[Federal Register Volume 61, Number 29 (Monday, February 12, 1996)]
[Rules and Regulations]
[Pages 5308-5312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-2946]



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FEDERAL MARITIME COMMISSION

46 CFR Part 514

[Docket No. 95-08]


Service Contract Filing Requirements--Miscellaneous Revisions

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

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SUMMARY: The Federal Maritime Commission is amending its rules to 
provide for an optional, abbreviated service contract format; and to 
require service contracts to include the legal names and business 
addresses of the signatories and either list affiliates' business 
addresses or certify that affiliates' business addresses will be 
provided to the Commission within 10 business days of such request. The 
final rule in this matter should reduce duplication and Commission and 
carrier costs, as well as facilitate automation of the Commission's 
service contract records.

EFFECTIVE DATE: March 13, 1996.

FOR FURTHER INFORMATION CONTACT:
Bryant L. VanBrakle, Director, Bureau of Tariffs, Certification and 
Licensing, Federal Maritime Commission, 800 North Capitol Street NW., 
Washington, DC 20573, (202) 523-5796.

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Maritime Commission (``Commission'') initiated this 
proceeding with a Notice of Proposed Rulemaking (``NPR'' or ``Proposed 
Rule'') published in the May 23, 1995 Federal Register.\1\ The NPR 
solicited comments on a proposal to amend the Commission's rules to 
provide for an optional, abbreviated service contract format, on 
condition that such filings: (1) Incorporate by reference the 
corresponding electronic essential terms (``ET'') filed in the 
Commission's Automated Tariff Filing and Information System (``ATFI''); 
and (2) certify that, other than for those provisions set forth in the 
filed service contract, said ET sets forth the parties' true and 
complete contract. The NPR also proposed requiring contracts to set 
forth the true and complete names and addresses of contract parties, 
including affiliates, and the typewritten names, titles and addresses 
of the representatives signing contracts for the contract parties. The 
Proposed Rule's purposes are to reduce duplication and Commission and 
carrier costs, facilitate automation of the Commission's service 
contract records and facilitate the identification of shipper parties, 
including named affiliates to certain service contracts.

    \1\ 60 FR 27248.
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II. Comments

    The NPR elicited three comments: (1) Joint comments of the Asia-
North America Eastbound Rate Agreement, the Transpacific Westbound Rate 
Agreement, and the South Europe/American Conference (``ANERA, et 
al.''); (2) joint comments of the Trans-Pacific Conference of Japan and 
the Japan-Atlantic and Gulf Freight Conference and their member lines 
(``Japan Conferences''); and (3) the Trans-Atlantic Conference 
Agreement (``TACA''). The comments generally support the Proposed Rule, 
but suggest some modifications concerning the Proposed Rule's 
requirement for ``true and complete names, * * * and addresses'' of 
contract parties and information requirements for service contracts 
involving a significant number of shipper affiliates.

A. Abbreviated Service Contract Format

    ANERA, et al., and TACA support the proposed optional abbreviated 
service contract format, stating that it would reduce costs to them as 
well as the Commission.
    The Japan Conferences do not oppose the abbreviated format, but 
advise that it might not enjoy widespread usage in their trades. They 
note that traditional Japanese contracting practices would result in 
Japanese shippers and most other commercial interests continuing to 
insist upon single, full-text format contracts instead of 
``bifurcated'' versions that include the associated ET publications. 
They also advise that Japanese shippers, as well as most other 
commercial interests, have not yet adopted the practice of contracting 
via Electronic Data Interchange. They therefore urge that this format 
be ``optional'', as currently proposed.
    The Japan Conferences also advise that problems could be associated 
with requiring contract signatories to certify that the terms set forth 
in the abbreviated format service contract and ATFI ETs are the true 
and complete terms covering all aspects of the parties' contract. They 
believe problems could occur when making certifications about 
frequently changing terms and conditions in instances where an 
inadvertent disparity arises between the true contract and the 
abbreviated version. They contend that the latter would be controlling 
under the rule but would not reflect the parties' true understanding.

