[Federal Register Volume 62, Number 223 (Wednesday, November 19, 1997)]
[Rules and Regulations]
[Pages 61648-61649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30277]


-----------------------------------------------------------------------

FEDERAL MARITIME COMMISSION

46 CFR Part 586

[Docket No. 96-20]


Port Restrictions and Requirements in the United States/Japan 
Trade

AGENCY: Federal Maritime Commission.

ACTION: Final rule; suspension of effectiveness.

-----------------------------------------------------------------------

SUMMARY: The Federal Maritime Commission is suspending the 
effectiveness of its final rule assessing fees on liner vessels 
operated by Japanese carriers, in light of agreements reached between 
the United States Government and the Government of Japan, and among 
affected commercial parties and the Government of Japan, addressing 
restrictive and unfavorable conditions affecting U.S. shipping in 
Japanese ports.

DATES: Effective November 13, 1997, 46 CFR 586.2 as published at 62 FR 
9696, March 4, 1997, and amended at 62 FR 18532, April 16, 1997, is 
suspended.

ADDRESSES: Filings and requests for publicly available information 
should be addressed to: Joseph C. Polking, Secretary, Federal Maritime 
Commission, 800 North Capitol Street, N.W., Washington, D.C. 20573, 
(202) 523-5725.

FOR FURTHER INFORMATION CONTACT:
Thomas Panebianco, General Counsel, Federal Maritime Commission, 800 
North Capitol Street, N.W., Washington, D.C. 20573, (202) 523-5740.

SUPPLEMENTARY INFORMATION: On February 26, 1997 (62 FR 9696, March 4, 
1997), the Commission issued a final rule pursuant to section 19(1)(b) 
of the Merchant Marine Act, 1920, 46 U.S.C. app. 876(1)(b), to assess 
per-voyage fees on Japanese liner carriers, in response to unfavorable 
conditions facing U.S. shipping in Japanese ports. On April 13, 1997 
(62 FR 18533, April 16, 1997), the Commission postponed the effective 
date of the final rule (originally set for April 14, 1997) until 
September 4, 1997, to allow the Government of Japan and affected 
parties further opportunity to craft appropriate plans for addressing 
the unfavorable conditions identified in the final rule. On September 
4, 1997, the Commission, having been presented

[[Page 61649]]

with no evidence of meaningful reforms to Japanese port conditions, 
took no action to prevent the rule from becoming effective.
    Over the last several months, and particularly in recent weeks, 
U.S. and Japanese Government negotiators have worked assiduously to 
craft agreements and reform plans to remedy the unfavorable conditions 
that prompted the Commission's final rule. On October 27, 1997, it came 
to the Commission's attention that these negotiators had come to terms 
on certain documents which, upon ratification, would constitute a 
comprehensive agreement to reform Japanese port practices. Based on 
this positive development, the Commission entered into a consent order 
with the Japanese shipping lines, accepting a compromise payment of 
$1.5 million in full satisfaction of the $4 million owed (and overdue) 
for the month of September, and agreed to take no further action in 
this matter while the ratification of the agreements were pending.
    On November 10, 1997, Chairman Creel received a letter from Under 
Secretary of State for Economic, Business, and Agricultural Affairs 
Stuart E. Eizenstat and Acting Maritime Administrator John Graykowski, 
conveying final signed copies of correspondence between Secretary of 
State Madeleine K. Albright and Ambassador Kunihiko Saito reflecting 
the arrangements reached by the U.S. and Japan delegations during the 
talks. Mr. Eizenstat and Mr. Graykowski stated that ``this package 
represents a reasonable basis to recommend that the Commission 
compromise all the remaining assessments under Docket No. 96-20 for 
October and November and suspend further assessments and the 
requirement for Japanese carriers to report further vessel calls.'' 
Attached to Ambassador Saito's letter were copies of two agreements 
among the Government of Japan and commercial interests regarding the 
system of prior consultation.
    The Commission is persuaded that the arrangements reflected in 
these documents represent a significant step in the process of 
remedying unfavorable Japanese port conditions. While the Commission's 
ultimate concern is the improvement of actual shoreside practices and 
policies, in this case--where the issues are complex and the affected 
interests are several--the crafting and achievement of consensus on 
workable reform plans is a vital and commendable part of the process. 
The agreed-upon plans address in substance all of the unfavorable 
conditions identified in the Commission's final rule, covering both the 
issues of licensing of port transportation business operations and the 
system of prior consultation. With regard to the latter, relevant 
parties have agreed on reform of the existing system and the creation 
of an alternative process of prior consultations. We expect that these 
changes, when fully implemented, will remedy those unfavorable 
conditions identified in the final rule.
    Accordingly, the Commission is now suspending the effectiveness of 
the final rule. This action has the effect of ceasing both the 
assessment of fees on Japanese carriers and the requirement that they 
report vessel calls.
    The Commission expects that it will collect information 
periodically in the normal course to remain apprised of changes in port 
conditions resulting from implementation of the Agreements. However, we 
would note that the arrangements reached by U.S. and Japanese 
negotiators include provisions for consultation. It is our hope that, 
should any disputes or problems arise in the implementation of these 
agreements, they can appropriately be addressed through diplomatic and 
consultative mechanisms. To encourage such a process, if a complaint 
relating to matters contained in this docket is lodged with the 
Commission at any time by interested persons, the Commission 
immediately will notify the Secretary of State of such complaint, and 
will request the Secretary of State to seek resolution of the 
outstanding matters through diplomatic channels. At the same time, 
however, the Commission retains its authority to take further action, 
should it become necessary to do so.
    Therefore, it is ordered, That 46 CFR 586.2 as published March 4, 
1997 (62 FR 9696), and amended by the Commission April 16, 1997 (62 FR 
18532) is hereby suspended.

    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 97-30277 Filed 11-18-97; 8:45 am]
BILLING CODE 6730-01-M