections 10(b)(8) and (9) would provide the necessary
guidance with respect to preference or advantage given, or
prejudice or disadvantage imposed, by a common carrier pursuant
to tariffs and service contracts in place of current sections
10(b)(11) and (12). New section 10(b)(10) would provide the
necessary guidance with respect to a common carrier's refusal
to deal or negotiate in place of current sections 10(b)(12) and
(13). The Committee determined that the current prohibited acts
in section 10(b), which are a combination of prohibited acts
that were either originally enacted by the Shipping Act, 1916,
or added by the 1984 Act, yielded an unclear, and possibly
contradictory, set of guidelines for common carrier actions. In
addition to providing common carriers and shippers greater
flexibility to tailor service contracts to suit different
shippers' requirements without collapsing the service contract
rate structure, the Committee intended to revise section 10(b)
to improve its overall clarity and consistency.
New sections 10(b)(4) and (8) retain the strong common
carriage requirements of the tariff system. Differences in
rates charged pursuant to common carrier tariffs must be fair
and just for all users of the tariff system. Differences in
services provided pursuant to common carrier tariffs must be
reasonable for all users of the tariff system. These
differences should be based on transportation-related factors
in order to be fair and just or reasonable. The Committee
expects the FMC, and its successor, to interpret the standards
included in these new provisions in the same manner as those
standards in the related current provisions of the 1984 Act
have been interpreted.
New sections 10(b)(5) and (9) substantially increase the
discretion given to common carriers to provide different
service contract terms to similarly situated shippers. In
addition to eliminating the current requirement in section 8(c)
of the 1984 Act that ocean common carriers provide the same
service contract terms to similarly situated shippers, the bill
narrows the application of the prohibited acts with respect to
service pursuant to common carrier service contracts. Sections
10(b)(5) and (9) of the 1984 Act, as amended by the bill, would
restrict common carrier service contracting flexibility in only
three, narrow, ways.
First, sections 10(b)(5) and (9) of the 1984 Act, as amended
by the bill, would protect localities from unjust
discrimination and undue or unreasonable preference, advantage,
prejudice, or disadvantage as a result of common carrier
service contracts. The Committee intends the application of
these prohibitions to a locality to be limited to circumstances
in which the prohibited actions are clearly targeted at the
locality, not to circumstances where the actions are targeted
at a particular shipper or ocean transportation intermediary
which happens to be associated with that locality. An example
of this would include a clear pattern of service contracting by
a common carrier that imposes an unreasonable disadvantage on
all shipments from a specific nation or region of a nation,
including the United States. Second, the amendments made by
this section would retain similar protections for ports from
unjust discrimination and undue or unreasonable preference,
advantage, prejudice, or disadvantage as a result of common
carrier service contracts as currently exist under the 1984 Act
through references to ports and localities. Third, the
amendments made by this section would protect shippers and
ocean transportation intermediaries from unjust discrimination
and undue or unreasonable preference, advantage, prejudice, or
disadvantage as a result of common carrier service contracts
due to their status as shippers' associations or ocean
transportation intermediaries.
The Committee intends the application of sections 10(b)(5)
and (9) of the 1984 Act, as amended by the bill, with respect
to protection for shippers' associations and ocean
transportation intermediaries to be limited to circumstances in
which the prohibited actions are clearly targeted at shippers'
associations and ocean transportation intermediaries in
general, not to circumstances where the actions are targeted at
a particular shippers' association or ocean transportation
intermediary. An example of such prohibited activity would
include a clear pattern of unjustly discriminatory practices by
a common carrier with respect to all shippers' association
service contracts. The Committee expects the amendments to the
1984 Act by the bill will result in a much more competitive
environment for ocean transportation rates and services. This
environment should provide shippers' associations and ocean
transportation intermediaries with more options when shopping
for ocean transportation services and free common carriers to
compete with each other to obtain shippers' associations and
ocean transportation intermediaries as customers. Therefore,
the Committee believes that shippers' associations and ocean
transportation intermediaries require less protection as
individuals in this more competitive marketplace. The Committee
intends that common carriers be afforded the maximum
flexibility to differentiate their service contract terms and
conditions with respect to individual shippers and ocean
transportation intermediaries in this more competitive
environment. The Committee directs the FMC, and its successor,
to focus the efforts of its limited enforcement resources, with
respect to common carrier service contracts, on the most
egregious examples of unjust discrimination and undue or
unreasonable preference, advantage, prejudice, or disadvantage
as a result of common carrier service contracting.
This section also would conform section 10(b) of the 1984 Act
with other amendments made by the bill.
The substitute amendment's changes to section 10(b) differ
substantially from those of the introduced bill. The introduced
bill continued the reference to ``fighting ship'' and amended
current sections 10(b)(10) through (13) of the 1984 Act,
redesignating them as new sections 10(b)(7) through (10) to
consistently apply the service contract exception. The
substitute amendment replaced current sections 10(b)(10)
through (13) of the 1984 Act with new sections 10(b)(5) and
10(b)(8) through (10), as described above.
Amendments to section 10(c) of the 1984 Act--
This section would conform section 10(c)(5) of the 1984 Act
with other amendments made by the bill.
Amendments to section 10(d) of the 1984 Act--
This section would amend section 10(d)(3) of the 1984 Act to
revise the application of certain prohibited acts in section
10(b) to marine terminal operators, and add the application of
section 10(b)(13) of the 1984 Act, as amended by the bill, to
ocean freight forwarders. The bill would also conform section
10(d) of the 1984 Act with other amendments made by the bill.
The application of section 10(b)(13) of the 1984 Act, as
amended by the bill, to ocean freight forwarders was included
in the substitute amendment, but not in the introduced bill.
Section 110.--Complaints, investigations, reports, and reparations
This section would conform section 11 of the 1984 Act with
other amendments made by the bill.
Section 111.--Foreign Shipping Practices Act of 1988
This section would amend the Foreign Shipping Practices Act
of 1988 to expand the authority of the FMC, and its successor,
to take actions against foreign carrier service contracts, as
well as tariffs and to conform the Foreign Shipping Practices
Act of 1988 with other amendments made by the bill.
Section 112.--Penalties
This section would amend section 13 of the 1984 Act to
provide the FMC, and its successor, with the authority to
enforce penalties by providing authority to place a maritime
lien on vessels operated by ocean common carriers, authorize an
additional penalty to authorize the refusal or revocation of
clearances to conduct business in U.S. ports, and conform
section 13 with other amendments made by the bill. Some ocean
common carriers have expressed concern that the authority
provided to the FMC, and its successor, to authorize the
refusal or revocation of clearances to conduct business in U.S.
ports in response to an ocean common carrier's refusal to
produce information required by a subpoena would deprive that
carrier of the right to contest such a subpoena in court. The
Committee notes that an ocean common carrier also has the right
to contest the imposition of this new penalty in court in such
a situation.
Section 113.--Reports and certificates
This section would amend section 15 of the 1984 Act to
eliminate a requirement that the chief executive officer of
each common carrier and other transportation companies provide
periodic written certifications to the FMC as to the company's
policy prohibiting the payment or receipt of unlawful rebates.
The elimination of this provision is intended to remove an
unnecessary paperwork burden from the ocean transportation
industry, and should not be interpreted as relaxing the 1984
Act's prohibition against deferred rebates.
Section 114.--Exemptions
This section would amend section 16 of the 1984 Act to
facilitate the exemption of classes of agreements between
persons subject to the 1984 Act or any specified activities of
those persons from any requirements of the 1984 Act by
eliminating two of the four tests applied to applications for
such exemptions. The policy underlying this change is that
while Congress has been able to identify broad areas of ocean
shipping commerce for which reduced regulation is clearly
warranted, the FMC is more capable of examining through the
administrative process specific regulatory provisions and
practices not yet addressed by Congress to determine where they
can be deregulated consistent with the policies of Congress.
Section 115.--Agency Reports and Advisory Commission
This section would repeal section 18 of the 1984 Act. Section
18 authorized the establishment of an Advisory Commission in
order to review the operation of the 1984 Act. The activities
required or authorized by this section of the 1984 Act were
completed several years ago.
Section 116.--Ocean freight forwarders
This section would amend section 19 of the 1984 Act in
several areas:
First, this section would apply the provisions of section 19
of the 1984 Act to all ocean transportation intermediaries,
including NVOCCs, not only to ocean freight forwarders. Under
the 1984 Act, NVOCCs are required to maintain a bond, proof of
insurance, or other surety, but are not required to be
licensed. This section would now require certain NVOCCs to be
licensed.
Second, this section would apply the licensing requirements
only to persons in the United States. The Committee directs the
FMC to determine when foreign-based entities conducting
business in the United States are to be considered persons in
the United States for the purposes of this section.
Third, this section would require the bonding of all ocean
transportation intermediaries as a means of insuring their
financial responsibility and add an alternative process for
resolving claims against such a bond. In determining the amount
of the bond, the Committee directs the FMC to consider that the
licensing requirements in subsection (a) on the fitness of the
ocean transportation intermediary do not apply to certain
foreign-based entities providing ocean transportation
intermediary services in the United States, and to consider the
difference in potential for claims against the bond between
licensed and unlicensed intermediaries when developing bond
requirements. The 1984 Act prescribes that a person pursuing a
claim against an NVOCC bond must obtain a court judgment to
collect on that claim. While the bill would provide for a
similar process for claims against ocean transportation
intermediary bonds, it would also allow the surety company to
settle the claim with the consent of the insured ocean
transportation intermediary or after the ocean transportation
intermediary has failed to respond to adequate notice to
address the validity of the claim. The Committee directs the
FMC to establish the minimum time period which may be
considered adequate notice for this purpose.
Damages which would be covered by the bond would include
those suffered by ocean common carriers, shippers and others
arising from any activities authorized or required by the 1984
Act, as amended by the bill, or referred to in the definition
of ``ocean transportation intermediary'' in section 3(17) of
the 1984 Act, as amended by the bill. This would include the
activities of ocean freight forwarders as defined in section
3(17)(A), and the activities of NVOCCs as defined in section
3(17)(B), including liabilities related to service contract
obligations. The bonds would cover judgments and valid claims
resulting directly or indirectly from, for example, the loss or
conversion of cargo by the bonded entity or from the negligence
or complicity of the bonded entity, as well as from
nonperformance of services. Once a judgment is entered against
a bonded ocean transportation intermediary, the surety company
would be expected to pay the judgment from the bond funds,
without requiring further evidence of bills of lading or other
documentation going to the validity, rather than the subject
matter, of the claim. The Committee directs the FMC to
prescribe regulations defining transportation-related
activities of ocean transportationintermediaries which are
subject to the financial responsibility requirements of section
19(b)(1) of the 1984 Act, as amended by the bill.
Due to the diversity of activities conducted by different
ocean transportation intermediaries, the Committee directs the
FMC to establish a range of licensing and financial
responsibility requirements commensurate with the scope of
activities conducted by different ocean transportation
intermediaries, and the past fitness of the ocean
transportation intermediary in the performance of intermediary
services.
Fourth, this section would include in the 1984 Act a
provision providing for reasonable ocean freight forwarder
compensation by groups of ocean common carriers that is
currently included in section 641(I) the Tariff Act of 1930.
This section of the bill would remove the requirement in
current law that the freight forwarder (section 3(17)(A) ocean
transportation intermediary) also be a customs broker.
Finally, this section would conform section 19 of the 1984
Act with other amendments made by the bill. The substitute
amendment changed the process included in the introduced bill
for payment of a claim against an ocean transportation
intermediary's bond.
Section 117.--Contracts, agreements, and licenses under prior shipping
legislation
This section would amend section 20 of the 1984 Act which
includes savings provisions for certain agreements and
contracts in effect, suits filed, and regulations issued by the
FMC prior to the effective date of the amendments to the 1984
Act made by the bill.
Section 118.--Surety for non-vessel-operating common carriers
This section would repeal section 23 of the 1984 Act.
Provisions requiring a bond, proof of insurance, or other
surety from NVOCCs have been included in section 19 of the 1984
Act, as amended by the bill.
Section 119.--Replacement of Federal Maritime Commission with
Intermodal Transportation Board
This section would amend the 1984 Act to conform with the
transfer of functions of the FMC to the ITB, effective January
1, 1999.
TITLE II--TRANSFER OF FUNCTIONS OF THE FEDERAL MARITIME COMMISSION TO
THE INTERMODAL TRANSPORTATION BOARD
This title would rename the Surface Transportation Board as
the Intermodal Transportation Board, transfer the functions of
the FMC to the ITB, adjust the membership of the ITB to reflect
the added maritime regulation responsibilities, and terminate
the FMC on January 1, 1999. Because this title would transfer
responsibility for administering the provisions of the 1984
Act, as amended by the bill, to the ITB after those amendments
are effective, this title requires the FMC to consult with the
STB during the development of the regulations implementing the
amendments made by the bill. In amending the qualification
requirements for ITB members, this title would prevent
domination within the Board of a particular transportation mode
(surface or maritime), sector (private or public), or political
party by requiring the Board membership to be balanced in these
three characteristics. This title also would authorize FMC
appropriations in the amount of $15 million for fiscal year
1998. STB appropriations are currently authorized through
fiscal year 1998. The bill does not authorize appropriations
for the FMC, STB, or ITB for fiscal year 1999. The Committee
expects to address fiscal year 1999 authorizations for these
agencies at a later date.
TITLE III--AMENDMENTS TO OTHER SHIPPING AND MARITIME LAWS
Section 301.--Amendments to section 19 of the Merchant Marine Act, 1920
This section would amend section 19 of the Merchant Marine
Act, 1920, to clarify that conditions unfavorable to shipping
in the foreign trade include pricing practices employed by
owners, operators, agents, or masters of vessels of a foreign
country. The FMC has held that the term ``practices employed by
owners, operators, agents, or masters of vessels of a foreign
country'' in section 19 of the Merchant Marine Act, 1920,
includes pricing practices. The Committee agrees, and would
amend section 19 to clarify that such pricing practices are
within the scope of that section. Section 301 of the bill would
also clarify that service contracts of a common carrier are
subject to actions by the agency under section 19 of the
Merchant Marine Act, 1920, and conform section 19 with
amendments made to the 1984 Act by the bill.
Section 302.--Technical corrections
This section would make technical corrections in several laws
to conform with amendments made by the bill.
TITLE IV--MERCHANT MARINER BENEFITS
Section 401.--Merchant mariner benefits
This section would extend eligibility for veterans' burial
benefits, funeral benefits, and related benefits for veterans
of service in the United States Merchant Marine in support of
U.S. Armed Forces from August 16, 1945 to December 31, 1946.
Currently, the dates provided for veterans' benefits to U.S.
merchant mariners for World War II service are December 7, 1941
to August 16, 1945.
The efforts of American merchant mariners to secure veterans'
benefits pursuant to Public Law 95-202, have been long, and
only partially successful, despite merit and clear eligibility
under the statute. The casualty rate for the U.S. Merchant
Marine during World War II was higher than the casualty rate
for the U.S. Army, U.S. Navy, or U.S. Coast Guard, and only
second to the U.S. Marine Corps. In all, 5662 merchant mariners
lost their lives or were declared missing in action. Another
609 merchant mariners became prisoners of war and thousands
were wounded. The Director of the Selective Service System at
the time, General Lewis B. Hershey, wrote to local draft
boards:
Service in the merchant marine * * * is so closely
allied to service in the armed forces that men found by
the local board to be actively engaged at sea may be
considered engaged in thedefense of the country. Such
service may be considered as tantamount to military service.
Yet, in 1980, when a group of merchant mariners filed an
application for veterans' status pursuant to Public Law 95-202,
it was denied by the Secretary of the Air Force, to whom such
authority was delegated. The applicants sought judicial review
of this adverse determination, and the Federal District Court
held in 1987 that the Secretary abused his discretion under the
statute in denying the application. As a consequence of the
Court's decision, the Secretary reconsidered his denial and
granted veterans' status to merchant mariners who served
through V-J day, August 15, 1945, even though hostilities were
not declared ended by President Truman until December 31, 1946
(the date that was applied to veterans' status for all branches
of the U.S. Armed Forces). In addition, another group similarly
situated to U.S. merchant mariners, the Guam Combat Patrol, was
given veterans' status without a cutoff date (effectively
through December 31, 1946) by the Secretary.
Numerous applications to the Secretary on behalf of remaining
merchant mariners to extend the cutoff date to December 31,
1946, have been denied--despite the fact that between August
16, 1945 and December 31, 1946, ten U.S. Merchant Marine
vessels operating in support of U.S. Armed Forces were damaged
or lost and merchant marine casualties were sustained as a
result of enemy instruments of war. The Committee agrees with
the District Court that Public Law 95-202 gives the Secretary
broad discretion to extend the cutoff date and rectify a
blatant inequity. Frustrated by the failure of the Secretary to
do so for nearly a decade, the Committee reluctantly concludes
that a legislative solution is the only alternative.
TITLE V--CERTAIN LOAN GUARANTEES AND COMMITMENTS
Section 501.--Certain loan guarantees and commitments
This section would prohibit the Secretary of Transportation
from issuing a guarantee or commitment to guarantee a loan for
the construction, reconstruction, or reconditioning of a vessel
under the authority of title XI of the Merchant Marine Act,
1936, until the FMC certifies that the operator of that vessel
has not violated certain U.S. shipping laws within the previous
five years and is not under formal investigation by the FMC for
a violation of those shipping laws. This provision would apply
to the operator of the vessel to be constructed, reconstructed,
or reconditioned with the assistance of the title XI program,
but not to any other affiliated vessel operators. This
provision would apply to guarantees and commitments to
guarantee made by the Secretary of Transportation after the
date of enactment of the bill. This provision was included in
an amendment by Senator McCain that was adopted by the
Committee, and was not included in the introduced bill.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new material is printed
in italic, existing law in which no change is proposed is shown
in roman) \1\:
---------------------------------------------------------------------------
\1\ In compliance with the last sentence of such paragraph, it is
the opinion of the Committee that it is necessary to dispense with the
requirements of this paragraph, as they apply to mere changes in
references to the Surface Transportation Board in statutes not
otherwise amended, in order to expedite the business of the Senate.