B. Addresses of Contract Signatories

    ANERA, et al., support the NPR's proposal to require service 
contracts to state the contract parties' addresses. TACA opposes the 
Proposed Rule's use of the term ``true and complete'' with regard to 
contract parties' names and addresses,\2\ because the term might have 
several meanings. TACA offers several examples in this regard: the name 
shown on a person's birth certificate; the name that a person commonly 
uses; the official legal name of a company or corporation shown on its 
certificate of incorporation; or a commonly used acronym, such as 
``AT&T'', rather than ``American Telephone and Telegraph Company''. 
Further, it contends that a ``true and complete'' address could be the 
postal address of a person or company rather than the business address. 
TACA therefore believes that this aspect of the Proposed Rule invites 
uncertainty and confusion. Moreover, it contends that ocean common 
carrier service contract filers should be allowed to ``reasonably rely 
on the form, style, and completeness of the names of those persons 
executing such contracts on behalf of shipper parties as are provided 
them.'' As an alternative, TACA suggests that requiring a contract to 
state the ``names and postal addresses of contract parties and 
signers'' would be sufficient.\3\ To this end, it offers the following 
revision to the first sentence of 46 CFR 514.7(h)(1)(v):

    \2\ The NPR proposed requiring service contracts to include 
``the true and complete names and addresses of the contract parties 
and the typewritten names, titles, and addresses of the 
representatives signing the contract for the parties.''
    \3\ TACA also believes that it is redundant to state the address 
of a ``contract signer'' when its address, in most cases, is the 
same as that of the contract party it represents. They believe that 
the revision which they suggest will also remedy this aspect of the 
Proposed Rule.
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    The names and postal addresses of the contract parties and the 
typewritten names and titles of the representatives signing the 
contract for the parties along with their postal address if 
different than that of the Contract party represented.

[[Page 5309]]


C. Addresses of Contract Parties' Affiliates

    ANERA, et al., support a requirement that a contract state the 
addresses of affiliates named in the contract, stating that this would 
make it easier for ANERA, et al., and the Commission to enforce the 
terms of service contracts. However, they suggest that the requirements 
applying to shippers' association members and affiliates be modified to 
allow contract parties the following options: (1) Listing the addresses 
in the contract; or (2) certifying that the addresses have been 
provided to the carrier or conference to retain and to be made 
available upon request by the Commission. They believe that this would 
also achieve the NPR's goals, while allowing the industry flexibility 
to comply in the most efficient manner.
    TACA opposes a requirement that service contracts include shippers' 
affiliates' addresses. It states that this requirement is ``contrary to 
the paramount purpose of this rulemaking proceeding * * * to reduce the 
`sheer physical bulk' of confidential service contract material.'' As 
an alternative, TACA suggests that ``to meet the purpose regarding 
difficulty in identifying affiliates to certain contracts which have, 
in some cases, hampered the Commission's investigative efforts,'' the 
Proposed Rule be revised to provide that contract filers obtain and 
confidentially provide shipper party affiliate address information when 
requested by the Commission in its investigative efforts. TACA believes 
that such a modification would serve the Proposed Rule's purpose and 
``eliminate its undesirable features''. It also states that ``to 
include relevant affiliate address information in * * * contracts will 
increase costs, delay the filing process and otherwise impede it.''

III. Discussion

    The Commission has considered the comments in this matter and has 
decided to adopt a Final Rule that modifies the proposal to adopt the 
suggestion that the Final Rule require ``legal names and business 
addresses'', rather than ``true and complete names and addresses''. The 
Final Rule also moves the change proposed for section 514.7(h)(1)(vi) 
into section 514.7(h)(1)(v) and clarifies the Rule's application to 
previously-filed contracts amended after the Final Rule's effective 
date.
    The Commission is adopting, without change, the Proposed Rule's 
amendment of 46 CFR 514.7(h)(2)(i)(A) to afford service contract 
parties the option of filing service contracts in abbreviated format, 
on condition that such filings incorporate by reference the 
corresponding ATFI ETs; and declare that, other than for those 
provisions set forth in the field service contract, said ET sets forth 
the parties' true and complete contract. The Final Rule also requires 
service contracts to set forth the contract parties' names and 
addresses. Carriers and conferences, like the Japan Conferences, which 
do not elect to file service contracts in abbreviated form may continue 
to file service contracts in full-text format, as at present.
    TACA has raised questions regarding the ``true and complete'' 
aspect of a name or address, and occasional redundancy when the 
addresses of service contract parties and representatives signing the 
contract are the same, and has offered a modification to the rule to 
clarify it in this regard. The Final Rule modifies proposed 46 CFR 
514.7(h)(1)(v) by deleting the term ``true and complete'' and 
substituting the requirement that the ``legal names and business 
addresses'' be set forth in the contract.\4\

