[Federal Register Volume 61, Number 221 (Thursday, November 14, 1996)]
[Notices]
[Pages 58413-58414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29144]


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FEDERAL MARITIME COMMISSION
[Docket No. 96-21]


Royal Venture Cruise Line, Inc.; Order of Investigation

    This proceeding is being instituted in response to the request of 
Royal Venture Cruise Line, Inc. (``Royal Venture'') for a hearing in 
response to a Federal Maritime Commission (``Commission'') Notice of 
Intent to Deny Royal Venture's application for a Certificate of 
Financial Responsibility of Non-Performance (``Certificate''). Section 
3 of Public Law 89-777, 46 U.S.C. app. 817e, provides that no person in 
the United States may arrange, offer, advertise, or provide passage on 
a vessel having berth or stateroom accommodations for fifty or more 
passengers, which is to embark passengers at a United States port, to 
receive a Certificate for the vessel.\1\
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    \1\ A Certificate is issued pursuant to the Commission's 
regulations at 46 CFR Part 540.
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    Royal Venture is a Georgia corporation which maintains an office in 
Clearwater, FL. Anastassios Kiriakidis (``Kiriakidis'') is the Chairman 
of Royal Venture. Kiriakidis, on behalf of Royal Venture, filed an 
application with the Commission to obtain a Certificate for the Sun 
Venture, a vessel with berth or stateroom accommodations for fifty or 
more passengers, for 2-day cruises to nowhere and 5-day cruises to 
Mexico from Tampa, FL. The Certificate was to be secured by an Escrow 
Agreement pursuant to the Commission's regulations at 46 CFR 540.5(b). 
The First Bank National Association, New York, New York, was named as 
the Escrow Agent for the Escrow Agreement. The Commission approved the 
application and notified Royal Venture on April 19, 1996, that a 
Certificate would be issued upon confirmation that an initial deposit 
of $303,000 had been deposited by Royal Venture in the escrow 
account.\2\ Even though the application was approved in April, 1996, 
Royal Venture has yet to notify the Commission that it has made the 
initial deposit of $303,000 in Escrow Account.
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    \2\ Royal Venture was also informed that it would have to file a 
signed original copy of the Escrow Agreement with the Commission.
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    In June, 1996, it came to the attention of the Commission's staff 
that Royal Venture apparently had circulated a brochure to the travel 
industry for cruises from Tampa on the Sun Venture. As a result of 
learning this information, the Commission's staff on July 1, 1996, sent 
Royal Venture a warning letter advising Royal Venture that a 
Certificate had not been issued, and that Royal Venture should 
immediately cease any activity which involved arranging, offering, 
advertising or providing passage on the Sun Venture. In response, Royal 
Venture acknowledged that brochures for its planned cruises on the Sun 
Venture had been distributed to travel agents at a trade show in Tampa, 
and stated that Royal Venture would not sell passages or collect any 
money for passages on the Sun Venture until a Certificate for the 
vessel was issued.
    In August, 1996, the Commission's staff learned that travel agents 
in the Tampa area had been promoting Royal Venture's proposed cruises 
on the Sun Venture and that a series of advertisements for the vessel 
had appeared in Tampa area newspapers. Another warning letter was sent 
by the Commission's staff to Royal Venture on August 23, 1996. 
Thereafter, information was obtained by the Commission's staff that 
indicated Royal Venture, through travel agents, had confirmed 
reservations or otherwise arranged for the sale of passages for cruises 
on the Sun Venture and that Royal Venture was holding deposits or fares 
for the passages.
    In order to verify this information and determine the extent of 
Royal Venture's activities, a member of the Commission's staff met with 
Kiriakidis at Royal Venture's office in Clearwater, FL on September 11, 
1996. At the meeting, Kiriakidis admitted that Royal Venture had 
advertised its planned service on the Sun Venture but took the position 
that the firm had not confirmed reservations or otherwise sold passages 
on the Sun Venture. His position was that Royal Venture had only 
obtained ``indications of interest'' for cruises and any deposits or 
fares which had been sent, unsolicited, to Royal Venture were promptly 
returned. This position appeared to be contrary to the information 
developed by the Commission's staff. Thus, the Commission, by Order of 
Investigation served September 25, 1996,\3\ instituted a proceeding to 
determine if Royal Venture and Kiriakidis had violated the provisions 
of section 3 of Public Law 89-777 and (or) Part 540.3 of the 
Commission's regulations, and, if so, whether a civil penalty should be 
assessed, the amount thereof, and whether a cease and desist order 
should be issued.
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    \3\ Docket No. 96-16, Royal Venture Cruise Line, Inc. and 
Anastassios Kiriakidis-Possible Violations of Passenger Vessel 
Certification Requirements.
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    The above course of conduct by Royal Venture also appears to bring 
into question the issuance of a Certificate to Royal Venture based on 
an Escrow Agreement. When a passenger vessel operator relies upon an 
Escrow Agreement to establish its financial responsibility, the 
Commission must have accurate, credible and reliable information 
concerning the collection of passenger deposits and fares to ensure the 
protection of passengers and the integrity of the Escrow Agreement. The 
Commission's experience thus far with Royal Venture and its Chairman 
creates doubts as to whether information to be provided by Royal 
Venture under the terms of the Escrow Agreement could be relied upon. 
Accordingly, pursuant to the Commission's Regulations at 46 CFR 540.8, 
a Notice of Intent to Deny Royal Venture's Application for a 
Certificate was sent to Royal Venture on October 3, 1996. Part 540.8(b) 
of the Commission's regulations provides that a Certificate may be 
denied, revoked, suspended, or modified for making any willfully false 
statement to the Commission in connection with an application for a 
Certificate, circumstances whereby the party does not qualify as 
financially responsible in accordance with the requirements of the 
Commission, or failure to comply with or respond to lawful inquiries, 
rules, regulations or orders of the Commission. Royal Venture was given 
20 days to request a hearing, to be held in accordance with the 
Commission's Rules of Practice and Procedure, to show that the intended 
denial should not take place. By letter received October 22, 1996, 
Royal Venture requested a hearing on the intended denial.
    Now therefore it is ordered, That pursuant to section 3 of Public 
Law 89-777 and 46 CFR Part 540, a proceeding is instituted to determine 
whether Royal Venture's application for a Certificate should be denied 
for: (1) making any willfully false statement to the Commission in 
connection with an application for a Certificate; (2) circumstances 
whereby Royal Venture does not qualify as financially responsible in 
accordance with the requirements of the Commission; and (or), (3) 
failure to comply with or respond to lawful inquiries, rules, 
regulations or orders of the Commission.
    It is further ordered, That this matter be assigned for public 
hearing before an Administrative Law Judge (``Presiding Officer'') of 
the Commission's Office of Administrative Law Judges at a date and 
place to be determined by the Presiding Officer in compliance with Rule 
61 of