---------------------------------------------------------------------------
Section 641, Tariff Act of 1930
[19 U.S.C. 1641]
Sec. 1641. Customs brokers
(a) Definitions.-- As used in this section:
(1) The term ``customs broker'' means any person
granted a customs broker's license by the Secretary
under subsection (b).
(2) The term ``customs business'' means those
activities involving transactions with the Customs
Service concerning the entry and admissibility of
merchandise, its classification and valuation, the
payment of duties, taxes, or other charges, assessed or
collected by the Customs Service upon merchandise by
reason of its importation, or the refund, rebate, or
drawback thereof. It also includes the preparation of
documents or forms in any format and the electronic
transmission of documents, invoices, bills, or parts
thereof, intended to be filed with the Customs Service
in furtherance of such activities, whether or not
signed or filed by the preparer, or activities relating
to such preparation, but does not include the mere
electronic transmission of data received for
transmission to Customs.
(3) The term ``Secretary'' means the Secretary of the
Treasury.
(b) Custom Broker's Licenses.--
(1) In general.--No person may conduct customs
business (other than solely on behalf of that person)
unless that person holds a valid customs broker's
license issued by the Secretary under paragraph (2) or
(3).
(2) Licenses for individuals.--The Secretary may
grant an individual a customs broker's license only if
that individual is a citizen of the United States.
Before granting the license, the Secretary may require
an applicant to show any facts deemed necessary to
establish that the applicant is of good moral character
and qualified to render valuable service to others in
the conduct of customs business. In assessing the
qualifications of an applicant, the Secretary may
conduct an examination to determine the applicant's
knowledge of customs and related laws, regulations and
procedures, bookkeeping, accounting, and all others
appropriate matters.
(3) Licenses for corporations, etc.--The Secretary
may grant a customs broker's license to any
corporation, association, or partnership that is
organized or existing under the laws of any of the
several States of the United States if at least one
officer of the corporation or association, or one
member of the partnership, holds a valid customs
broker's license granted under paragraph (2).
(4) Duties.--A customs broker shall exercise
responsible supervision and control over the customs
business that it conducts.
(5) Lapse of license.--The failure of a customs
broker that is licensed as a corporation, association,
or partnership under paragraph (3) to have, for any
continuous period of 120 days, at least one officer of
the corporation or association, or at least one member
of the partnership, validly licensed under paragraph
(2) shall, in addition to causing the broker to be
subject to any other sanction under this section
(including paragraph (6)) result in the revocation by
operation of law of its license.
(6) Prohibited acts.--Any person who intentionally
transacts customs business, other than solely on the
behalf of that person, without holding a valid customs
broker's license granted to that person under this
subsection shall be liable to the United States for a
monetary penalty not to exceed $10,000 for each such
transaction as well as for each violation of any other
provision of this section. This penalty shall be
assessed in the same manner and under the same
procedures as the monetary penalties provided for in
subsection (d)(2)(A).
(c) Customs Broker's Permits.--
(1) In general.--Each person granted a customs
broker's license under subsection (b) shall be issued,
in accordance with such regulations as the Secretary
shall prescribe, either or both of the following:
(A) A national permit for the conduct of such
customs business as the Secretary prescribes by
regulation.
(B) A permit for each customs district in
which that person conducts customs business
and, except as provided in paragraph (2),
regularly employs at least 1 individual who is
licensed under subsection (b)(2) to exercise
responsible supervision and control over the
customs business conducted by that person in
that district.
(2) Exception.--If a person granted a customs
broker's license under subsection (b) can demonstrate
to the satisfaction of the Secretary that--
(A) he regularly employs in the region in
which that district is located at least one
individual who is licensed under subsection
(b)(2), and
(B) that sufficient procedures exist within
the company for the person employed in that
region to exercise responsible supervision and
control over the customs business conducted by
that person in that district,
the Secretary may waive the requirement in paragraph
(1)(B).
(3) Lapse of permit.--The failure of a customs broker
granted a permit under paragraph (1) to employ, for any
continuous period of 180 days, at least one individual
who is licensed under subsection (b)(2) within the
district or region (if paragraph (2) applies) for which
a permit was issued shall, in addition to causing the
broker to be subject to any other sanction under this
section (including any in subsection (d)), result in
the revocation by operation of law of the permit.
(4) Appointment of subagents.--Notwithstanding
subsection (c)(1), upon the implementation by the
Secretary under section 413(b)(2) [19 U.S.C.
1413(b)(2)] of the component of the National Customs
Automation Program referred to in section
411(a)(2)(B)[19 U.S.C. 1411(a)(2)(B)], a licensed
broker may appoint another licensed broker holding a
permit in a customs district to act on its behalf as
its subagent in that district if such activity relates
to the filing of information that is permitted by law
or regulation to be filed electronically. A licensed
broker appointing a subagent pursuant to this paragraph
shall remain liable for any and all obligations arising
under bond and any and all duties, taxes, and fees, as
well as any other liabilities imposed by law, and shall
be precluded from delegating to a subagent such
liability.
(d) Disciplinary Proceedings.--
(1) General rule.--The Secretary may impose a
monetary penalty in all cases with the exception of the
infractions described in clause (iii) of subparagraph
(B) of this subsection, or revoke or suspend a license
or permit of any customs broker, if it is shown that
the broker--
(A) has made or caused to be made in any
application for any license or permit under
this section, or report filed with the Customs
Service, any statement which was, at the time
and in light of the circumstances under which
it was made, false or misleading with respect
to any material fact, or has omitted to state
in any such application or report any material
fact which was required to be stated therein;
(B) has been convicted at any time after the
filing of an application for license under
subsection (b) of any felony or misdemeanor
which the Secretary finds--
(i) involved the importation or
exportation of merchandise;
(ii) arose out of the conduct of its
customs business; or
(iii) involved larceny, theft,
robbery, extortion, forgery,
counterfeiting, fraudulent concealment,
embezzlement, fraudulent conversion, or
misappropriation of funds;
(C) has violated any provision of any law
enforced by the Customs Service or the rules or
regulations issued under any such provision;
(D) has counseled, commanded, induced,
procured, or knowingly aided or abetted the
violations by any other person of any provision
of any law enforced by the Customs Service, or
the rules or regulations issued under any such
provision;
(E) has knowingly employed, or continues to
employ, any person who has been convicted of a
felony, without written approval of such
employment from the Secretary; or
(F) has, in the course of its customs
business, with intent to defraud, in any manner
willfully and knowingly deceived, misled or
threatened any client or prospective client.
(2) Procedures.--
(A) Monetary penalty.--Unless action has been
taken under subparagraph (B), the appropriate
customs officer shall serve notice in writing
upon any customs broker to show cause why the
broker should not be subject to a monetary
penalty not to exceed $30,000 in total for a
violation or violations of this section. The
notice shall advise the customs broker of the
allegations or complaints against him and shall
explain that the broker has a right to respond
to the allegations or complaints in writing
within 30 days of the date of the notice.
Before imposing a monetary penalty, the customs
officer shall consider the allegations or
complaints and any timely response made by the
customs broker and issue a written decision. A
customs broker against whom a monetary penalty
has been issued under this section shall have a
reasonable opportunity under section 618 [19
U.S.C. 1618] to make representations seeking
remission or mitigation of the monetary
penalty. Following the conclusion of any
proceeding under section 618 [19 U.S.C. 1618],
the appropriate customs officer shall provide
to the customs broker a written statement which
sets forth the final determination and the
findings of fact and conclusions of law on
which such determination is based.
(B) Revocation or suspension.--The Customs
Service may, for good and sufficient reason,
serve notice in writing upon any customs broker
to show cause why a license or permit issued
under this section should not be revoked or
suspended. The notice shall be in the form of a
statement specifically setting forth the
grounds of the complaint, and shall allow the
customs broker 30 days to respond. If no
response is filed, or the Customs Service
determines that the revocation or suspension is
still warranted, it shall notify the customs
broker in writing of a hearing to be held
within 30 days, or at a later date if the
broker requests an extension and shows good
cause therefor, before an administrative law
judge appointed pursuant to section 3105 of
title 5, United States Code, who shall serve as
the hearing officer. If the customs broker
waives the hearing, or the broker or his
designated representative fails to appear at
the appointed time and place, the hearing
officer shall make findings and recommendations
based on the record submitted by the parties.
At the hearing, the customs broker may be
represented by counsel, and all proceedings,
including the proof of the charges and the
response thereto shall be presented with
testimony taken under oath and the right of
cross-examination accorded to both parties. A
transcript of the hearing shall be made and a
copy will be provided to the Customs Service
and the customs broker; which shall thereafter
be provided reasonable opportunity to file a
post-hearing brief. Following the conclusion of
the hearing, the hearing officer shall transmit
promptly the record of the hearing along with
the findings of fact and recommendations to the
Secretary for decision. The Secretary will
issue a written decision, based solely on the
record, setting forth the findings of fact and
the reasons for the decision. Such decision may
provide for the sanction contained in the
notice to show cause or any lesser sanction
authorized by this subsection, including a
monetary penalty not to exceed $30,000, than
was contained in the notice to show cause.
(3) Settlement and compromise.--The Secretary may
settle and compromise any disciplinary proceeding which
has been instituted under this subsection according to
the terms and conditions agreed to by the parties,
including but not limited to the reduction of any
proposed suspension or revocation to a monetary
penalty.
(4) Limitation of actions.--Notwithstanding section
621 [19 U.S.C. 1621], no proceeding under this
subsection or subsection (b) (6) shall be commenced
unless such proceeding is instituted by the appropriate
service of written notice within 5 years from the date
the alleged violation was committed; except that if the
alleged violation consists of fraud, the 5-year period
of limitation shall commence running from the time such
alleged violation was discovered.
(e) Judicial Appeal.--
(1) In general.--A customs broker, applicant, or
other person directly affected may appeal any decision
of the Secretary denying or revoking a license or
permit under subsection (b) or (c), or revoking or
suspending a license or permit or imposing a monetary
penalty in lieu thereof under subsection (d)(2)(B), by
filing in the Court of International Trade, within 60
days after the issuance of the decision or order, a
written petition requesting that the decision or order
be modified or set aside in whole or in part. A copy of
the petition shall be transmitted promptly by the clerk
of the court to the Secretary or his designee. In cases
involving revocation or suspension of a license or
permit or imposition of a monetary penalty in lieu
thereof under subsection (d)(2)(B), after receipt of
the petition, the Secretary shall file in court the
record upon which the decision or order complained of
was entered, as provided in section 2635(d) of title
28, United States Code.
(2) Consideration of objections.--The court shall not
consider any objection to the decision or order of the
Secretary, or to the introduction of evidence or
testimony, unless that objection was raised before the
hearing officer in suspension or revocation proceedings
unless there were reasonable grounds for failure to do
so.
(3) Conclusiveness of findings.--The findings of the
Secretary as to the facts, if supported by substantial
evidence, shall be conclusive.
(4) Additional evidence.--If any party applies to the
court for leave to present additional evidence and the
court is satisfied that the additional evidence is
material and that reasonable grounds existed for the
failure to present the evidence in the proceedings
before the hearing officer, the court may order the
additional evidence to be taken before the hearing
officer and to be presented in a manner and upon the
terms and conditions prescribed by the court. The
Secretary may modify the findings of facts on the basis
of the additional evidence presented. The Secretary
shall then file with the court any new or modified
findings of fact which shall be conclusive of supported
by substantial evidence, together with a
recommendation, if any, for the modification or setting
aside of the original decision or order.
(5) Effect of proceedings.--The commencement of
proceedings under this subsection shall, unless
specifically ordered by the court, operate as a stay of
the decision of the Secretary except in the case of a
denial of a license or permit.
(6) Failure to appeal.--If an appeal is not filed
within the time limits specified in this section, the
decision by the Secretary shall be final and
conclusive. In the case of a monetary penalty imposed
under subsection (d)(2)(B) of this section, if the
amount is not tendered within 60 days after the
decision becomes final, the license shall automatically
be suspended until payment is made to the Customs
Service.
(f) Regulations by the Secretary.--The Secretary may
prescribe such rules and regulations relating to the customs
business of customs brokers as the Secretary considers
necessary to protect importers and the revenue of the United
States, and to carry out the provisions of this section,
including rules and regulations governing the licensing of or
issuance of permits to customs brokers, the keeping of books,
accounts, and records by customs brokers, and documents and
correspondence, and the furnishing by customs brokers of any
other information relating to their customs business to and
duly accredited officer or employee of the Customs Service. The
Secretary may not prohibit customs brokers from limiting their
liability to other persons in the conduct of customs business.
For purposes of this subsection or any other provision of this
Act pertaining to recordkeeping, all data required to be
retained by a customs broker may be kept on microfilm, optical
disc, magnetic tapes, disks or drums, video files or any other
electrically generated medium. Pursuant to such regulations as
the Secretary shall prescribe, the conversion of data to such
storage medium may be accomplished at any time subsequent to
the relevant customs transaction and the data may be retained
in a centralized basis according to such broker's business
system.
(g) Triennial Reports by Customs Brokers.--
(1) In general.--On February 1, 1985, and on February
1 of each third year thereafter, each person who is
licensed under subsection (b) shall file with the
Secretary of the Treasury a report as to--
(A) whether such person is actively engaged
in business as a customs broker; and
(B) the name under, and the address at, which
such business is being transacted.
(2) Suspension and revocation.--If a person licensed
under subsection (b) fails to file the required report
by March 1 of the reporting year, the license is
suspended, and may be thereafter revoked subject to the
following procedures:
(A) The Secretary shall transmit written
notice of suspension to the licensee no later
than March 31 of the reporting year.
(B) If the licensee files the required report
within 60 days of receipt of the Secretary's
notice, the license shall be reinstated.
(C) In the event the required report is not
filed within the 60-day period, the license
shall be revoked without prejudice to the
filing of an application for a new license.
(h) Fees and Charges.--The Secretary may prescribe reasonable
fees and charges to defray the costs of the Customs Service in
carrying out the provisions of this section, including, but not
limited to, a fee for licenses issued under subsection (b) and
fees for any test administered by him or under his direction;
except that no separate fees shall be imposed to defray the
costs of an individual audit or of individual disciplinary
proceedings of any nature.
[(i) Compensation of Ocean Freight Forwarders.--
[(1) In general.--Notwithstanding any other provision
of law, no conference or group of two or more ocean
common carriers in the foreign commerce of the United
States that is authorized to agree upon the level of
compensation paid to ocean freight forwarders may--
[(A) deny to any member of such conference or
group the right, upon notice of not more than
10 calendar days, to take independent action on
any level of compensation paid to an ocean
freight forwarder who is also a customs broker,
and
[(B) agree to limit the payment of
compensation to an ocean freight forwarder who
is also a customs broker to less than 1.25
percent of the aggregate of all rates and
charges applicable under the tariff assessed
against the cargo on which the forwarding
services are provided.
[(2) Administration.--The provisions of this subsection shall
be enforced by the agency responsible for administration of the
Shipping Act of 1984 (46 U.S.C. 1701, et seq.).
[(3) Remedies.--Any person injured by reason of a violation
of paragraph (1) may, in addition to any other remedy, file a
complaint for reparation as provided in section 11 of the
Shipping Act of 1984 (46 U.S.C. 1710), which may be enforced
pursuant to section 14 of such Act (46 U.S.C. 1713).
[(4) Definitions.--For purposes of this subsection, the terms
``conference'', ``ocean common carrier'', and ``ocean freight
forwarder'' have the respective meaning given to such terms by
section 3 of the Shipping Act of 1984 (46 U.S.C. 1702).]
TITLE 28. JUDICIARY AND JUDICIAL PROCEDURE
PART VI. PARTICULAR PROCEEDINGS
CHAPTER 158. ORDERS OF FEDERAL AGENCIES; REVIEW
Sec. 2341. Definitions
As used in this chapter--
(1) ``clerk'' means the clerk of the court in which
the petition for the review of an order, reviewable
under this chapter, is filed;
(2) ``petitioner'' means the party or parties by whom
a petition to review an order, reviewable under this
chapter, is filed; and
(3) ``agency'' means--
(A) the Commission, when the order sought to be
reviewed was entered by the Federal
Communications Commission, [the Federal
Maritime Commission,] or the Atomic Energy
Commission, as the case may be;
(B) the Secretary, when the order was entered
by the Secretary of Agriculture or the
Secretary of Transportation;
(C) the Administration, when the order was
entered by the Maritime Administration;
(D) the Secretary, when the order is under
section 812 of the Fair Housing Act [42 U.S.C.
3612]; and
(E) the Board, when the order was entered by
the [Surface] Intermodal Transportation Board.
Sec. 2342. Jurisdiction of court of appeals
The court of appeals (other than the United States Court of
Appeals for the Federal Circuit) has exclusive jurisdiction to
enjoin, set aside, suspend (in whole or in part), or to
determine the validity of--
(1) all final orders of the Federal Communications
Commission made reviewable by section 402(a) of title
47;
(2) all final orders of the Secretary of Agriculture
made under chapters 9 and 20A of title 7 [7 U.S.C. 181
et seq. and 501 et seq.], except orders issued under
sections 210(e), 217a, and 499g(a) of title 7;
[(3) all rules, regulations, or final orders of--
[(A) the Secretary of Transportation issued
pursuant to section 2, 9, 37, or 41 of the
Shipping Act, 1916 (46 U.S.C. App. 802, 803,
808, 835, 839[, and 841a]) or pursuant to part
B or C of subtitle IV of title 49 [49 U.S.C.