    \4\ A business address need not be repeated in instances where 
the business address of the person signing the contract is the same 
as the business address of a contract party.
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    While TACA is concerned that a requirement that names and addresses 
be ``true and complete'' would invite uncertainty and confusion 
regarding the term's meaning, the Commission believes that TACA's 
suggested revision to require the ``names and postal addresses'' of 
contract parties is not acceptable. However, to partially address 
TACA's concerns, the Final Rule herein clarifies that a contract is 
required to set forth the parties' ``legal names and business 
addresses'', as well as the legal names of affiliates of service 
contract parties entitled to access the contract.
    The Commission has considered the comments by ANERA, et al., 
regarding the NPR's proposal to amend 46 CFR 514.7(h)(1)(vi) with 
regard to names and addresses of service contract parties' affiliates, 
and TACA's observation concerning address information for service 
contracts involving significant numbers of affiliates. The Commission 
has determined to provide carriers/conferences the option of either (1) 
listing affiliates' business addresses in the service contract; or (2) 
certifying in the contract that this information will be provided to 
the Commission upon request within 10 business days of such request.
    The collection of information requirements contained in this final 
rule were previously approved by the Office of Management and Budget 
under the provisions of the Paperwork Reduction Act of 1980 (Pub. L. 
96-511), as amended. (OMB Control No. 3072-0055, expires May 31, 1998.) 
Public reporting burden for this collection of information will 
decrease to an average of one manhour per response, including the time 
for reviewing instructions, searching existing data sources, gathering 
and maintaining the data needed, and completing and reviewing the 
collection of information.
    The Chairman of the Commission certifies, pursuant to section 
605(b) of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., that 
this final rule will not have a significant economic impact on a 
substantial number of small entities, including small businesses, small 
organizational units, and small governmental jurisdictions.

List of Subjects in 46 CFR Part 514

    Administrative practice and procedure, Antitrust, Automatic data 
processing, Cargo vessels, Confidential business information, 
Contracts, Exports, Freight, Freight forwarders, Imports, Maritime 
carriers, Penalties, Rates and fares, Reporting and recordkeeping 
requirements.

    Therefore, pursuant to 5 U.S.C. 553 and sections 3, 8, and 17 of 
the Shipping Act of 1984 (46 U.S.C. app. 1702, 1707 and 1716), the 
Federal Maritime Commission amends Part 514 of Title 46 of the Code of 
Federal Regulations as follows:

PART 514--[AMENDED]

    1. The authority citation for Part 514 continues to read:

    Authority: 5 U.S.C. 552 and 553; 31 U.S.C. 9701; 46 U.S.C. app. 
804, 812, 814-817(a), 820, 833a, 841a, 843, 844, 845, 845a, 845b, 
847, 1702-1712, 1714-1716, 1718, 1721, and 1722; and sec. 2(b) of 
Pub. L. 101-92, 103 Stat. 601.

    2. Section 514.7 is amended by revising paragraph (h)(1)(v) and 
adding paragraph (h)(2)(i)(C) to read as follows:


Sec. 514.7  Service contracts in foreign commerce.

* * * * *
    (h) * * *
    (1) * * *
    (v) The typewritten legal names and business addresses of the 
contract parties; the typewritten legal names of affiliates entitled to 
access the contract; and the typewritten names, titles and addresses of 
the representatives signing the contract for the parties. Carriers and/
or conferences which enter into contracts which include affiliates must 
in each instance either: 

[[Page 5310]]

    (A) list the affiliates' business addresses; or
    (B) certify that this information will be provided to the 
Commission upon request within 10 business days of such request (These 
requirements will apply to previously-filed contracts amended after 
March 13, 1996). However, the requirements of this section do not apply 
to amendments to contracts that have been filed in accordance with the 
requirements of this section unless the amendment adds new parties or 
affiliates. subsequent references in the contract to the contract 
parties shall be consistent with the first reference (e.g., (exact 
name), ``carriers,'' ``shipper,'' or ``association,'' etc.); and
* * * * *
    (2) * * *
    (i) * * *
    (C) Section 514.7(h)(2)(i)(A) does not apply to a service contract 
that incorporates by reference all of the associated essential terms 
filing as published in ATFI, provided that the parties certify that, 
other than for those provisions set forth in the filed service 
contract, such essential terms filing sets forth the true and complete 
contract.\1\

    \1\ See Exhibit II of this part for an example of an abbreviated 
format service contract.
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    3. Exhibit II is added to Part 514, reading as follows:

BILLING CODE 6730-01-M

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[GRAPHIC] [TIFF OMMITTED] TR12FE96.000




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    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 96-2946 Filed 2-9-96; 8:45 am]
BILLING CODE 6730-01-C