[[Page 58414]]

the Commission's Rules of Practice and Procedure, 46 CFR 502.61. The 
Hearing shall include oral testimony and cross-examination at the 
discretion of the Presiding Officer only after consideration has been 
given by the parties and the Presiding Officer to the use of 
alternative forms of dispute resolution, and upon proper showing that 
there are genuine issues of material fact that cannot be resolved on 
the basis of sworn statements, affidavits, depositions, or other 
documents or that the nature of the matter in issue is such that an 
oral hearing and cross-examination are necessary for the development of 
an adequate record;
    It is further ordered, That Royal Venture Cruise Line, Inc. is 
designated respondent in this proceeding;
    It is further ordered, That the Commission's Bureau of Enforcement 
is designated a party to this proceeding;
    It is further ordered, That notice of this Order be published in 
the Federal Register, and copies be served upon all parties of record;
    It is further ordered, That other persons having an interest in 
participating in this proceeding may file petitions for leave to 
intervene in accordance with Rule 72 of the Commission's Rules of 
Practice and Procedure, 46 CFR 502.72;
    It is further ordered, That all future notices, orders, and (or) 
decisions issued by or on behalf of the Commission in this proceeding, 
including notice of the time and place of hearing or prehearing 
conference, shall be served on parties of record;
    It is further ordered, That all documents submitted by any party of 
record in this proceeding shall be directed to the Secretary, Federal 
Maritime Commission, Washington, D.C. 20573, in accordance with Rule 
118 of the Commission's Rules of Practice and Procedure, 46 CFR 
502.118, and shall be served on parties of record;
    It is further ordered, That pursuant to Rule 61 of the Commission's 
Rules of Practice and Procedure, 46 CFR 502.61, the initial decision of 
the Presiding Officer shall be issued by September 25, 1997 and the 
final decision of the Commission shall be issued by January 25, 1998.

    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 96-29144 Filed 11-13-96; 8:45 am]
BILLING CODE 6730-01-M