13101 et seq. or 15101 et seq.]; and
[(B) the Federal Maritime Commission issued
pursuant to--
[(i) section 19 of the Merchant
Marine Act, 1920 (46 U.S.C. App. 876) ;
[(ii) section 14 or 17 of the
Shipping Act of 1984 (46 U.S.C. App.
1713 or 1716); or
[(iii) section 2(d) or 3(d) of the
Act of November 6, 1966 (46 U.S.C. App.
817d(d) or 817e(d) [) ];
[(iv), (v) [Redesignated]]
(3) all rules, regulations, or final orders of the
Secretary of Transportation issued pursuant to section
2, 9, 37, 41, or 43 of the Shipping Act, 1916 (46
U.S.C. App. 802, 803, 808, 835, 839, or 841a) or
pursuant to part B or C of subtitle IV of title 49 (49
U.S.C. 13101 et seq. or 15101 et seq.);
(4) all final orders of the Atomic Energy Commission
made reviewable by section 2239 of title 42;
[(5) all rules, regulations, or final orders of the
Surface Transportation Board made reviewable by section
2321 of this title;]
(5) all rules, regulations, or final orders of the
Intermodal Transportation Board--
(A) made reviewable by section 2321 of this
title; or
(B) pursuant to--
(i) section 19 of the Merchant Marine
Act, 1920 (46 U.S.C. App. 876);
(ii) section 14 or 17 of the Shipping
Act of 1984 (46 U.S.C. App. 1713 or
1716); or
(iii) section 2(d) or 3(d) of the Act
of November 6, 1966 (46 U.S.C. App.
817d(d) or 817e(d));
(6) all final orders under section 812 of the Fair
Housing Act [42 U.S.C. 3612]; and
(7) all final agency actions described in section
20114(c) of title 49.
Jurisdiction is invoked by filing a petition as provided by
section 2344 of this title.
TITLE 46--UNITED STATES CODE
* * * * * * *
CHAPTER 112--MERCHANT MARINER BENEFITS
Sec.
11201. Qualified service.
11202. Documentation of qualified service.
11203. Eligibility for certain veterans' benefits.
11204. Processing fees.
Sec. 11201. Qualified service
For purposes of this chapter, a person engaged in qualified
service if, between August 16, 1945, and December 31, 1946, the
person--
(1) was a member of the United States merchant marine
(including the Army Transport Service and the Naval
Transportation Service) serving as a crewmember of a
vessel that was--
(A) operated by the War Shipping
Administration or the Office of Defense
Transportation (or an agent of the
Administration or Office);
(B) operated in waters other than inland
waters, the Great Lakes, other lakes, bays, and
harbors of the United States;
(C) under contract or charter to, or property
of, the Government of the United States; and
(D) serving the Armed Forces; and
(2) while so serving, was licensed or otherwise
documented for service as a crewmember of such a vessel
by an officer or employee of the United States
authorized to license or document the person for such
service.
Sec. 11202. Documentation of qualified service
(a) Record of Service.--The Secretary shall, upon
application--
(1) issue a certificate of honorable discharge to a
person who, as determined by the Secretary, engaged in
qualified service of a nature and duration that
warrants issuance of the certificate; and
(2) correct, or request the appropriate official of
the Federal government to correct, the service records
of the person to the extent necessary to reflect the
qualified service and the issuance of the certificate
of honorable discharge.
(b) Timing of Documentation.--The Secretary shall take action
on an application under subsection (a) not later than one year
after the Secretary receives the application.
(c) Standards Relating to Service.--In making a determination
under subsection (a)(1), the Secretary shall apply the same
standards relating to the nature and duration of service that
apply to the issuance of honorable discharges under section
401(a)(1)(b) of the GI Bill Improvement Act of 1977 (38 U.S.C.
106 note).
(d) Correction of Records.--An official of the Federal
government who is requested to correct service records under
subsection (a)(2) shall do so.
Sec. 11203. Eligibility for certain veterans' benefits
(a) Eligibility.--
(1) In general.--The qualified service of an
individual referred to in paragraph (2) is deemed to be
active duty in the armed forces during a period of war
for purposes of eligibility for benefits under chapters
23 and 24 of title 38.
(2) Covered individuals.--Paragraph (1) applies to an
individual who--
(A) receives an honorable discharge
certificate under section 11202 of this title;
and
(B) is not eligible under any other provision
of law for benefits under laws administered by
the Secretary of Veterans Affairs.
(b) Reimbursement for Benefits Provided.--The Secretary
shall reimburse the Secretary of Veterans Affairs for the value
of benefits that the Secretary of Veterans Affairs provides for
an individual by reason of eligibility under this section.
(c) Prospective Applicability.--An individual is not entitled
to receive, and may not receive, benefits under this chapter
for any period before the date of enactment of this chapter.
Sec. 11204. Processing fees
(a) Collection of Fees.--The Secretary shall collect a fee
of $30 from each applicant for processing an application
submitted under section 11202(a) of this title.
(b) Treatment of Fees Collected.--Amounts received by the
Secretary under this section shall be credited to
appropriations available to the secretary for carrying out this
chapter.
Section 2, Public Law 89-777
[46 U.S.C. App. 817d]
Sec. 817d. Financial responsibility of owners and charterers for death
or injury to passengers or other persons
(a) Amount; Method of Establishment.--Each owner or
charterer of an American or foreign vessel having berth or
stateroom accommodations for fifty or more passengers, and
embarking passengers at United States ports, shall establish,
under regulations prescribed by the [Federal Maritime
Commission] Intermodal Transportation Board, his financial
responsibility to meet any liability he may incur for death or
injury to passengers or other persons on voyages to or from
United States ports, in an amount based upon the number of
passenger accommodations aboard the vessel, calculated as
follows: $20,000 for each passenger accommodation up to and
including five hundred; plus $15,000 for each additional
passenger accommodation between five hundred and one and one
thousand; plus $10,000 for each additional passenger
accommodation between one thousand and one and one thousand
five hundred; plus $5,000 for each passenger accommodation in
excess of one thousand five hundred: Provided, however, That if
such owner or charterer is operating more than one vessel subject to
this section, the foregoing amount shall be based upon the number of
passenger accommodations on the vessel being so operated which has the
largest number of passenger accommodations. This amount shall be
available to pay any judgment for damages, whether an amount less than
or more than $20,000 for death or injury occurring on such voyages to
any passenger or other person. Such financial responsibility may be
established by any one of, or a combination of, the following methods
which is acceptable to the [Commission:] Board: (1) policies of
insurance, (2) surety bonds, (3) qualifications as a self-insurer, or
(4) other evidence of financial responsibility.
(b) Issuance of Bond When Filed With [Commission] Board._If
a bond is filed with the [Commission,] Board then such bond
shall be issued by a bonding company authorized to do business
in the United States or any State thereof or the District of
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands,
or any territory or possession of the United States.
(c) Civil Penalties for Violations; Remission or Mitigation
of Penalties.--Any person who shall violate this section shall
be subject to a civil penalty of not more than $5,000 in
addition to a civil penalty of $200 for each passage sold, such
penalties to be assessed by the [Federal Maritime Commission.]
Intermodal Transportation Board. These penalties may be
remitted or mitigated by the [Federal Maritime Commission]
Intermodal Transportation Board upon such terms as it in its
discretion shall deem proper.
(d) Rules and Regulations.--The [Federal Maritime
Commission] Intermodal Transportation Board is authorized to
prescribe such regulations as may be necessary to carry out the
provisions of this section. The provisions of the Shipping Act
of 1984 shall apply with respect to proceedings conducted by
the [Commission] Board under this section.
(e) Refusal of Departure Clearance.--At the port or place
of departure from the United States of any vessel described in
subsection (a) of this section, the Customs Service shall
refuse the clearance required by section 4197 of the Revised
Statutes (46 U.S.C. 91) to any such vessel which does not have
evidence furnished by the [Federal Maritime Commission]
Intermodal Transportation Board that the provisions of this
section have been complied with.
Section 3, Public Law 89-777
[46 U.S.C. App. 817e]
Sec. 817e. Financial responsibility for indemnification of passengers
for nonperformance of transportation
(a) Filing of Information or Bond With [Commission]
Board.--No person in the United States shall arrange, offer,
advertise, or provide passage on a vessel having berth or
stateroom accommodations for fifty or more passengers and which
is to embark passengers at United States ports without there
first having been filed with the [Federal Maritime Commission]
Intermodal Transportation Board such information as the
[Commission] Board may deem necessary to establish the
financial responsibility of the person arranging, offering,
advertising, or providing such transportation, or in lieu
thereof a copy of a bond or other security, in such form as the
[Commission,] Board, by rule or regulation, may require and
accept, for indemnification of passengers for nonperformance of
the transportation.
(b) Issuance of Bond When Filed With [Commission;] Board;
Amount of Bond.--If a bond is filed with the [Commission,]
Board, such bond shall be issued by a bonding company
authorized to do business in the United States or any State
thereof, or the District of Columbia, the Commonwealth of
Puerto Rico, the Virgin Islands or any territory or possession
of the United States.
(c) Civil Penalties for Violations; Remission or Mitigation
of Penalties.--Any person who shall violate this section shall
be subject to a civil penalty of not more than $5,000 in
addition to a civil penalty of $200 for each passage sold, such
penalties to be assessed by the [Federal Maritime Commission]
Intermodal Transportation Board. These penalties may be
remitted or mitigated by the [Federal Maritime Commission]
Intermodal Transportation Board upon such terms as it in its
discretion shall deem proper.
(d) Rules and Regulations.--The [Federal Maritime
Commission] Intermodal Transportation Board is authorized to
prescribe such regulations as may be necessary to carry out the
provisions of this section. The provisions of the Shipping Act
of 1984 shall apply with respect to proceedings conducted by
the [Commission] Board under this section.
(e) Refusal of Departure Clearance.--At the port or place
of departure from the United States of any vessel described in
subsection (a) of this section, the Customs Service shall
refuse the clearance required by section 4197 of the Revised
Statutes (46 U.S.C. 91) [46 U.S.C. Appx. 91] to any such vessel
which does not have evidence furnished by the [Federal Maritime
Commission] Intermodal Transporation Board that the provisions
of this section have been complied with.
Section 19, Merchant Marine Act, 1920
[46 U.S.C. App. 876]
Sec. 876. Power of Secretary and [Commission] Board to make rules and
regulations
[(1)] (a) The Secretary of Transportation is authorized and
directed in aid of the accomplishment of the purposes of this
Act--
[(a)] (1) To make all necessary rules and regulations to
carry out the provisions of this Act;
And the [Federal Maritime Commission] Intermodal Transportation
Board is authorized and directed in aid of the accomplishment
of the purposes of this Act:
[(b)] (2) To make rules and regulations affecting shipping
in the foreign trade not in conflict with law in order to
adjust or meet general or special conditions unfavorable to
shipping in the foreign trade, whether in any particular trade
or upon anyparticular route or in commerce generally, including
intermodal movements, terminal operations, cargo solicitation,
[forwarding and] agency services, [non-vessel-operating common carrier
operations,] ocean transportation intermediary services and operations,
and other activities and services integral to transportation systems,
and which arise out of or result from foreign laws, rules, or
regulations or from competitive [methods or practices] methods, pricing
practices, or other practices employed by owners, operators, agents, or
masters of vessels of a foreign country; and
[(c)] (3) To request the head of any department,
board, bureau, or agency of the Government to suspend,
modify, or annul rules or regulations which have been
established by such department, board, bureau, or
agency, or to make new rules or regulations affecting
shipping in the foreign trade other than such rules or
regulations relating to the Public Health Service, the
Consular Service, and the Steamboat Inspection Service.
[(2)] (b) No rule or regulation shall be established by any
department, board, bureau, or agency of the Government which
affect [affects] shipping in the foreign trade, except rules or
regulations affecting the Public Health Service, the Consular
Service, and the Steamboat Inspection Service, until such rule
or regulation has been submitted to the board for its approval
and final action has been taken thereon by the board or the
President.
[(3)] (c) Whenever the head of any department, board, bureau,
or agency of the Government refuses to suspend, modify, or
annul any rule or regulation, or make a new rule or regulation
upon request of the board, as provided in [subdivision (c) of
paragraph (1)] subsection (a)(3) of this section, or objects to
the decision of the board in respect to the approval of any
rule or regulation, as provided in [paragraph (2)] subsection
(d) of this section, either the board or the head of the
department, board, bureau, or agency which has established or
is attempting to establish the rule or regulation in question
may submit the facts to the President, who is hereby authorized
to establish or suspend, modify, or annul such rule or
regulation.
[(4)] (d) No rule or regulation shall be established which in
any manner gives vessels owned by the United States any
preference or favor over those vessels documented under the
laws of the United States and owned by persons who are citizens
of the United States.
[(5)] (e) The [Commission] Board may initiate a rule or
regulation under [paragraph (1)(b)] subsection (a)(2) of this
section either on its own motion or pursuant to a petition. Any
person, including a common carrier, tramp operator, bulk
operator, shipper, shippers' association, ocean [freight
forwarder,] transportation intermediary, marine terminal
operator, or any component of the Government of the United
States, may file a petition for relief under [paragraph (1)(b)
of this section] that subsection.
[(6)] (f) In furtherance of the purposes of [paragraph
(1)(b)] subsection (a)(2) of this section--
[(a)] (1) the [Commission] Board may, by order,
require any person (including any common carrier, tramp
operator, bulk operator, shipper, shippers'
association, ocean [freight forwarder,] transporation
intermediary, or marine terminal operator, or an
officer, receiver, trustee, lessee, agent, or employee
thereof) to file with the [Commission] Board a report,
answers to questions, documentary material, or other
information which the [Commission] Board considers
necessary or appropriate;
[(b)] (2) the [Commission] Board may require a report
or answers to questions to be made under oath;
[(c)] (3) the [Commission] Board may prescribe the
form and the time for response to a report and answers
to questions; and
[(d)] (4) a person who fails to file a report,
answer, documentary material, or other information
required under this paragraph shall be liable to the
United States Government for a civil penalty of not
more than $5,000 for each day that the information is
not provided.
[(7)] (g) In proceedings under [paragraph (1)(b)] subsection
(a)(2) of this section--
[(a)] (1) the [Commission] Board may authorize a
party to use depositions, written interrogatories, and
discovery procedures that, to the extent practicable,
are in conformity with the rules applicable in civil
proceedings in the district courts of the United
States;
[(b)] (2) the [Commission] Board may by subpoena
compel the attendance of witnesses and production of
books, papers, documents, and other evidence;
[(c)] (3) subject to funds being provided by
appropriations Acts, witnesses are, unless otherwise
prohibited by law, entitled to the same fees and
mileage as in the courts of the United States;
[(d)] (4) for failure to supply information ordered
to be produced or compelled by subpoena under
subdivision (b), the [Commission] Board may--
[(i)] (A) after notice and an opportunity for
hearing, suspend [tariffs of a common carrier]
tariffs and service contracts of a common
carrier or that common carrier's right to [use
the tariffs of conferences] use tariffs of
conferences and service contracts of agreements
of which it is a member, or
[(ii)] (B) assess a civil penalty of not more
than $5,000 for each day that the information
is not provided; and
[(e)] (5) when a person violates an order of the
[Commission] Board or fails to comply with a subpoena,
the [Commission] Board may seek enforcement by a United
States district court having jurisdiction over the
parties, and if, after hearing, the court determines
that the order was regularly made and duly issued, it
shall enforce the order by an appropriate injunction or
other process, mandatory or otherwise.
[(8)] (h) Notwithstanding any other law, the [Commission]
Board may refuse to disclose to the public a response or other
information provided under the terms of this section.
[(9)] (i) If the [Commission] Board finds that conditions
that are unfavorable to shipping under [paragraph (1)(b)]
subsection (a)(2) of this section exist, the [Commission] Board
may--
[(a)] (1) limit sailings to and from United States
ports or the amount or type of cargo carried;
[(b)] (2) suspend, in whole or in part, [tariffs
filed with the [Commission] Board] tariffs and service
contracts for carriage to or from United States ports,
including a common carrier's right to [use the tariffs
of conferences] use tariffs of conferences and service
contracts of agreements in United States trades of
which it is a member for any period the [Commission]
Board specifies;
[(c)] (3) suspend, in whole or in part, an ocean
common carrier's right to operate under an agreement
filed with the [Commission] Board, including any
agreement authorizing preferential treatment at
terminals, preferential terminal leases, space
chartering, or pooling of cargoes or revenue with other
ocean common carriers;
[(d)] (4) impose a fee, not to exceed $1,000,000 per
voyage; or
[(e)] (5) take any other action the [Commission]
Board finds necessary and appropriate to adjust or meet
any condition unfavorable to shipping in the foreign
trade of the United States.
[(10)] (j) Upon request by the [Commission] Board--
[(a)] (1) the collector of customs at the port or
place of destination in the United States shall refuse
the clearance required by section 4197 of the Revised
Statutes (46 App. U.S.C. 91) to a vessel of a country
that is named in a rule or regulation issued by the
[Commission] Board under [paragraph (1) (b)] subsection
(a)(2) of this section, and shall collect any fees
imposed by the [Commission] Board under [paragraph (9)
(d)] subsection (i)(4) of this section; and
[(b)] (2) the Secretary of the department in which
the Coast Guard is operating shall deny entry for
purpose of oceanborne trade, of a vessel of a country
that is named in a rule or regulation issued by the
[Commission] Board under [paragraph (1)(b)] subsection
(a)(2) of this section, to any port or place in the
United States or the navigable waters of the United
States, or shall detain that vessel at the port or
place in the United States from which it is about to
depart for another port or place in the United States.
[(11)] (k) A common carrier that accepts or handles cargo for
carriage under a [tariff] tariff or service contract that has
been suspended under [paragraph (7) (d) or (9) (b)] subsection
(g)(4) or (i)(2) of this section, or after its right to use
another [tariff] tariff or service contract has been suspended
under those [paragraphs,] subsections is subject to a civil
penalty of not more than $50,000 for each day that it is found
to be operating under a suspended [tariff] tariff or service
contract.
