[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