[Federal Register Volume 63, Number 50 (Monday, March 16, 1998)]
[Notices]
[Pages 12808-12812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6668]


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FEDERAL MARITIME COMMISSION

[Docket No. 98-03]


Sea Dragon Navigation Ltd., et al.--Possible Violations of 
Sections 8, 10(a)(1), 10(b)(1) and 23 of the Shipping Act of 1984; 
Order of Investigation and Hearing

    Since early 1996, it appears that Sea Dragon Navigation Ltd. (``Sea 
Dragon''), a Hong Kong company, has become an increasingly active and 
problematic participant in the inbound Far East-United States trades. 
It is alleged that Sea Dragon has involved itself in myriad rate 
malpractices with respect to this traffic including, inter alia, 
improperly accessing service contracts belonging to other shippers, 
widespread misdescription of commodities to ocean common carriers 
transporting the cargo and the use of other devices such as improper 
connecting carrier agreements as a means of obtaining transportation at 
less than applicable rates. It further appears that, in the conduct of 
this enterprise Sea Dragon has employed various false or assumed names, 
and has obtained the services, participation and assistance of numerous 
companies, destination agents and individuals, both in the U.S. and 
abroad.
    Due to the concerted nature of the malpractices apparently carried 
out here, and the significant inter-relationships, both commercial and 
corporate, between the companies and individuals involved, seventeen 
(17) corporate parties and individuals are named Respondents herein:
    (1) Sea Dragon Navigation Ltd. is a Hong Kong company located at 
Room 602, The Centre Mark, 287-299 Queen's Road Central, Hong Kong, 
PRC. Sea

[[Page 12809]]