[(12)] (l) The [Commission] Board may consult with, seek the
cooperation of, or make recommendations to other appropriate
Government agencies prior to taking any action under this
section.
Section 2, Shipping Act of 1984
[46 U.S.C. App. 1701]
Sec. 1701. Declaration of policy
The purposes of this Act are--
(1) to establish a nondiscriminatory regulatory
process for the common carriage of goods by water in
the foreign commerce of the United States with a
minimum of government intervention and regulatory
costs;
(2) to provide an efficient and economic
transportation system in the ocean commerce of the
United States that is, insofar as possible, in harmony
with, and responsive to, international shipping
practices; [and]
(3) to encourage the development of an economically
sound and efficient United States-flag liner fleet
capable of meeting national security [needs.] needs;
and
(4) to promote the growth and development of United
States exports through competitive and efficient ocean
transportation and by placing a greater reliance on the
marketplace.
Section 3, Shipping Act of 1984
[46 U.S.C. App. 1702]
Sec. 1702. Definitions
As used in this Act--
(1) ``agreement'' means an understanding,
arrangement, or association (written or oral) and any
modification or cancellation thereof; but the term does
not include a maritime labor agreement.
(2) ``antitrust laws'' means the Act of July 2, 1890
(ch. 647, 26 Stat. 209), as amended; the Act of October
15, 1914 (ch. 323, 38 Stat. 730), as amended; the
Federal Trade Commission Act (38 Stat. 717) [15 U.S.C.
41 et seq.], as amended; sections 73 and 74 of the Act
of August 27, 1894 (28 Stat. 570) [15 U.S.C. 8, 9], as
amended; the Act of June 19, 1936 (ch. 592, 49 Stat.
1526), as amended; the Antitrust Civil Process Act (76
Stat. 548) [15 U.S.C. 1311 et seq.], as amended; and
amendments and Acts supplementary thereto.
(3) ``assessment agreement'' means an agreement,
whether part of a collective-bargaining agreement or
negotiated separately, to the extent that it provides
for the funding of collectively bargained fringe
benefit obligations on other than a uniform man-hour
basis, regardless of the cargo handled or type of
vessel or equipment utilized.
(4) ``Board'' means the Intermodal Transportation
Board.
[(4)] (5) ``bulk cargo'' means cargo that is loaded
and carried in bulk without mark or count.
[(5) ``Commission'' means the Federal Maritime
Commission.]
(6) ``common carrier'' means a person holding itself
out to the general public to provide transportation by
water of passengers or cargo between the United States
and a foreign country for compensation that--
(A) assumes responsibility for the
transportation from the port or point of
receipt to the port or point of destination,
and
(B) utilizes, for all or part of that
transportation, a vessel operating on the high
seas or the Great Lakes between a port in the
United States and a port in a foreign country,
except that the term does not include a common
carrier engaged in ocean transportation by
ferry boat, ocean tramp, or chemical parcel-
tanker. As used in this paragraph, ``chemical
parcel-tanker'' means a vessel whose cargo-
carrying capability consists of individual
cargo tanks for bulk chemicals that are a
permanent part of the vessel, that have
segregation capability with piping systems to
permit simultaneous carriage of several bulk
chemical cargoes with minimum risk of cross-
contamination, and that has a valid certificate
of fitness under the International Maritime
Organization Code for the Construction and
Equipment of Ships Carrying Dangerous Chemicals
in Bulk.
(7) ``conference'' means an association of ocean
common carriers permitted, pursuant to an approved or
effective agreement, to engage in concerted activity
and to utilize a common tariff; but the term does not
include a joint service, consortium, pooling, sailing,
or transshipment arrangement.
(8) ``controlled carrier'' means an ocean common
carrier that is, or whose operating assets are,
directly or indirectly, owned or controlled by [the
government under whose registry the vessels of the
carrier operate;] a government; ownership or control by
a government shall be deemed to exist with respect to
any carrier if--
(A) a majority portion of the interest in the
carrier is owned or controlled in any manner by
that government, by any agency thereof, or by
any public or private person controlled by that
government; or
(B) that government has the right to appoint
or disapprove the appointment of a majority of
the directors, the chief operating officer, or
the chief executive officer of the carrier.
[(9) ``deferred rebate'' means a return by a common
carrier of any portion of the freight money to a
shipper as a consideration for that shipper giving all,
or any portion, of its shipments to that or any other
common carrier, or for any other purpose, the payment
of which is deferred beyond the completion of the
service for which it is paid, and is made only if,
during both the period for which computed and the
period of deferment, the shipper has complied with the
terms of the rebate agreement or arrangement.]
(9) ``deferred rebate'' means a return by a common
carrier of any portion of freight money to a shipper as
a consideration for that shipper giving all, or any
portion, of its shipments to that or any other common
carrier over a fixed period of time, the payment of
which is deferred beyond the completion of service for
which it is paid, and is made only if the shipper has
agreed to make a further shipment or shipments with
that or any other common carrier.
[(10) ``fighting ship'' means a vessel used in a
particular trade by an ocean common carrier or group of
such carriers for the purpose of excluding, preventing,
or reducing competition by driving another ocean common
carrier out of that trade.]
[(11)] (10) ``forest products'' means forest
products [in an unfinished or semifinished state that
require special handling moving in lot sizes too large
for a container,] including, but not limited to lumber
in bundles, rough timber, ties, poles, piling,
laminated beams, bundled siding, bundled plywood,
bundled core stock or veneers, bundled particle or
fiber boards, bundled hardwood, wood pulp in rolls,
wood pulp in unitized bales, [paper board in rolls, and
paper in rolls.] paper and paper board in rolls or in
pallet or skid-sized sheets.
[(12)] (11) ``inland division'' means the amount
paid by a common carrier to an inland carrier for the
inland portion of through transportation offered to the
public by the common carrier.
[(13)] (12) ``inland portion'' means the charge to
the public by a common carrier for the nonocean portion
of through transportation.
[(14)] (13) ``loyalty contract'' means a contract
with an ocean common carrier or [conference, other than
a service contract or contract based upon time-volume
rates,] agreement by which a shipper obtains lower
rates by committing all or a fixed portion of its cargo
to that carrier or [conference.] agreement and the
contract provides for a deferred rebate arrangement.
[(15)] (14) ``marine terminal operator'' means a
person engaged in the United States in the business of
furnishing wharfage, dock, warehouse, or other terminal
facilities in connection with a common [carrier.]
carrier, or in connection with a common carrier and a
water carrier subject to subchapter II of chapter 135
of title 49, United States Code.
[(16)] (15) ``maritime labor agreement'' means a
collective-bargaining agreement between an employer
subject to this Act, or group of such employers, and a
labor organization representing employees in the
maritime or stevedoring industry, or an agreement
preparatory to such a collective-bargaining agreement
among members of a multiemployer bargaining group, or
an agreement specifically implementing provisions of
such a collective-bargaining agreement or providing for
the formation, financing, or administration of a
multiemployer bargaining group; but the term does not
include an assessment agreement.
[(17) ``non-vessel-operating common carrier'' means a
common carrier that does not operate the vessels by
which the ocean transportation is provided, and is a
shipper in its relationship with an ocean common
carrier.]
[(18)] (16) ``ocean common carrier'' means a vessel-
operating common carrier.
[(19) ``ocean freight forwarder'' means a person in
the United States that--
[(A) dispatches shipments from the United
States via common carriers and books or
otherwise arranges space for those shipments on
behalf of shippers; and
[(B) processes the documentation or performs
related activities incident to those
shipments.]
(17) ``ocean transportation intermediary'' means an
ocean freight forwarder or a non-vessel-operating
common carrier. For purposes of this paragraph, the
term
(A) ``ocean freight forwarder'' means a
person that--
(i) in the United States, dispatches
shipments from the United States via a
common carrier and books or otherwise
arranges space for those shipments on
behalf of shippers; and
(ii) processes the documentation or
performs related activities incident to
those shipments; and
(B) ``non-vessel-operating common carrier''
means a common carrier that does not operate
the vessels by which the ocean transportation
is provided, and is a shipper in its
relationship with an ocean common carrier.
[(20)] (18) ``person'' includes individuals,
corporations, partnerships, and associations existing
under or authorized by the laws of the United States or
of a foreign country.
[(21) ``service contract'' means a contract between a
shipper and an ocean common carrier or conference in
which the shipper makes a commitment to provide a
certain minimum quantity of cargo over a fixed time
period, and the ocean common carrier or conference
commits to a certain rate or rate schedule as well as a
defined service level--such as, assured space, transit
time, port rotation, or similar service features; the
contract may also specify provisions in the event of
nonperformance on the part of either party.]
(19) ``service contract'' means a written contract,
other than a bill of lading or a receipt, between one
or more shippers and an individual common carrier or an
agreement between or among ocean common carriers in
which the shipper or shippers makes a commitment to
provide a certain volume or portion of cargo over a
fixed time period, and the common carrier or the
agreement commits to a certain rate or rate schedule
and a defined service level, such as assured space,
transit time, port rotation, or similar service
features. The contract may also specify provisions in
the event of nonperformance on the part of any party.
[(22)] (20) ``shipment'' means all of the cargo
carried under the terms of a single bill of lading.
[(23) ``shipper'' means an owner or person for whose
account the ocean transportation of cargo is provided
or the person to whom delivery is to be made.]
(21) ``shipper'' means--
(A) a cargo owner;
(B) the person for whose account the ocean
transportation is provided;
(C) the person to whom delivery is to be
made;
(D) a shippers' association; or
(E) an ocean transportation intermediary, as
defined in paragraph (17)(B) of this section,
that accepts responsibility for payment of all
charges applicable under the tariff or service
contract.
[(24)] (22) ``shippers' association'' means a group
of shippers that consolidates or distributes freight on
a nonprofit basis for the members of the group in order
to secure carload, truckload, or other volume rates or
service contracts.
[(25)] (23) ``through rate'' means the single amount
charged by a common carrier in connection with through
transportation.
[(26)] (24) ``through transportation'' means
continuous transportation between origin and
destination for which a through rate is assessed and
which is offered or performed by one or more carriers,
at least one of which is a common carrier, between a
United States point or port and a foreign point or
port.
[(27)] (25) ``United States'' includes the several
States, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Marianas,
and all other United States territories and
possessions.
Section 4, Shipping Act of 1984
[46 U.S.C. App. 1703]
Sec. 1703. Agreements within scope of [the Act] 46 U.S.C. App. 1701 et
seq.
(a) Ocean Common Carriers.--This Act applies to agreements by
or among ocean common carriers to--
(1) discuss, fix, or regulate transportation rates,
including through rates, cargo space accommodations,
and other conditions of service;
(2) pool or apportion traffic, revenues, earnings, or
losses;
(3) allot ports or restrict or otherwise regulate the
number and character of sailings between ports;
(4) limit or regulate the volume or character of
cargo or passenger traffic to be carried;
(5) engage in exclusive, preferential, or cooperative
working arrangements among themselves or with one or
more marine terminal [operators or non-vessel-operating
common carriers;] operators;
(6) control, regulate, or prevent competition in
international ocean transportation; [and] or
(7) regulate or prohibit their use of service
contracts.
(b) Marine Terminal Operators.--This Act applies to
agreements [(to the extent the agreements involve ocean
transportation in the foreign commerce of the United States)]
among marine terminal operators and among one or more marine
terminal operators and one or more ocean common carriers to--
(1) discuss, fix, or regulate rates or other
conditions of service; and
(2) engage in exclusive, preferential, or cooperative
working [arrangements.] arrangements, to the extent
that such agreements involve ocean transportation in
the foreign commerce of the United States.
(c) Acquisitions.--This Act does not apply to an acquisition
by any person, directly or indirectly, of any voting security
or assets of any other person.
Section 5, Shipping Act of 1984
[46 U.S.C. App. 1704]
Sec. 1704. Agreements
(a) Filing Requirements.--A true copy of every agreement
entered into with respect to an activity described in section 4
(a) or (b) of this Act [46 U.S.C. App. 1703 (a) or (b)] shall
be filed with the [Commission] Board, except agreements related
to transportation to be performed within or between foreign
countries and agreements among common carriers to establish,
operate, or maintain a marine terminal in the United States. In
the case of an oral agreement, a complete memorandum specifying
in detail the substance of the agreement shall be filed. The
[Commission] Board may by regulation prescribe the form and
manner in which an agreement shall be filed and the additional
information and documents necessary to evaluate the agreement.
(b) Conference Agreements.--Each conference agreement must--
(1) state its purpose;
(2) provide reasonable and equal terms and conditions
for admission and readmission to conference membership
for any ocean common carrier willing to serve the
particular trade or route;
(3) permit any member to withdraw from conference
membership upon reasonable notice without penalty;
(4) at the request of any member, require an
independent neutral body to police fully the
obligations of the conference and its members;
(5) prohibit the conference from engaging in conduct
prohibited by section 10(c) (1) or (3) of this Act [46
U.S.C. App. 1709(c) (1), (3)];
(6) provide for a consultation process designed to
promote--
(A) commercial resolution of disputes, and
(B) cooperation with shippers in preventing
and eliminating malpractices;
(7) establish procedures for promptly and fairly
considering shippers' requests and complaints; [and]
[(8) provide that any member of the conference may
take independent action on any rate or service item
required to be filed in a tariff under section 8(a) of
this Act [46 U.S.C. App. 1707(a)] upon not more than 10
calendar days' notice to the conference and that the
conference will include the new rate or service item in
its tariff for use by that member, effective no later
than 10 calendar days after receipt of the notice, and
by any other member that notifies the conference that
it elects to adopt the independent rate or service item
on or after its effective date, in lieu of the existing
conference tariff provision for that rate or service
item.]
(8) provide that any member of the conference may
take independent action on any rate or service item
upon not more than 5 calendar days' notice to the
conference and that, except for exempt commodities not
published in the conference tariff, the conference will
include the new rate or service item in its tariff for
use by that member, effective no later than 5 calendar
days after receipt of the notice, and by any other
member that notifies the conference that it elects to
adopt the independent rate or service item on or after
its effective date, in lieu of the existing conference
tariff provision for that rate or service item; and
(9) prohibit the agreement from--
(A) prohibiting or restricting the members of
the agreement from engaging in negotiations for
service contracts with 1 or more shippers;
(B) requiring a member of the agreement to
disclose a negotiation on a service contract,
or the terms and conditions of a service
contract, other than those specified by section
8(c)(3) of this Act; and
(C) issuing mandatory rules or requirements
affecting an agreement member's right to
negotiate and enter into service contracts.
An agreement may issue voluntary guidelines relating to the
terms and procedures of agreement members' service contracts if
the guidelines explicitly state the right of members of the
agreement not to follow the guidelines and the guidelines are
filed with the agreement.
(c) Interconference Agreements.--Each agreement between
carriers not members of the same conference must provide the
right of independent action for each carrier. Each agreement
between conferences must provide the right of independent
action for each conference.
(d) Assessment Agreements.--Assessment agreements shall be
filed with the [Commission] Board and become effective on
filing. The [Commission] Board shall thereafter, upon complaint
filed within 2 years of the date of the agreement, disapprove,
cancel, or modify any such agreement, or charge or assessment
pursuant thereto, that it finds, after notice and hearing, to
be unjustly discriminatory or unfair as between carriers,
shippers, or ports. The [Commission] Board shall issue its
final decision in any such proceeding within 1 year of the date
of filing of the complaint. To the extent that an assessment or
charge is found in the proceeding to be unjustly discriminatory
or unfair as between carriers, shippers, or ports, the
[Commission] Board shall remedy the unjust discrimination or
unfairness for the period of time between the filing of the
complaint and the final decision by means of assessment
adjustments. These adjustments shall be implemented by
prospective credits or debits to future assessments or charges,
except in the case of a complainant who has ceased activities
subject to the assessment or charge, in which case reparation
may be awarded. Except for this subsection and section 7(a) of
this Act [46 U.S.C. App. 1706(a)], [this Act, the Shipping Act,
1916, and the Intercoastal Shipping Act, 1933,] this Act and
the Shipping Act, 1916 do not apply to assessment agreements.
(e) Maritime Labor Agreements.--This Act and the Shipping
Act, 1916 do not apply to maritime labor agreements. This
subsection does not exempt from this Act or the Shipping Act,
1916 any rates, charges, regulations, or practices of a common
carrier that are required to be set forth in a tariff, whether
or not those rates, charges, regulations, or practices arise
out of, or are otherwise related to, a maritime labor
agreement.
Section 6, Shipping Act of 1984
[46 U.S.C. App. 1705]
Sec. 1705. Action on agreements
(a) Notice.--Within 7 days after an agreement is filed, the
[Commission] Board shall transmit a notice of its filing to the
Federal Register for publication.
(b) Review Standard.--The [Commission] Board shall reject any
agreement filed under section 5(a) of this Act [46 U.S.C. App.
1704(a)] that, after preliminary review, it finds does not meet
the requirements of section 5 [46 U.S.C. App. 1704]. The
[Commission] Board shall notify in writing the person filing
the agreement of the reason for rejection of the agreement.
(c) Review and Effective Date.--Unless rejected by the
[Commission] Board under subsection (b) , agreements, other
than assessment agreements, shall become effective--
(1) on the 45th day after filing, or on the 30th day
after notice of the filing is published in the Federal
Register, whichever day is later; or
(2) if additional information or documentary material
is requested under subsection (d) , on the 45th day
after the [Commission] Board receives--
(A) all the additional information and
documentary material requested; or
(B) if the request is not fully complied
with, the information and documentary material
submitted and a statement of the reasons for
noncompliance with the request. The period
specified in paragraph (2) may be extended only
by the United States District Court for the
District of Columbia upon an application of the
[Commission] Board under subsection (i).
(d) Additional Information.--Before the expiration of the
period specified in subsection (c) (1) , the [Commission] Board
may request from the person filing the agreement any additional
information and documentary material it deems necessary to make
the determinations required by this section.
(e) Request for Expedited Approval.--The [Commission] Board
may, upon request of the filing party, shorten the review
period specified in subsection (c) , but in no event to a date
less than 14 days after notice of the filing of the agreement
is published in the Federal Register.
(f) Term of Agreements.--The [Commission] Board may not limit
the effectiveness of an agreement to a fixed term.
(g) Substantially Anticompetitive Agreements.--If, at any
time after the filing or effective date of an agreement, the
[Commission] Board determines that the agreement is likely, by
a reduction in competition, to produce an unreasonable
reduction in transportation service or an unreasonable increase
in transportation cost, it may, after notice to the person
filing the agreement, seek appropriate injunctive relief under
subsection (h) .
(h) Injunctive Relief.--The [Commission] Board may, upon
making the determination specified in subsection (g) , bring
suit in the United States District Court for the District of
Columbia to enjoin operation of the agreement. The court may
issue a temporary restraining order or preliminary injunction
and, upon a showing that the agreement is likely, by a
reduction in competition, to produce an unreasonable reduction
in transportation service or an unreasonable increase in
transportation cost, may enter a permanent injunction. In a
suit under this subsection, the burden of proof is on the
[Commission] Board. The court may not allow a third party to
intervene with respect to a claim under this subsection.
(i) Compliance with Informational Needs.--If a person filing
an agreement, or an officer, director, partner, agent, or
employee thereof, fails substantially to comply with a request
for the submission of additional information or documentary
material within the period specified in subsection (c), the
United States District Court for the District of Columbia, at
the request of the [Commission] Board--
(1) may order compliance;
(2) shall extend the period specified in subsection
(c)(2) until there has been substantial compliance; and
(3) may grant such other equitable relief as the
court in its discretion determines necessary or
appropriate.
(j) Nondisclosure of Submitted Material.--Except for an
agreement filed under section 5 of this Act [46 U.S.C. App.
1704], information and documentary material filed with the
[Commission] Board under section 5 or 6 [46 U.S.C. App. 1704
and this section] is exempt from disclosure under section 552
of title 5, United States Code [5 U.S.C. 552] and may not be
made public except as may be relevant to an administrative or
judicial action or proceeding. This section does not prevent
disclosure to either body of Congress or to a duly authorized
committee or subcommittee of Congress.
(k) Representation.--Upon notice to the Attorney General, the
[Commission] Board may represent itself in district court
proceedings under subsections (h) and (i) of this section and
section 11(h) of this Act [46 U.S.C. App. 1710(h)]. With the
approval of the Attorney General, the [Commission] Board may
represent itself in proceedings in the United States Courts of
Appeal under subsections (h) and (i) of this section and
section 11(h) of this Act [46 U.S.C. App. 1710(h)].
Section 7, Shipping Act of 1984
[46 U.S.C. App. 1706]
Sec. 1706. Exemption from antitrust laws
(a) In General.--The antitrust laws do not apply to--
(1) any agreement that has been filed under section 5
of this Act [46 U.S.C. App. 1704] and is effective
under section 5(d) or section 6 [46 U.S.C. App. 1704(d)
, 1705], or is exempt under section 16 of this Act [46
U.S.C. App. 1715] from any requirement of this Act;
(2) any activity or agreement within the scope of
this Act, whether permitted under or prohibited by this
Act, undertaken or entered into with a reasonable basis
to conclude that (A) it is pursuant to an agreement on
file with the [Commission] Board and in effect when the
activity took place, or (B) it is exempt under section
16 of this Act [46 U.S.C. App. 1715] from any filing or
publication requirement of this Act;
(3) any agreement or activity that relates to
transportation services within or between foreign
countries, whether or not via the United States, unless
that agreement or activity has a direct, substantial,
and reasonably foreseeable effect on the commerce of
the United States;
(4) any agreement or activity concerning the foreign
inland segment of through transportation that is part
of transportation provided in a United States import or
export trade;
(5) any agreement or activity to provide or furnish
wharfage, dock, warehouse, or other terminal facilities
outside the United States; or
(6) subject to section 20(e)(2) of this Act [46
U.S.C. App. 1719(e)(2)], any agreement, modification,
or cancellation approved by the Federal Maritime
Commission before the effective date of this Act under
section 15 of the Shipping Act, 1916 [46 U.S.C. App.
814], or permitted under section 14b thereof, and any
properly published tariff, rate, fare, or charge,
classification, rule, or regulation explanatory thereof
implementing that agreement, modification, or
cancellation.
(b) Exceptions.--This Act does not extend antitrust
immunity--
(1) to any agreement with or among air carriers, rail
carriers, motor carriers, or common carriers by water
not subject to this Act with respect to transportation
within the United States;
(2) to any discussion or agreement among common
carriers that are subject to this Act regarding the
inland divisions (as opposed to the inland portions) of
through rates within the United States; [or]
(3) to any agreement among common carriers subject to
this Act to establish, operate, or maintain a marine
terminal in the United [States.] States; or
(4) to any loyalty contract.
(c) Limitations.--
(1) Any determination by an agency or court that
results in the denial or removal of the immunity to the
antitrust laws set forth in subsection (a) shall not
remove or alter the antitrust immunity for the period
before the determination.
(2) No person may recover damages under section 4 of
the Clayton Act (15 U.S.C. 15) [15 U.S.C. 15], or
obtain injunctive relief under section 16 of that Act
(15 U.S.C. 26) [15 U.S.C. 26], for conduct prohibited
by this Act.
Section 8, Shipping Act of 1984
[46 U.S.C. App. 1707]
Sec. 1707. Tariffs
(a) In General.--
(1) Except with regard to bulk cargo, forest
products, recycled metal scrap, new assembled motor
vehicles, waste paper, and paper waste, each common
carrier and conference shall [file with the Commission,
and] keep open to public [inspection,] inspection in an
automated tariff system, tariffs showing all its rates,
charges, classifications, rules, and practices between
all points or ports on its own route and on any through
transportation route that has been established.
However, common carriers shall not be required to state
separately or otherwise reveal in [tariff filings]
tariffs the inland divisions of a through rate. Tariffs
shall--
(A) state the places between which cargo will
be carried;
(B) list each classification of cargo in use;
(C) state the level of ocean freight
forwarder compensation, if any, by a carrier or
conference;
(D) state separately each terminal or other
charge, privilege, or facility under the
control of the carrier or conference and any
rules or regulations that in any way change,
affect, or determine any part or the aggregate
of the rates or charges; [and]
(E) include sample copies of any [loyalty
contract,] bill of lading, contract of
affreightment, or other document evidencing the
transportation [agreement.] agreement; and
(F) include copies of any loyalty contract,
omitting the shipper's name.
[(2) Copies of tariffs shall be made available to any
person, and a reasonable charge may be assessed for
them.]
(2) Tariffs shall be made available electronically to
any person, without time, quantity, or other
limitation, through appropriate access from remote
locations, and a reasonable charge may be assessed for
such access. No charge may be assessed a Federal agency
for such access.
(b) Time-volume Rates.--Rates shown in tariffs filed under
subsection (a) may vary with the volume of cargo offered over a
specified period of time.
[(c) Service Contracts.--An ocean common carrier or
conference may enter into a service contract with a shipper or
shippers' association subject to the requirements of this Act.
Except for service contracts dealing with bulk cargo, forest
products, recycled metal scrap, waste paper, or paper waste,
each contract entered into under this subsection shall be filed
confidentially with the Commission, and at the same time, a
concise statement of its essential terms shall be filed with
the Commission and made available to the general public in
tariff format, and those essential terms shall be available to
all shippers similarly situated. The essential terms shall
include--
[(1) the origin and destination port ranges in the
case of port-to-port movements, and the origin and
destination geographic areas in the case of through
intermodal movements;
[(2) the commodity or commodities involved;
[(3) the minimum volume;
[(4) the line-haul rate;
[(5) the duration;
[(6) service commitments; and
[(7) the liquidated damages for nonperformance, if
any.
[The exclusive remedy for a breach of a contract entered into
under this subsection shall be an action in an appropriate
court, unless the parties otherwise agree.]
(c) Service Contracts._
(1) In general._An individual common carrier or an
agreement between or among ocean common carriers may
enter into a service contract with one or more shippers
subject to the requirements of this Act. The exclusive
remedy for a breach of a contract entered into under
this subsection shall be an action in an appropriate
court, unless the parties otherwise agree. In no case
may the contract dispute resolution forum be affiliated
with, or controlled by, any party to the contract.
(2) Filing requirements._Except for service contracts
dealing with bulk cargo, forest products, recycled
metal scrap, new assembled motor vehicles, waste paper,
or paper waste, each contract entered into under this
subsection by an individual common carrier or an
agreement shall be filed confidentially with the
[Commission] Board. Each service contract shall include
the following essential terms--
(A) the origin and destination port ranges;
(B) the origin and destination geographic
areas, in the case of through inter modal
movements;
(C) the commodity or commodities involved;
(D) the minimum volume or portion;
(E) the line-haul rate;
(F) the duration;
(G) service commitments; and
(H) the liquidated damages for
nonperformance, if any.
(3) Publication of certain essential terms._When a
service contract is filed confidentially with the
[Commission] Board, a concise statement of the terms
described in paragraphs (2)(C), (D), and (F) and the
United States port range shall be published and made
available to the public in tariff format.
(4) Disclosure of certain unpublished terms._A party
to a collective-bargaining agreement may petition the
[Commission] Board for the disclosure of any service
contract terms not required to be published by
paragraph (3) which that party considers to be in
violation of that agreement. The petition shall include
evidence demonstrating that
(A) a specific ocean common carrier is a
party to a collective-bargaining agreement with
the petitioner;
(B) the ocean common carrier may be violating
the terms and conditions of that agreement; and
(C) the alleged violation involves the moment
of cargo subject to this Act.
(5) Action by Commission] Board.--The [Commission]
Board, after reviewing a petition under paragraph (4) ,
the evidence provided with the petition, and the filed
service contracts of the carrier named in the petition,
may disclose to the petitioner only such unpublished
terms of that carrier's service contracts that the
[Commission] Board reasonably believes may constitute a
violation of the collective-bargaining agreement. The
[Commission] Board may not disclose any unpublished
service contract terms with respect to a collective-
bargaining agreement term or condition determined by
the [Commission] Board to be in violation of this Act.
(d) Rates.--No new or initial rate or change in an existing
rate that results in an increased cost to the shipper may
become effective earlier than [30 days after filing with the
Commission.] 30 calendar days after publication. The
[Commission] Board, for good cause, may allow such a new or
initial rate or change to become effective in less than 30
calendar days. A change in an existing rate that results in a
decreased cost to the shipper may become effective upon
[publication and filing with the Commission.] publication.
[(e) Refunds.--The Commission may, upon application of a
carrier or shipper, permit a common carrier or conference to
refund a portion of freight charges collected from a shipper or
to waive the collection of a portion of the charges from a
shipper if--
[(1) there is an error in a tariff of a clerical or
administrative nature or an error due to inadvertence
in failing to file a new tariff and the refund will not
result in discrimination among shippers, ports, or
carriers;
[(2) the common carrier or conference has, prior to
filing an application for authority to make a refund,
filed a new tariff with the Board that sets forth the
rate on which the refund or waiver would be based;
[(3) the common carrier or conference agrees that if
permission is granted by the Commission, an appropriate
notice will be published in the tariff, or such other
steps taken as the Commission may require that give
notice of the rate on which the refund or waiver would
be based, and additional refunds or waivers as
appropriate shall be made with respect to other
shipments in the manner prescribed by the Commission in
its order approving the application; and
[(4) the application for refund or waiver is filed
with the Commission within 180 days from the date of
shipment.]
(e) Marine Terminal Operator Schedules._A marine terminal
operator may make available to the public, subject to section
10(d) of this Act, a schedule of rates, regulations, and
practices pertaining to receiving, delivering, handling, or
storing property at its marine terminal. Any such schedule made
available to the public shall be enforceable by an appropriate
court as an implied contract without proof of actual knowledge
of its provisions.
[(f) Form.--The Commission may by regulation prescribe the
form and manner in which the tariffs required by this section
shall be published and filed. The Commission may reject a
tariff that is not filed in conformity with this section and
its regulations. Upon rejection by the Commission, the tariff
is void and its use is unlawful.]
(f) Regulations._The [Commission] Board shall by regulation
prescribe the requirements for the accessibility and accuracy
of automated tariff systems established under this section. The
[Commission] Board may, after periodic review, prohibit the use
of any automated tariff system that fails to meet
therequirements established under this section. The
[Commission] Board may not require a common carrier to provide
a remote terminal for access under subsection (a) (2) . The
[Commission] Board shall by regulation prescribe the form and
manner in which marine terminal operator schedules authorized
by this section shall be published.
Section 502, High Seas Driftnet Fisheries Enforcement Act
[Sec. 1707a. Automated tariff filing and information system
[(a) Definitions.--In this section, the following definitions
apply:
[(1) Commission. The term ``Commission'' means the
Federal Maritime Commission.
[(2) Common carrier.--The term ``common carrier''
means a common carrier under section 3 of the Shipping
Act of 1984 (46 App. U.S.C. 1702), a common carrier by
water in interstate commerce under the Shipping Act,
1916 (46 App. U.S.C. 801 et seq.), or a common carrier
by water in intercoastal commerce under the
Intercoastal Shipping Act, 1933 (46 App. U.S.C. 843 et
seq.).
[(3) Conference.--The term ``conference'' has the
meaning given that term under section 3 of the Shipping
Act of 1984 (46 App. U.S.C. 1702).
[(4) Essential terms of service contracts.--The term
``essential terms of service contracts'' means the
essential terms that are required to be filed with the
Commission and made available under section 8(c) of the
Shipping Act of 1984 (46 App. U.S.C. 1707(c)).
[(5) Tariff.--The term ``tariff'' means a tariff of
rates, charges, classifications, rules, and practices
required to be filed by a common carrier or conference
under section 8 of the Shipping Act of 1984 (46 App.
U.S.C. 1707), or a rate, fare, charge, classification,
rule, or regulation required to be filed by a common
carrier or conference under the Shipping Act, 1916 (46
U.S.C. 801 et seq.), or the Intercoastal Shipping Act,
1933 (46 App. U.S.C. 843 et seq.).
[(b) Tariff Form and Availability.--
[(1) Requirement to file. Notwithstanding any other
law, each common carrier and conference shall, in
accordance with subsection (c), file electronically
with the Commission all tariffs, and all essential
terms of service contracts, required to be filed by
that common carrier or conference under the Shipping
Act of 1984 (46 App. U.S.C. 1701 et seq.), the Shipping
Act, 1916 (46 App. U.S.C. 801 et seq.), and the
Intercoastal Shipping Act, 1933 (46 App. U.S.C. 843 et
seq.).
[(2) Availability of information. The Commission
shall make available electronically to any person,
without time, quantity, or other limitation, both at
the Commission headquarters and through appropriate
access from remote terminals--
[(A) all tariff information, and all
essential terms of service contracts, filed in
the Commission's Automated Tariff Filing and
Information System database; and
[(B) all tariff information in the System
enhanced electronically by the Commission at
any time.
[(c) Filing Schedule.--New tariffs and new essential terms of
service contracts shall be filed electronically not later than
July 1, 1992. All other tariffs, amendments to tariffs, and
essential terms of service contracts shall be filed not later
than September 1, 1992.
[(d) Fees.--
[(1) Amount of fee. The Commission shall charge,
beginning July 1 of fiscal year 1992 and in fiscal
years 1993, 1994, and 1995--
[(A) a fee of 46 cents for each minute of
remote computer access by any individual of the
information available electronically under this
section; and
[(B) (i) for electronic copies of the
Automated Tariff Filing and Information System
database (in bulk), or any portion of the
database, a fee reflecting the cost of
providing those copies, including the cost of
duplication, distribution, and user-dedicated
equipment; and
[(ii) for a person operating or maintaining
information in a database that has multiple
tariff or service contract information obtained
directly or indirectly from the Commission, a
fee of 46 cents for each minute that database
is subsequently accessed by computer by any
individual.
[(2) Exemption for Federal agencies. A Federal agency
is exempt from paying a fee under this subsection.
[(e) Enforcement.--The Commission shall use systems controls
or other appropriate methods to enforce subsection (d).
[(f) Penalties.--
[(1) Civil penalties. A person failing to pay a fee
established under subsection (d) is liable to the
United States Government for a civil penalty of not
more than $5,000 for each violation.
[(2) Criminal penalties. A person that willfully
fails to pay a fee established under subsection (d)
commits a class A misdemeanor.
[(g) Automatic Filing Implementation.--
[(1) Certification of software.--Software that
provides for the electronic filing of data in the
Automated Tariff Filing and Information System shall be
submitted to the Commission for certification. Not
later than fourteen days after a person submits
software to the Commission for certification, the
Commission shall--
[(A) certify the software if it provides for
the electronic filing of data; and
[(B) publish in the Federal Register notice
of that certification.
[(2) Repayable advance.--
[(A) Availability and use of advance. Upon
the date of enactment of this Act [enacted Nov.
2, 1992], the Secretary of the Treasury shall
make available to the Commission, as a
repayable advance, not more than $4,000,000, to
remain available until expended. The Commission
shall spend these funds to complete and upgrade
the capacity of the Automated Tariff Filing and
Information System to provide access to
information under this section.
[(B) Requirement to repay.--
[(i) In general.--Any advance made to
the Commission under subparagraph (A)
shall be repaid, with interest, to the
general fund of the Treasury not later
than September 30, 1995.
[(ii) Interest.--Interest on any
advance made to the Commission under
subparagraph (A) --
[(I) shall be at a rate
determined by the Secretary of
the Treasury, as of the close
of the calendar month preceding
the month in which the advance
is made, to be equal to the
current average market yield on
outstanding marketable
obligations of the United
States with remaining periods
to maturity comparable to the
anticipated period during which
the advance will be
outstanding; and
[(II) shall be compounded
annually.
[(3) Use of retained amounts.--Out of amounts
collected by the Commission under this section, amounts
shall be retained and expended by the Commission for
each fiscal year, without fiscal year limitation, to
carry out this section and pay back the Secretary of
the Treasury for the advance made available under
paragraph (2).
[(4) Deposit in treasury.--Except for the amounts
retained by the Commission under paragraph (3), fees
collected under this section shall be deposited in the
general fund of the Treasury as offsetting receipts.
[(h) Restriction.--No fee may be collected under this section
after fiscal year 1995.
[(i) Conforming Amendment.--Section 2 of the Act of August
16, 1989 (46 App. U.S.C. 1111c), is repealed.]
Section 9, Shipping Act of 1984
[46 U.S.C. App. 1708]
Sec. 1708. Controlled carriers
(a) Controlled Carrier Rates.--No controlled carrier subject
to this section may maintain rates or charges in its tariffs or
[service contracts filed with the Commission] service
contracts, or charge or assess rates, that are below a level
that is just and reasonable, nor may any such carrier establish
[or maintain] maintain, or enforce unjust or unreasonable
classifications, rules, or regulations in those tariffs or
service contracts. An unjust or unreasonable classification,
rule, or regulation means one that results or is likely to
result in the carriage or handling of cargo at rates or charges
that are below a just and reasonable level. The [Commission]
Board may, at any time after notice and hearing, [disapprove]
prohibit the publication or use of any rates, charges,
classifications, rules, or regulations that the controlled
carrier has failed to demonstrate to be just and reasonable. In
a proceeding under this subsection, the burden of proof is on
the controlled carrier to demonstrate that its rates, charges,
classifications, rules, or regulations are just and reasonable.
Rates, charges, classifications, rules, or regulations [filed
by a controlled carrier that have been rejected, suspended, or
disapproved by the Commission] that have been suspended or
prohibited by the [Commission] Board are void and their use is
unlawful.
(b) Rate Standards.--For the purpose of this section, in
determining whether rates, charges, classifications, rules, or
regulations by a controlled carrier are just and reasonable,
the [Commission] Board [may take into account appropriate
factors including, but not limited to, whether--] shall take
into account whether the rates or charges which have been
published or assessed or which would result from the pertinent
classifications, rules, or regulations are below a level which
is fully compensatory to the controlled carrier based upon that
carrier's actual costs or upon its constructive costs. For
purposes of the preceding sentence, the term `constructive
costs' means the costs of another carrier, other than a
controlled carrier, operating similar vessels and equipment in
the same or a similar trade. The [Commission] Board may also
take into account other appropriate factors, including but not
limited to, whether--
[(1) the rates or charges which have been filed or
which would result from the pertinent classifications,
rules, or regulations are below a level which is fully
compensatory to the controlled carrier based upon that
carrier's actual costs or upon its constructive costs,
which are hereby defined as the costs of another
carrier, other than a controlled carrier, operating
similar vessels and equipment in the same or a similar
trade;]
[(2) ] (1) the rates, charges, classifications,
rules, or regulations are the same as or similar to
those [filed] published or assessed or assessed by
other carriers in the same trade;
[(3) ] (2) the rates, charges, classifications,
rules, or regulations are required to assure movement
of particular cargo in the trade; or
[(4) ] (3) the rates, charges, classifications,
rules, or regulations are required to maintain
acceptable continuity, level, or quality of common
carrier service to or from affected ports.
(c) Effective Date of Rates.--Notwithstanding section 8(d) of
this Act [46 U.S.C. App. 1707(d)] and except for service
contracts, the rates, charges, classifications, rules, or
regulations of controlled carriers may not, without special
permission of the [Commission] Board, become effective sooner
than the 30th day after the date of [filing with the
Commission.] publication. Each controlled carrier shall, upon
the request of the [Commission] Board, file, within 20 days of
request (with respect to its existing or proposed rates,
charges, classifications, rules, or regulations), a statement
of justification that sufficiently details the controlled
carrier's need and purpose for such rates, charges,
classifications, rules, or regulations upon which the
[Commission] Board may reasonably base its determination of the
lawfulness thereof.
(d) [Disapproval of Rates.--] Prohibition of Rates._Within
120 days after the receipt of information requested by the
[Commission] Board under this section, the [Commission] Board
shall determine whether the rates, charges, classifications,
rules, or regulations of a controlled carrier may be unjust and
unreasonable. Whenever the [Commission] Board is of the opinion
that the rates, charges, classifications, rules, or regulations
[filed] published or assessed by a controlled carrier may be
unjust and unreasonable, the [Commission] Board [may issue]
shall issue an order to the controlled carrier to show cause
why those rates, charges, classifications, rules, or
regulations should not be [disapproved.] prohibited. Pending a
determination as to their lawfulness in such a proceeding, the
[Commission] Board may suspend the rates, charges,
classifications, rules, or regulations at any time before their
effective date. In the case of rates, charges, classifications,
rules, or regulations that have already become effective, the
[Commission] Board may, upon the issuance of an order to show
cause, suspend those rates, charges, classifications, rules, or
regulations on not less than [60] 30 days' notice to the
controlled carrier. No period of suspension under this
subsection may be greater than 180 days. Whenever the
[Commission] Board has suspended any rates, charges,
classifications, rules, or regulations under this subsection,
the affected controlled carrier may [file] publish new rates,
charges, classifications, rules, or regulations to take effect
immediately during the suspension period in lieu of the
suspended rates, charges, classifications, rules, or
regulations--except that the [Commission] Board may reject the
new rates, charges, classifications, rules, or regulations if
it is of the opinion that they are unjust and unreasonable.
(e) Presidential Review.--Concurrently with the publication
thereof, the [Commission] Board shall transmit to the President
each order of suspension or final order of [disapproval]
prohibition of rates, charges, classifications, rules, or
regulations of a controlled carrier subject to this section.
Within 10 days after the receipt or the effective date of the
[Commission] Board order, the President may request the
[Commission] Board in writing to stay the effect of the
[Commission's] Board's order if the President finds that the
stay is required for reasons of national defense or foreign
policy, which reasons shall be specified in the report.
Notwithstanding any other law, the [Commission] Board shall
immediately grant the request by the issuance of an order in
which the President's request shall be described. During any
such stay, the President shall, whenever practicable, attempt
to resolve the matter in controversy by negotiation with
representatives of the applicable foreign governments.
(f) Exceptions.--This section does not apply to--
(1) a controlled carrier of a state whose vessels are
entitled by a treaty of the United States to receive
national or most-favored-nation treatment; or
[(2) a controlled carrier of a state which, on the
effective date of this section [see the Effective date
of section note to this section], has subscribed to the
statement of shipping policy contained in note 1 to
annex A of the Code of Liberalization of Current
Invisible Operations, adopted by the Council of the
Organization for Economic Cooperation and Development;
[(3) rates, charges, classifications, rules, or
regulations of a controlled carrier in any particular
trade that are covered by an agreement effective under
section 6 of this Act [46 U.S.C. App. 1705], other than
an agreement in which all of the members are controlled
carriers not otherwise excluded from the provisions of
this subsection;
[(4) rates, charges, classifications, rules, or
regulations governing the transportation of cargo by a
controlled carrier between the country by whose
government it is owned or controlled, as defined herein
and the United States; or]
[(5) ] (2) a trade served exclusively by controlled
carriers.
Section 10, Shipping Act of 1984
[46 U.S.C. App. 1709]
1709. Prohibited acts
(a) In General.--No person may--
(1) knowingly and willfully, directly or indirectly,
by means of false billing, false classification, false
weighing, false report of weight, false measurement, or
by any other unjust or unfair device or means obtain or
attempt to obtain ocean transportation for property at
less than the rates or charges that would otherwise be
applicable;
(2) operate under an agreement required to be filed
under section 5 of this Act [46 U.S.C. App. 1704] that
has not become effective under section 6 [46 U.S.C.
App. 1705], or that has been rejected, disapproved, or
canceled; or
(3) operate under an agreement required to be filed
under section 5 of this Act [46 U.S.C. App. 1704]
except in accordance with the terms of the agreement or
any modifications made by the [Commission] Board to the
agreement.
(b) Common Carriers.--No common carrier, either alone or in
conjunction with any other person, directly or indirectly,
may--
[(1) charge, demand, collect, or receive greater,
less, or different compensation for the transportation
of property or for any service in connection therewith
than the rates and charges that are shown in its
tariffs or service contracts;
[(2) rebate, refund, or remit in any manner, or by
any device, any portion of its rates except in
accordance with its tariffs or service contracts;
[(3) extend or deny to any person any privilege,
concession, equipment, or facility except in accordance
with its tariffs or service contracts;]
[(4) ] (1) allow any person to obtain transportation
for property at less than the rates or charges
established by the carrier in its tariff or service
contract by means of false billing, false
classification, false weighing, false measurement, or
by any other unjust or unfair device or means;
(2) provide services, facilities, or privileges,
other than in accordance with the rates or terms in its
tariffs or service contracts in effect when the service
was provided;
[(5) ] (3) retaliate against any shipper by
refusing, or threatening to refuse, cargo space
accommodations when available, or resort to other
unfair or unjustly discriminatory methods because the
shipper has patronized another carrier, or has filed a
complaint, or for any other reason;
[(6) ] (4) [except for service contracts,] for
service pursuant to a tariff, engage in any unfair or
unjustly discriminatory practice in the matter of--
(A) [rates;] rates or charges;
(B) cargo classifications;
(C) cargo space accommodations or other
facilities, due regard being had for the proper
loading of the vessel and the available
tonnage;
(D) the loading and landing of freight; or
(E) the adjustment and settlement of claims;
(5) for service pursuant to a service contract,
engage in any unfair or unjustly discriminatory
practice in the matter of rates or charges with respect
to any location, port, class or type of shipper or
ocean transportation intermediary, or description of
traffic;
[(7) employ any fighting ship;]
(6) use a vessel in a particular trade to drive
another ocean common carrier out of that trade;
[(8) ] (7) offer or pay any deferred rebates;
[(9) use a loyalty contract, except in conformity
with the antitrust laws;
[(10) demand, charge, or collect any rate or charge
that is unjustly discriminatory between shippers or
ports;
[(11) except for service contracts, make or give any
undue or unreasonable preference or advantage to any
particular person, locality, or description of traffic
in any respect whatsoever;
[(12) subject any particular person, locality, or
description of traffic to an unreasonable refusal to
deal or any undue or unreasonable prejudice or
disadvantage in any respect whatsoever;
[(13) refuse to negotiate with a shippers'
association;]
(8) for service pursuant to a tariff, give any undue
or unreasonable preference or advantage or impose any
undue or unreasonable prejudice or disadvantage;
(9) for service pursuant to a service contract, give
any undue or unreasonable preference or advantage or
impose any undue or unreasonable prejudice or
disadvantage with respect to any location, port, class
or type of shipper or ocean transportation
intermediary, or description of traffic;
(10) unreasonably refuse to deal or negotiate;
[(14) ] (11) knowingly and willfully accept cargo
from or transport cargo for the account of [a non-
vessel-operating common carrier] an ocean
transportation intermediary that does not have a tariff
and a bond, insurance, or other surety as required by
[sections 8 and 23] sections 8 and 19 of this Act [46
U.S.C. App. 1707 and 1721];
[(15) ] (12) knowingly and willfully enter into a
service contract with [a non-vessel-operating common
carrier] an ocean transportation intermediary [or in
which a non-vessel-operating common carrier is listed
as an affiliate] that does not have a tariff and a
bond, insurance, or other surety as required by
[sections 8 and 23] sections 8 and 19 of this [Act;]
Act, [46 U.S.C. App. 1707 and 1721] or with an
affiliate of such ocean transportation intermediary; or
[(16) ] (13) knowingly disclose, offer, solicit, or
receive any information concerning the nature, kind,
quantity, destination, consignee, or routing of any
property tendered or delivered to a common carrier
without the consent of the shipper or consignee if that
information--
(A) may be used to the detriment or prejudice
of the shipper or consignee;
(B) may improperly disclose its business
transaction to a competitor; or
(C) may be used to the detriment or prejudice
of any common carrier.
Nothing in [paragraph (16) ] paragraph (13) shall be
construed to prevent providing such information, in
response to legal process, to the United States, the
[Commission] Board, or to an independent neutral body
operating within the scope of its authority to fulfill
the policing obligations of the parties to an agreement
effective under this Act. Nor shall it be prohibited
for any ocean common carrier that is a party to a
conference agreement approved under this Act, or any
receiver, trustee, lessee, agent, or employee of that
carrier, or any other person authorized by that carrier
to receive information, to give information to the
conference or any person, firm, corporation, or agency
designated by the conference, or to prevent the
conference or its designee from soliciting or receiving
information for the purpose of determining whether a
shipper or consignee has breached an agreement with the
conference or its member lines or for the purpose of
determining whether a member of the conference has
breached the conference agreement, or for the purpose
of compiling statistics of cargo movement, but the use
of such information for any other purpose prohibited by
this Act or any other Act is prohibited.
(c) Concerted Action.--No conference or group of two or more
common carriers may--
(1) boycott or take any other concerted action
resulting in an unreasonable refusal to deal;
(2) engage in conduct that unreasonably restricts the
use of intermodal services or technological
innovations;
(3) engage in any predatory practice designed to
eliminate the participation, or deny the entry, in a
particular trade of acommon carrier not a member of the
conference, a group of common carriers, an ocean tramp, or a bulk
carrier;
(4) negotiate with a nonocean carrier or group of
nonocean carriers (for example, truck, rail, or air
operators) on any matter relating to rates or services
provided to ocean common carriers within the United
States by those nonocean carriers: Provided, That this
paragraph does not prohibit the setting and publishing
of a joint through rate by a conference, joint venture,
or an association of ocean common carriers;
(5) deny in the export foreign commerce of the United
States compensation to an ocean [freight forwarder]
transportation intermediary, as defined by section
3(17)(A) of this Act, or limit that compensation to
less than a reasonable amount; or
(6) allocate shippers among specific carriers that
are parties to the agreement or prohibit a carrier that
is a party to the agreement from soliciting cargo from
a particular shipper, except as otherwise required by
the law of the United States or the importing or
exporting country, or as agreed to by a shipper in a
service contract.
(d) Common Carriers, Ocean [Freight Forwarders,]
Transportation Intermediaries, and Marine Terminal Operators.--
(1) No common carrier, ocean [freight forwarder,]
transportation intermediary, or marine terminal
operator may fail to establish, observe, and enforce
just and reasonable regulations and practices relating
to or connected with receiving, handling, storing, or
delivering property.
(2) No marine terminal operator may agree with
another marine terminal operator or with a common
carrier to boycott, or unreasonably discriminate in the
provision of terminal services to, any common carrier
or ocean tramp.
(3) The prohibitions in [subsection (b) (11), (12),
and (16)] subsections (b) (8), (9), (10), and (13) of
this section apply to marine terminal operators.
(4) The prohibition in subsection (b)(13) of this
section applies to ocean transportation intermediaries,
as defined in section 3(17)(A) of this Act.
(e) Joint Ventures.--For purposes of this section, a joint
venture or consortium of two or more common carriers but
operated as a single entity shall be treated as a single common
carrier.
Section 11, Shipping Act of 1984
[46 U.S.C. App. 1710]
Sec. 1710. Complaints, investigations, reports, and reparations
[Section 11, Shipping Act of 1984]
(a) Filing of Complaints.--Any person may file with the
[Commission] Board a sworn complaint alleging a violation of
this Act, other than section 6(g) [46 U.S.C. App. 1705(g)], and
may seek reparation for any injury caused to the complainant by
that violation.
(b) Satisfaction or Investigation of Complaints.--The
[Commission] Board shall furnish a copy of a complaint filed
pursuant to subsection (a) of this section to the person named
therein who shall, within a reasonable time specified by the
[Commission] Board, satisfy the complaint or answer it in
writing. If the complaint is not satisfied, the [Commission]
Board shall investigate it in an appropriate manner and make an
appropriate order.
(c) [Commission] Board Investigations.--The [Commission]
Board, upon complaint or upon its own motion, may investigate
any conduct or agreement that it believes may be in violation
of this Act. Except in the case of an injunction granted under
subsection (h) of this section, each agreement under
investigation under this section remains in effect until the
[Commission] Board issues an order under this subsection. The
[Commission] Board may by order disapprove, cancel, or modify
any agreement filed under section 5(a) of this Act [46 U.S.C.
App. 1704(a)] that operates in violation of this Act. With
respect to agreements inconsistent with section 6(g) of this
Act [46 U.S.C. App. 1705(g)], the [Commission's] Board's sole
remedy is under section 6(h) [46 U.S.C. App. 1705(h)].
(d) Conduct of Investigation.--Within 10 days after the
initiation of a proceeding under this section, the [Commission]
Board shall set a date on or before which its final decision
will be issued. This date may be extended for good cause by
order of the [Commission] Board.
(e) Undue Delays.--If, within the time period specified in
subsection (d), the [Commission] Board determines that it is
unable to issue a final decision because of undue delays caused
by a party to the proceedings, the [Commission] Board may
impose sanctions, including entering a decision adverse to the
delaying party.
(f) Reports.--The [Commission] Board shall make a written
report of every investigation made under this Act in which a
hearing was held stating its conclusions, decisions, findings
of fact, and order. A copy of this report shall be furnished to
all parties. The [Commission] Board shall publish each report
for public information, and the published report shall be
competent evidence in all courts of the United States.
(g) Reparations.--For any complaint filed within 3 years
after the cause of action accrued, the [Commission] Board
shall, upon petition of the complainant and after notice and
hearing, direct payment of reparations to the complainant for
actual injury (which, for purposes of this subsection, also
includes the loss of interest at commercial rates compounded
from the date of injury) caused by a violation of this Act plus
reasonable attorney's fees. Upon a showing that the injury was
caused by activity that is prohibited by [section 10(b) (5) or
(7) [46 U.S.C. App. 1709(b) (5), (7)]] section 10(b) (3) or (6)
or section 10(c) (1) or (3) of this Act [46 U.S.C. App.
1709(c) (1), (3)], or that violates section 10(a) (2) or (3)
[46 U.S.C. App. 1709(a) (2), (3)], the [Commission] Board may
direct the payment of additional amounts; but the total
recovery of a complainant may not exceed twice the amount of
the actual injury. In the case of injury caused by an activity
that is prohibited by [section 10(b) (6) (A) or (B)] section
10(b)(4) (A) or (B) of this Act [46 U.S.C. App. 1709(b)(6)
(A), (B)], the amount of the injury shall be the difference
between the rate paid by the injured shipper and the most
favorable rate paid by another shipper.
(h) Injunction.--
(1) In connection with any investigation conducted
under this section, the [Commission] Board may bring
suit in a district court of the United States to enjoin
conduct in violation of this Act. Upon a showing that
standards for granting injunctive relief by courts of
equity are met and after notice to the defendant, the
court may grant a temporary restraining order or
preliminary injunction for a period not to exceed 10
days after the [Commission] Board has issued an order
disposing of the issues under investigation. Any such
suit shall be brought in a district in which the
defendant resides or transacts business.
(2) After filing a complaint with the [Commission]
Board under subsection (a), the complainant may file
suit in a district court of the United States to enjoin
conduct in violation of this Act. Upon a showing that
standards for granting injunctive relief by courts of
equity are met and after notice to the defendant, the
court may grant a temporary restraining order or
preliminary injunction for a period not to exceed 10
days after the [Commission] Board has issued an order
disposing of the complaint. Any such suit shall be
brought in the district in which the defendant has been
sued by the [Commission] Board under paragraph (1); or,
if no suit has been filed, in a district in which the
defendant resides or transacts business. A defendant
that prevails in a suit under this paragraph shall be
allowed reasonable attorney's fees to be assessed and
collected as part of the costs of the suit.
Section 10002, Foreign Shipping Practices Act of 1988
[46 U.S.C. App. 1710a]
Sec. 1710a. Foreign laws and practices
(a) Definitions.--For purposes of this section--
(1) ``common carrier'', ``marine terminal operator'',
[``non-vessel-operating common carrier'',] ``ocean
transportation intermediary'', ``ocean common
carrier'', ``person'', ``shipper'', ``shippers'
association'', and ``United States'' have the meanings
given each such term, respectively, in section 3 of the
Shipping Act of 1984 (46 App. U.S.C. 1702) ;
(2) ``foreign carrier'' means an ocean common carrier
a majority of whose vessels are documented under the
laws of a country other than the United States;
(3) ``maritime services'' means port-to-port carriage
of cargo by the vessels operated by ocean common
carriers;
(4) ``maritime-related services'' means intermodal
operations, terminal operations, cargo solicitation,
[forwarding and] agency services, [non-vessel-operating
common carrier] ocean transportation intermediary
services and operations, and all other activities and
services integral to total transportation systems of
ocean common carriers and their foreign domiciled
affiliates on their own and others' behalf;
(5) ``United States carrier'' means an ocean common
carrier which operates vessels documented under the
laws of the United States; and
(6) ``United States oceanborne trade'' means the
carriage of cargo between the United States and a
foreign country, whether direct or indirect, by an
ocean common carrier.
(b) Authority to Conduct Investigations.--The [Federal
Maritime Commission] Intermodal Transportation Board shall
investigate whether any laws, rules, regulations, policies, or
practices of foreign governments, or any practices of foreign
carriers or other persons providing maritime or maritime-
related services in a foreign country result in the existence
of conditions that--
(1) adversely affect the operations of United States
carriers in United States oceanborne trade; and
(2) do not exist for foreign carriers of that country
in the United States under the laws of the United
States or as a result of acts of United States carriers
or other persons providing maritime or maritime-related
services in the United States.
(c) Investigations.--
(1) Investigations under subsection (b) of this
section may be initiated by the [Commission] Board on
its own motion or on the petition of any person,
including any common carrier, shipper, shippers'
association, ocean [freight forwarder,] transportation
intermediary, or marine terminal operator, or any
branch, department, agency, or other component of the
Government of the United States.
(2) The [Commission] Board shall complete any such
investigation and render a decision within 120 days
after it is initiated, except that the [Commission]
Board may extend such 120-day period for an additional
90 days if the [Commission] Board is unable to obtain
sufficient information to determine whether a condition
specified in subsection (b) of this section exists. Any
notice providing such an extension shall clearly state
the reasons for such extension.
(d) Information Requests.--
(1) In order to further the purposes of subsection
(b) of this section, the [Commission] Board may, by
order, require any person (including any common
carrier, shipper, shippers' association, ocean [freight
forwarder,] transportation intermediary or marine
terminal operator, or any officer, receiver, trustee,
lessee, agent or employee thereof) to file with the
[Commission] Board any periodic or special report,
answers to questions, documentary material, or other
information which the [Commission] Board considers
necessary or appropriate. The [Commission] Board may
require that the response to any such order shall be
made under oath. Such response shall be furnished in
the form and within the time prescribed by the
[Commission] Board.
(2) In an investigation under subsection (b) of this
section, the [Commission] Board may issue subpoenas to
compel the attendance and testimony of witnesses and
the production of records or other evidence.
(3) Notwithstanding any other provision of law, the
[Commission] Board may, in its discretion, determine
that any information submitted to it in response to a
request under this subsection, or otherwise, shall not
be disclosed to the public.
(e) Action Against Foreign Carriers.--
(1) Whenever, after notice and opportunity for
comment or hearing, the [Commission] Board determines
that the conditions specified in subsection (b) of this
section exist, the [Commission] Board shall take such
action as it considers necessary and appropriate
against any foreign carrier that is a contributing
cause to, or whose government is a contributing cause
to, such conditions, in order to offset such
conditions. Such action may include--
(A) limitations on sailings to and from
United States ports or on the amount or type of
cargo carried;
(B) suspension, in whole or in part, of any
or all tariffs [filed with the Commission,] and
service contracts, including the right of an
ocean common carrier to use any or all tariffs
and service contracts of conferences in United
States trades of which it is a member for such
period as the [Commission] Board specifies;
(C) suspension, in whole or in part, of the
right of an ocean common carrier to operate
under any agreement filed with the [Commission]
Board, including agreements authorizing
preferential treatment at terminals,
preferential terminal leases, space chartering,
or pooling of cargo or revenues with other
ocean common carriers; and
(D) a fee, not to exceed $1,000,000 per
voyage.
(2) The [Commission] Board may consult with, seek the
cooperation of, or make recommendations to other
appropriate Government agencies prior to taking any
action under this subsection.
(3) Before a determination under this subsection
becomes effective or a request is made under subsection
(f) of this section, the determination shall be
submitted immediately to the President who may, within
10 days after receiving such determination, disapprove
the determination in writing, setting forth the reasons
for the disapproval, if the President finds that
disapproval is required for reasons of the national
defense or the foreign policy of the United States.
(f) Actions Upon Request of the [Commission] Board.--Whenever
the conditions specified in subsection (b) of this section are
found by the [Commission] Board to exist, upon the request of
the [Commission] Board--
(1) the collector of customs at any port or place of
destination in the United States shall refuse the
clearance required by section 4197 of the Revised
Statutes (46 App. U.S.C. 91) to any vessel of a foreign
carrier that is identified by the [Commission] Board
under subsection (e) of this section; and
(2) the Secretary of the department in which the
Coast Guard is operating shall deny entry, for purposes
of oceanborne trade, of any vessel of a foreign carrier
that is identified by the [Commission] Board under
subsection (e) of this section to any port or place in
the United States or the navigable waters of the United
States, or shall detain any such vessel at the port or
place in the United States from which it is about to
depart for any other port or place in the United
States.
(g) Report.--The [Commission] Board shall include in its
annual report to Congress--
(1) a list of the twenty foreign countries which
generated the largest volume of oceanborne liner cargo
for the most recent calendar year in bilateral trade
with the United States;
(2) an analysis of conditions described in subsection
(b) of this section being investigated or found to
exist in foreign countries;
(3) any actions being taken by the [Commission] Board
to offset such conditions;
(4) any recommendations for additional legislation to
offset such conditions; and
(5) a list of petitions filed under subsection (c) of
this section that the [Commission] Board rejected, and
the reasons for each such rejection.
(h) The actions against foreign carriers authorized in
subsections (e) and (f) of this section may be used in the
administration and enforcement of section 13[(b)(5)](b)(6) of
the Shipping Act of 1984 (46 App. U.S.C. 1712[(b)(5)](b)(6)) or
section 19(1)(b) of the Merchant Marine Act, 1920 (46 App.
U.S.C. 876).
(i) Any rule, regulation or final order of the [Commission]
Board issued under this section shall be reviewable exclusively
in the same forum and in the same manner as provided in section
[2342(3)(B)] 2342(5)(B) of title 28, United States Code.
Section 13, Shipping Act of 1984
[46 U.S.C. App. 1712]
Sec. 1712. Penalties
(a) Assessment of Penalty.--Whoever violates a provision of
this Act, a regulation issued thereunder, or a [Commission]
Board order is liable to the United States for a civil penalty.
The amount of the civil penalty, unless otherwise provided in
this Act, may not exceed $5,000 for each violation unless the
violation was willfully and knowingly committed, in which case
the amount of the civil penalty may not exceed $25,000 for each
violation. Each day of a continuing violation constitutes a
separate offense. The amount of any penalty imposed upon a
common carrier under this subsection shall constitute a lien
upon the vessels of the common carrier and any such vessel may
be libeled therefore in the district court of the United States
for the district in which it may be found.
(b) Additional Penalties.--
(1) For a violation of [section 10(b) (1), (2), (3),
(4), or (8)] section 10(b) (1), (2), or (7) of this
Act [46 U.S.C. App. 1709(b) (1), (2), (7)], the
[Commission] Board may suspend any or all tariffs of
the common carrier, or that common carrier's right to
use any or all tariffs of conferences of which it is a
member, for a period not to exceed 12 months.
(2) For failure to supply information ordered to be
produced or compelled by subpena under section 12 of
this Act [46U.S.C. App. 1711], the [Commission] Board
may, after notice and an opportunity for hearing, suspend any or all
tariffs of a common carrier, or that common carrier's right to use any
or all tariffs of conferences of which it is a member.
(3) A common carrier that accepts or handles cargo
for carriage under a tariff that has been suspended or
after its right to utilize that tariff has been
suspended is subject to a civil penalty of not more
than $50,000 for each shipment.
(4) If the [Commission] Board finds, after notice and
an opportunity for a hearing, that a common carrier has
failed to supply information ordered to be produced or
compelled by subpoena under section 12 of this Act, the
[Commission] Board may request that the Secretary of
the Treasury refuse or revoke any clearance required
for a vessel operated by that common carrier. Upon
request by the [Commission] Board, the Secretary of the
Treasury shall, with respect to the vessel concerned,
refuse or revoke any clearance required by section 4197
of the Revised Statutes of the United States (46 U.S.C.
App. 91).
[(4)] (5) If, in defense of its failure to comply
with a subpena or discovery order, a common carrier
alleges that documents or information located in a
foreign country cannot be produced because of the laws
of that country, the [Commission] Board shall
immediately notify the Secretary of State of the
failure to comply and of the allegation relating to
foreign laws. Upon receiving the notification, the
Secretary of State shall promptly consult with the
government of the nation within which the documents or
information are alleged to be located for the purpose
of assisting the [Commission] Board in obtaining the
documents or information sought.
[(5)] (6) If, after notice and hearing, the
[Commission] Board finds that the action of a common
carrier, acting alone or in concert with any person, or
a foreign government has unduly impaired access of a
vessel documented under the laws of the United States
to ocean trade between foreign ports, the [Commission]
Board shall take action that it finds appropriate,
including the imposition of any of the penalties
authorized under [paragraphs (1), (2), and (3)]
paragraphs (1), (2), (3), and (4) of this subsection.
[(6)] (7) Before an order under this subsection
becomes effective, it shall be immediately submitted to
the President who may, within 10 days after receiving
it, disapprove the order if the President finds that
disapproval is required for reasons of the national
defense or the foreign policy of the United States.
(c) Assessment Procedures.--Until a matter is referred to the
Attorney General, the [Commission] Board may, after notice and
an opportunity for hearing, assess each civil penalty provided
for in this Act. In determining the amount of the penalty, the
[Commission] Board shall take into account the nature,
circumstances, extent, and gravity of the violation committed
and, with respect to the violator, the degree of culpability,
history of prior offenses, ability to pay, and such other
matters as justice may require. The [Commission] Board may
compromise, modify, or remit, with or without conditions, any
civil penalty.
(d) Review of Civil Penalty.--A person against whom a civil
penalty is assessed under this section may obtain review
thereof under chapter 158 of title 28, United States Code [28
U.S.C. 2341 et seq.].
(e) Failure To Pay Assessment.--If a person fails to pay an
assessment of a civil penalty after it has become final or
after the appropriate court has entered final judgment in favor
of the [Commission] Board, the Attorney General at the request
of the [Commission] Board may seek to recover the amount
assessed in an appropriate district court of the United States.
In such an action, the court shall enforce the [Commission's]
Board's order unless it finds that the order was not regularly
made or duly issued.
(f) Limitations.--
(1) No penalty may be imposed on any person for
conspiracy to violate section 10(a)(1), (b)(1), [or
(b)(4)] or (b)(2) of this Act [46 U.S.C. App.
1709(a)(1), [(b)(1), (4)] (b)(1), (2)], or to defraud
the [Commission] Board by concealment of such a
violation.
(2) Each proceeding to assess a civil penalty under
this section shall be commenced within 5 years from the
date the violation occurred.
Section 15, Shipping Act of 1984
46 U.S.C. App. 1714]
Sec. 1714. Reports [and certificates]
[(a) Reports.--]The [Commission] Board may require any common
carrier, or any officer, receiver, trustee, lessee, agent, or
employee thereof, to file with it any periodical or special
report or any account, record, rate, or charge, or memorandum
of any facts and transactions appertaining to the business of
that common carrier. The report, account, record, rate, charge,
or memorandum shall be made under oath whenever the
[Commission] Board so requires, and shall be furnished in the
form and within the time prescribed by the [Commission] Board
Conference minutes required to be filed with the [Commission]
Board under this section shall not be released to third parties
or published by the [Commission] Board.
[(b) Certification.--The Commission shall require the chief
executive officer of each common carrier and, to the extent it
deems feasible, may require any shipper, shippers' association,
marine terminal operator, ocean freight forwarder, or broker to
file a periodic written certification made under oath with the
Commission attesting to--
[(1) a policy prohibiting the payment, solicitation,
or receipt of any rebate that is unlawful under the
provisions of this Act;
[(2) the fact that this policy has been promulgated
recently to each owner, officer, employee, and agent
thereof;
[(3) the details of the efforts made within the
company or otherwise to prevent or correct illegal
rebating; and
[(4) a policy of full cooperation with the Commission
in its efforts to end those illegal practices.
[Whoever fails to file a certificate required by the Commission
under this subsection is liable to the United States for a
civil penalty of not more than $5,000 for each day the
violation continues.]
Section 16, Shipping Act of 1984
[46 U.S.C. App. 1715]
Sec. 1715. Exemptions
The [Commission] Board, upon application or on its own
motion, may by order or rule exempt for the future any class of
agreements between persons subject to this Act or any specified
activity of those persons from any requirement of this Act if
it finds that the exemption will not [substantially impair
effective regulation by the Commission, be unjustly
discriminatory, result in a substantial reduction in
competition, or be detrimental to commerce.] result in a
substantial reduction in competition or be detrimental to
commerce. The [Commission] Board may attach conditions to any
exemption and may, by order, revoke any exemption. No order or
rule of exemption or revocation of exemption may be issued
unless opportunity for hearing has been afforded interested
persons and departments and agencies of the United States.
Section 18, Shipping Act of 1984
Sec. 46 U.S.C. App. 1717
[Sec. 1717. Agency reports and Advisory Commission]
[(a) Collection of Data.--For a period of 5 years following
the enactment of this Act [enacted Mar. 20, 1984], the
Commission shall collect and analyze information concerning the
impact of this Act upon the international ocean shipping
industry, including data on:
[(1) increases or decreases in the level of tariffs;
[(2) changes in the frequency or type of common
carrier services available to specific ports or
geographic regions;
[(3) the number and strength of independent carriers
in various trades; and
[(4) the length of time, frequency, and cost of major
types of regulatory proceedings before the Commission.
[(b) Consultation With Other Departments and Agencies.--The
Commission shall consult with the Department of Transportation,
the Department of Justice, and the Federal Trade Commission
annually concerning data collection. The Department of
Transportation, the Department of Justice, and the Federal
Trade Commission shall at all times have access to the data
collected under this section to enable them to provide comments
concerning data collection.
[(c) Agency Reports.--
[(1) Within 6 months after expiration of the 5-year
period specified in subsection (a), the Commission
shall report the information, with an analysis of the
impact of this Act, to Congress, to the Advisory
Commission on Conferences in OceanShipping established
in subsection (d), and to the Department of Transportation, the
Department of Justice, and the Federal Trade Commission.
[(2) Within 60 days after the Commission submits its
report, the Department of Transportation, the
Department of Justice, and the Federal Trade Commission
shall furnish an analysis of the impact of this Act to
Congress and to the Advisory Commission on Conferences
in Ocean Shipping.
[(3) The reports required by this subsection shall
specifically address the following topics:
[(A) the advisability of adopting a system of
tariffs based on volume and mass of shipment;
[(B) the need for antitrust immunity for
ports and marine terminals; and
[(C) the continuing need for the statutory
requirement that tariffs be filed with and
enforced by the Commission.
[(d) Establishment and Composition of Advisory Commission.--
[(1) Effective 5\1/2\ years after the date of
enactment of this Act [enacted Mar. 20, 1984], there is
established the Advisory Commission on Conferences in
Ocean Shipping (hereinafter referred to as the
``Advisory Commission'') .
[(2) The Advisory Commission shall be composed of 17
members as follows:
[(A) a cabinet level official appointed by
the President;
[(B) 4 members from the United States Senate
appointed by the President pro tempore of the
Senate, 2 from the membership of the Committee
on Commerce, Science, and Transportation and 2
from the membership of the Committee on the
Judiciary;
[(C) 4 members from the United States House
of Representatives appointed by the Speaker of
the House, 2 from the membership of the
Committee on Merchant Marine and Fisheries, and
2 from the membership of the Committee on the
Judiciary; and
[(D) 8 members from the private sector
appointed by the President.
[(3) The President shall designate the chairman of
the Advisory Commission.
[(4) The term of office for members shall be for the
term of the Advisory Commission.
[(5) A vacancy in the Advisory Commission shall not
affect its powers, and shall be filled in the same
manner in which the original appointment was made.
[(6) Nine members of the Advisory Commission shall
constitute a quorum, but the Advisory Commission may
permit as few as 2 members to hold hearings.
[(e) Compensation of Members of the Advisory Commission.--
[(1) Officials of the United States Government and
Members of Congress who are members of the Advisory
Commission shall serve without compensation in addition
to that received for their services as officials and
Members, but they shall be reimbursed for reasonable
travel, subsistence, and other necessary expenses
incurred by them in the performance of the duties
vested in the Advisory Commission.
[(2) Members of the Advisory Commission appointed
from the private sector shall each receive compensation
not exceeding the maximum per diem rate of pay for
grade 18 of the General Schedule under section 5332 of
title 5, United States Code [5 U.S.C. 5332], when
engaged in the performance of the duties vested in the
Advisory Commission, plus reimbursement for reasonable
travel, subsistence, and other necessary expenses
incurred by them in the performance of those duties,
notwithstanding the limitations in sections 5701
through 5733 of title 5, United States Code [5 U.S.C.
5701-5733].
[(3) Members of the Advisory Commission appointed
from the private sector are not subject to section 208
of title 18, United States Code [18 U.S.C. 208]. Before
commencing service, these members shall file with the
Advisory Commission a statement disclosing their
financial interests and business and former
relationships involving or relating to ocean
transportation. These statements shall be available for
public inspection at the Advisory Commission's offices.
[(f) Advisory Commission Functions.--The Advisory Commission
shall conduct a comprehensive study of, and make
recommendations concerning, conferences in ocean shipping. The
study shall specifically address whether the Nation would be
best served by prohibiting conferences, or by closed or open
conferences.
[(g) Powers of the Advisory Commission.--
[(1) The Advisory Commission may, for the purpose of
carrying out its functions, hold such hearings and sit
and act at such times and places, administer such
oaths, and require, by subpena or otherwise, the
attendance and testimony of such witnesses, and the
production of such books, records, correspondence,
memorandums, papers, and documents as the Advisory
Commission may deem advisable. Subpenas may be issued
to any person within the jurisdiction of the United
States courts, under the signature of the chairman, or
any duly designated member, and may be served by any
person designated by the chairman, or that member. In
case of contumacy by, or refusal to obey a subpena to,
any person, the Advisory Commission may advise the
Attorney General who shall invoke the aid of any court
of the United States within the jurisdiction of which
the Advisory Commission's proceedings are carried on,
or where that person resides or carries on business, in
requiring the attendance and testimony of witnesses and
the production of books, papers, and documents; and the
court may issue an order requiring that person to
appear before the Advisory Commission, there to produce
records, if so ordered, or to give testimony. A failure
to obey such an order of the court may be punished by
the court as a contempt thereof. All process in any
such case may be served in the judicial district
whereof the person is an inhabitant or may be found.
[(2) Each department, agency, and instrumentality of
the executive branch of the Government, including
independent agencies, shall furnish to the Advisory
Commission, upon request made by the chairman, such
information as the Advisory Commission deems necessary
to carry out its functions.
[(3) Upon request of the chairman, the Department of
Justice, the Department of Transportation, the Federal
Maritime Commission, and the Federal Trade Commission
shall detail staff personnel as necessary to assist the
Advisory Commission.
[(4) The chairman may rent office space for the
Advisory Commission, may utilize the services and
facilities of other Federal agencies with or without
reimbursement, may accept voluntary services
notwithstanding section 1342 of title 31, United States
Code [31 U.S.C. 1342], may accept, hold, and administer
gifts from other Federal agencies, and may enter into
contracts with any public or private person or entity
for reports, research, or surveys in furtherance of the
work of the Advisory Commission.
[(h) Final Report.--The Advisory Commission shall, within 1
year after all of its members have been duly appointed, submit
to the President and to the Congress a final report containing
a statement of the findings and conclusions of the Advisory
Commission resulting from the study undertaken under subsection
(f) , including recommendations for such administrative,
judicial, and legislative action as it deems advisable. Each
recommendation made by the Advisory Commission to the President
and to the Congress must have the majority vote of the Advisory
Commission present and voting.
[(i) Expiration of the Commission.--The Advisory Commission
shall cease to exist 30 days after the submission of its final
report.
[(j) Authorization of Appropriation.--There is authorized to
be appropriated $500,000 to carry out the activities of the
Advisory Commission.]
Section 19, Shipping Act of 1984
[46 U.S.C. App. 1718]
Sec. 1718. Ocean [freight forwarders] transportation intermediaries
[(a) License.--No person may act as an ocean freight
forwarder unless that person holds a license issued by the
Commission. The Commission shall issue a forwarder's license to
any person that--
[(1) the Commission determines to be qualified by
experience and character to render forwarding services;
and
[(2) furnishes a bond in a form and amount determined
by the Commission to insure financial responsibility
that is issued by a surety company found acceptable by
the Secretary of the Treasury.]
(a) License._No person in the United States may act as an
ocean transportation intermediary unless that person holds a
license issued by the [Commission] Board. The [Commission]
Board shall issue an intermediary's license to any person that
the [Commission] Board determines to be qualified by experience
and character to act as an ocean transportation intermediary.
(b) Financial Responsibility._
(1) No person may act as an ocean transportation
intermediary unless that person furnishes a bond, proof
of insurance, or other surety in a form and amount
determined by the [Commission] Board to insure
financial responsibility that is issued by a surety
company found acceptable by the Secretary of the
Treasury.
(2) A bond, insurance, or other surety obtained
pursuant to this section--
(A) shall be available to pay any judgment
for damages against an ocean transportation
intermediary arising from its transportation-
related activities described in section 3(17)
of this Act, or any order for reparation issued
pursuant to section 11 or 14 of this Act, or
any penalty assessed pursuant to section 13 of
this Act; and
(B) may be available to pay any claim against
an ocean transportation intermediary arising
from its transportation-related activities
described in section 3(17) of this Act with the
consent of the insured ocean transportation
intermediary, or when the claim is deemed valid
by the surety company after the ocean
transportation intermediary has failed to
respond to adequate notice to address the
validity of the claim.
(3) An ocean transportation intermediary not
domiciled in the United States shall designate a
resident agent in the United States for receipt of
service of judicial and administrative process,
including subpoenas.
[(b)] (c) Suspension or Revocation.--The [Commission] Board
shall, after notice and hearing, suspend of [or] revoke a
license if it finds that the ocean [freight forwarder]
transportation intermediary is not qualified to render
[forwarding] intermediary services or that it willfully failed
to comply with a provision of this Act or with a lawful order,
rule, or regulation of the [Commission] Board. The [Commission]
Board may also revoke an intermediary's license for failure to
maintain [a bond in accordance with subsection (a)(2).] a
bond, proof of insurance, or other surety in accordance with
subsection (b) (1).
[(c)] (d) Exception.--A person whose primary business is the
sale of merchandise may forward shipments of the merchandise
for its own account without a license.
[(d)] (e) Compensation of [Forwarders] Intermediaries by
Carriers.--
(1) A common carrier may compensate an ocean [freight
forwarder] transportation intermediary, as defined in
section 3(17)(A) of this Act, in connection with a
shipment dispatched on behalf of others only when the
ocean [freight forwarder] transportation intermediary
has certified in writing that it holds a valid
[license] license, if required by subsection (a), and
has performed the following services:
(A) Engaged, booked, secured, reserved, or
contracted directly with the carrier or its
agent for space aboard a vessel or confirmed
the availability of that space.
(B) Prepared and processed the ocean bill of
lading, dock receipt, or other similar document
with respect to the shipment.
(2) No common carrier may pay compensation for
services described in paragraph (1) more than once on
the same shipment.
[(3) No compensation may be paid to an ocean freight
forwarder except in accordance with the tariff
requirements of this Act.]
[(4)] (3) No ocean [freight forwarder] transportation
intermediary may receive compensation from a common
carrier with respect to a shipment in which the
[forwarder] intermediary has a direct or indirect
beneficial interest nor shall a common carrier
knowingly pay compensation on that shipment.
(4) No conference or group of 2 or more ocean common
carriers in the foreign commerce of the United States
that is authorized to agree upon the level of
compensation paid to an ocean transportation
intermediary, as defined in section 3(17) (A) of this
Act, may--
(A) deny to any member of the conference or
group the right, upon notice of not more than 5
calendar days, to take independent action on
any level of compensation paid to an ocean
transportation intermediary, as so defined; or
(B) agree to limit the payment of
compensation to an ocean transportation
intermediary, as so defined, to less than 1.25
percent of the aggregate of all rates and
charges which are applicable under a tariff and
which are assessed against the cargo on which
the intermediary services are provided.
Section 20, Shipping Act of 1984
[46 U.S.C. App. 1719]
Sec. 1719. Contracts, agreements, and licenses under prior shipping
legislation
(a)--(c) [Omitted]
[(d) Effects on certain agreements and contracts.--All
agreements, contracts, modifications, and exemptions previously
approved or licenses previously issued by the [Commission]
Board shall continue in force and effect as if approved or
issued under this Act; and all new agreements, contracts, and
modifications to existing, pending, or new contracts or
agreements shall be considered under this Act.]
(d) Effects on Certain Agreements and Contracts._All
agreements, contracts, modifications, and exemptions previously
issued, approved, or effective under the Shipping Act, 1916, or
the Shipping Act of 1984 shall continue in force and effect as
if issued or effective under this Act, as amended by the Ocean
Shipping Reform Act of 1997, and all new agreements, contracts,
and modifications to existing, pending, or new contracts or
agreements shall be considered under this Act, as amended by
the Ocean Shipping Reform Act of 1997.
(e) Savings Provisions.--
(1) Each service contract entered into by a shipper
and an ocean common carrier or conference before the
date of enactment of this Act [enacted Mar. 20, 1984]
may remain in full force and effect and need not comply
with the requirements of section 8(c) of this Act [46
U.S.C. App. 1707(c)] until 15 months after the date of
enactment of this Act [enacted Mar. 20, 1984].
(2) This Act and the amendments made by it shall not
affect any suit--
(A) filed before the date of enactment of
this Act [enacted Mar. 20, 1984], or
(B) with respect to claims arising out of
conduct engaged in before the date of enactment
of this Act [enacted Mar. 20, 1984] filed
within 1 year after the date of enactment of
this Act [enacted Mar. 20, 1984].
(3) The Ocean Shipping Reform Act of 1997 shall not
affect any suit--
(A) filed before the effective date of that
Act; or
(B) with respect to claims arising out of
conduct engaged in before the effective date of
that Act filed within 1 year after the
effective date of that Act.
(4) Regulations issued by the Federal Maritime
Commission shall remain in force and effect where not
inconsistent with this Act, as amended by the Ocean
Shipping Reform Act of 1997.
Section 23, Shipping Act of 1984
[46 U.S.C. App. 1721]
[Sec. 1721. Surety for non-vessel-operating common carriers [Section
23, Shipping Act of 1984]
[(a) Surety.--Each non-vessel-operating common carrier shall
furnish to the Commission a bond, proof of insurance, or such
other surety, as the Commission may require, in a form and an
amount determined by the Commission to be satisfactory to
insure the financial responsibility of that carrier. Any bond
submitted pursuant to this section shall be issued by a surety
company found acceptable by the Secretary of the Treasury.
[(b) Claims against surety.--A bond, insurance, or other
surety obtained pursuant to this section shall be available to
pay any judgment for damages against a non-vessel-operating
common carrier arising from its transportation-related
activities under this Act or order for reparations issued
pursuant to section 11 of this Act [46 U.S.C. App. 1710] or any
penalty assessed against a non-vessel-operating carrier
pursuant to section 13 of this Act [46 U.S.C. App. 1712].
[(c) Resident agent.--A non-vessel-operating common carrier
not domiciled in the United States shall designate a resident
agent in the United States for receipt of service of judicial
and administrative process, including subpoenas.
[(d) Tariffs.--The Commission may suspend or cancel any or
all tariffs of a non-vessel-operating common carrier for
failure to maintain the bond, insurance, or other surety
required by subsection (a) of this section or to designate an
agent as required by subsection (c) of this section or for a
violation of section 10(a) (1) of this Act [46 U.S.C. App.
1709(a) (1) ].]
TITLE 49. TRANSPORTATION
SUBTITLE I. DEPARTMENT OF TRANSPORTATION
CHAPTER 7. [SURFACE] INTERMODAL TRANSPORTATION BOARD
SUBCHAPTER I. ESTABLISHMENT
Sec. 701. Establishment of Board
(a) Establishment.--There is hereby established within the
Department of Transportation the [Surface] Intermodal
Transportation Board.
(b) Membership.--
(1) The Board shall consist of [3 members,] 5
members, to be appointed by the President, by and with
the advice and consent of the Senate. Not more than [2
members] 3 members may be appointed from the same
political party.
[(2) At any given time, at least 2 members of the
Board shall be individuals with professional standing
and demonstrated knowledge in the fields of
transportation or transportation regulation, and at
least one member shall be an individual with
professional or business experience (including
agriculture) in the private sector.]
(2) At any given time, at least 3 members of the
Board shall be individuals with professional standing
and demonstrated knowledge in the fields of surface or
maritime transportation or their regulation, and at
least 2 members shall be individuals with professional
or business experience (including agriculture, surface
or maritime transportation, or marine terminal or port
operation) in the private sector. At any given time, at
least 2 members of the Board shall be individuals with
professional standing and demonstrated knowledge in
maritime transportation or its regulation or
professional or business experience in maritime
transportation or marine terminal or port operation in
the private sector, and at least 2 members of the Board
shall be individuals with professional standing and
demonstrated knowledge in surface transportation or its
regulation or professional or business experience in
agriculture or surface transportation in the private
sector. Neither of the 2 individuals appointed as
surface transportation members under the preceding
sentence, and neither of the 2 individuals appointed as
maritime transportation members under that sentence,
may be members of the same political party.
(3) The term of each member of the Board shall be 5
years and shall begin when the term of the predecessor
of that member ends. An individual appointed to fill a
vacancy occurring before the expiration of the term for
which the predecessor of that individual was appointed,
shall be appointed for the remainder of that term. When
the term of office of a member ends, the member may
continue to serve until a successor is appointed and
qualified, but for a period not to exceed one year. The
President may remove a member for inefficiency, neglect
of duty, or malfeasance in office.
(4) On January 1, 1996, the members of the Interstate
Commerce Commission serving unexpired terms on December
29, 1995, shall become members of the Board, to serve
for a period of time equal to the remainder of the term
for which they were originally appointed to the
Interstate Commerce Commission. Any member of the
Interstate Commerce Commission whose term expires on
December 31, 1995, shall become a member of the Board,
subject to paragraph (3).
(5) No individual may serve as a member of the Board
for more than 2 terms. In the case of an individual who
becomes a member of the Board pursuant to paragraph (4)
, or an individual appointed to fill a vacancy
occurring before the expiration of the term for which
the predecessor of that individual was appointed, such
individual may not be appointed for more than one
additional term.
(6) A member of the Board may not have a pecuniary
interest in, hold an official relation to, or own stock
in or bonds of, a carrier providing transportation by
any mode and may not engage in another business,
vocation, or employment.
(7) A vacancy in the membership of the Board does not
impair the right of the remaining members to exercise
all of the powers of the Board. The Board may designate
a member to act as Chairman during any period in which
there is no Chairman designated by the President.
(c) Chairman.--
(1) There shall be at the head of the Board a
Chairman, who shall be designated by the President from
among the members of the Board. The Chairman shall
receive compensation at the rate prescribed for level
III of the Executive Schedule under section 5314 of
title 5.
(2) Subject to the general policies, decisions,
findings, and determinations of the Board, the Chairman
shall be responsible for administering the Board. The
Chairman may delegate the powers granted under this
paragraph to an officer, employee, or office of the
Board. The Chairman shall--
(A) appoint and supervise, other than regular
and full-time employees in the immediate
offices of another member, the officers and
employees of the Board, including attorneys to
provide legal aid and service to the Board and
its members, and to represent the Board in any
case in court;
(B) appoint the heads of offices with the
approval of the Board;
(C) distribute Board business among officers
and employees and offices of the Board;
(D) prepare requests for appropriations for
the Board and submit those requests to the
President and Congress with the prior approval
of the Board; and
(E) supervise the expenditure of funds
allocated by the Board for major programs and
purposes.