Dragon purports to be an ocean common carrier (i.e. a vessel operator) 
and holds out to perform such services pursuant to its ATFI tariff FMC 
No. 011712-001,\1\ effective October 15, 1993. Lee Man Wong, a.k.a. 
Denis Lee, is identified in its tariff as Sales Manager of Sea Dragon. 
K. C. ``Philip'' Yu is the Director of Sea Dragon.
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    \1\ As an ocean common carrier, Sea Dragon need not provide 
evidence that it maintains a non-vessel-operating common carrier 
(``NVOCC'') bond, nor has it designated a resident agent in the 
United States.
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    (2) CES Express Inc. (``CES Express'') is a California corporation, 
whose place of business was 801 S. Garfield Avenue, Alhambra, 
California 91801. According to the 1994 and 1995 Statement by Domestic 
Stock Corporation filed with the California Secretary of State, the 
President of CES Express is Philip Yu; Christine Cheng serves as 
Secretary of the corporation and as its resident agent. Yun Kei Lo is 
Chief Financial Officer. As relevant herein, CES Express served as the 
U.S. destination agent of Sea Dragon with respect to inbound shipments 
from the Far East to U.S. West Coast ports during the period prior to 
November 1996.
    (3) Chin Express Services Inc. (``Chin Express Services'') is a 
California corporation whose place of business is 410 S. San Gabriel 
Boulevard, Suite 7, San Gabriel, California 91776. According to the 
1997 Statement by Domestic Stock Corporation filed with the California 
Secretary of State, the President of Chin Express Services is Philip 
Yu; Christine Cheng serves as Secretary and Chief Financial Officer of 
the corporation, and as its resident agent. As relevant herein, Chin 
Express Services acted as the U.S. destination agent of Sea Dragon with 
respect to inbound shipments from the Far East to U.S. West Coast ports 
during the period subsequent to November 1996.
    (4) L & L Chain Inc. (``L & L Chain'') is a California corporation 
whose registered place of business is 317 South Isis Avenue, Inglewood, 
California 90301. According to the 1996 Statement by Domestic Stock 
Corporation filed with the California Secretary of State, the President 
of L & L Chain is Yun Kei Lo; Christine Cheng serves as its resident 
agent. As relevant herein, L & L Chain acted as the shipper and/or 
consignee with respect to inbound shipments from the Far East to U.S. 
West Coast ports prior to November 1996.
    (5) CTL Maritime (USA) Inc. (``CTL Maritime'') is a tariffed and 
bonded NVOCC whose place of business is 317 South Isis Avenue, Suite 
105, Inglewood, California 90301. CTL Maritime's address is the same as 
L & L Chain, and is the address previously reported for CES Express. 
Through 1996 and 1997, CTL Maritime has served as notify party and 
destination agent on behalf of numerous shipments purportedly shipped 
on behalf of Welrich Trading, L & L Chain, and Transnation Shipping 
Ltd., among other shipper names. Raymond Cheng is the Managing Director 
of CTL Maritime.
    (6) Pan Sharp International Limited (``Pan Sharp'') is a tariffed 
and bonded NVOCC located at Room 602, The Centre Mark, 287-299 Queen's 
Road Central, Hong Kong, PRC. Pan Sharp holds itself out as an NVOCC 
pursuant to its ATFI tariff FMC No. 014944-001, effective September 5, 
1997.\2\ Pan Sharp currently maintains an NVOCC bond with the 
Intercargo Insurance Company, in the amount of $50,000. Bond No. 102737 
became effective June 13, 1997.
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    \2\ Pursuant to Rule 24 of Pan Sharp's tariff, Distribution 
Publications Inc., 7996 Capwell Drive, Oakland, California 94621, 
serves as the U.S. resident agent for purposes of receiving service 
of process on behalf of Pan Sharp.
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    As relevant herein, Pan Sharp is believed to have been established 
by the principals of Sea Dragon, and currently operates from the same 
premises as those occupied by Sea Dragon. The NVOCC bond form filed on 
behalf of Pan Sharp includes the corporate certification of corporate 
Sales Manager Lee Man Wong, also known to be the Sales Manager of Sea 
Dragon, and further identifies Mr. K.C. Yu as General Manager.
    (7) K.C. ``Philip'' Yu is a principal in Sea Dragon, CES Express, 
and Chin Express Services. It is believed that Mr. Yu also is the same 
individual shown as Director of Pan Sharp. Originally resident in Hong 
Kong, Mr. Yu appears to be the individual responsible for direction of 
the business affairs of Sea Dragon, CES Express, Chin Express Service 
and Pan Sharp.
    (8) Christine Cheng is a principal in CES Express and Chin Express 
Service. While providing services as the ``clearing agent'' for inbound 
shipments imported by Y & W Worldtrade Inc., it appears that Ms. Cheng 
facilitated the misuse of Y & W Worldtrade's service contract with 
ANERA and Sea Dragon's misdescription of cargo being transported 
thereunder. Ms. Cheng apparently played a similar role in serving as 
destination agent for shipments whereby Sea Dragon improperly obtained 
access to Hyundai Merchant Marine Co. Ltd. (``Hyundai'') service 
contract No. 96-5064 with Welrich Trading Co. and likewise misdescribed 
those commodities being shipped.
    (9) Yun Kei Lo is President of L & L Chain Inc., shown as shipper 
and/or consignee on numerous misdescribed shipments of inbound cargo 
from the Far East. Mr. Yun also is Chief Financial Officer and a 
Director of CES Express.
    (10) Y & W Worldtrade Inc. (``Y & W Worldtrade'') is an importer 
and distributor of pottery located at 4373 Santa Anita Avenue, El 
Monte, California 91731. Y & W Worldtrade is the shipper signatory to 
ANERA service contract No. 5476/96, executed by Y & W Worldtrade's 
President and by its Traffic Manager, based in Hong Kong. Y & W 
Worldtrade's Hong Kong office is located on the premises of Sea Dragon 
Navigation. At destination in the U.S., Y & W Worldtrade employs the 
services of Christine Cheng of CES Express to act as clearing agent in 
handling inbound shipments and arranging delivery of goods to Y & W 
Worldtrade and its customers.
    (11) Worldwide Container Line Inc. (``Worldwide Container'') d.b.a. 
Worldwide Trade Inc., was an NVOCC located at 145-34 157th Street, 
Jamaica, New York 11434.\3\ Worldwide Container appears to have handled 
numerous shipments from Hong Kong to the East Coast of the United 
States on behalf of Sea Dragon.
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    \3\ It appears that in or about July 1997, Worldwide moved its 
offices to 108 S. Franklin Avenue. #17, Valley Stream, New York 
11582.
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    Prior to July 17, 1997, Worldwide Container maintained a tariff \4\ 
and NVOCC bond with the Commission. While canceled prior to the date of 
this Order, Worldwide Container's bond continues to provide coverage 
with respect to any civil penalties assessed against Worldwide 
Container for violations occurring before the date of bond termination.
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    \4\ The tariff (ATFI No. 009890-002) contained only three 
commodity descriptions: Cargo, NOS (Premium Service); Cargo NOS 
(Regular Service); and Cargo NOS (Superior Service).
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    (12) Bonnie Yang was the Managing Director of Worldwide Container 
and handled the company's daily operations.
    (13) O.E.I. International Inc. (``OEI'') is a tariffed and bonded 
NVOCC \5\ located at 813 W. Arbor Vitae Street, 2nd Floor, Inglewood, 
CA 90301. In addition to being identified by name as the notify party 
on the certain vessel-operating common carrier (``VOCC'' or ``master'') 
bills of lading in 1996, OEI also is known to have handled inbound 
shipments while doing business as Power International, Pacific Century

[[Page 12810]]

Inc., Oster International, Care Group, and Orient Connection.
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    \5\ O.E.I. International Inc. currently maintains an effective 
tariff, ATFI No. 012107-001, with the Commission.
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    (14) OMNI-Freight International, Inc. (``OMNI-Freight'') is a 
California corporation, located at the same address in Inglewood, 
California as OEI. OMNI-Freight does not maintain an NVOCC tariff and 
bond.
    As relevant herein, OMNI-Freight issues arrival notices and 
collects freight charges for OEI's shipments. Whereas OEI often is 
identified as the notify party on certain VOCC bills of lading, OMNI-
Freight generally appears as the consignee or notify party in the 
underlying NVOCC bills of lading for the same shipment. For certain 
1997 shipments, OMNI-Freight is shown on VOCC bills of lading as the 
notify party.
    (15) Hwai Nien Hsu, a.k.a. Power Hsu, is the president of OEI 
International and president of OMNI-Freight. Mr. Hsu is believed 
generally knowledgeable as to the involvement of both firms insofar as 
they served as consignees and/or destination agents with respect to 
misdescribed cargoes originating with Transnation Shipping Company and 
Sea Dragon.
    (16) Transnation Shipping Company (``Transnation Co.''), located at 
Rm. 1408, The Centre Mark, 287-299 Queen's Road, Central District, Hong 
Kong, purports to be a VOCC according to its tariff maintained in the 
Commission's ATFI system. Its ATFI filings identify Ivy Chan as 
Director of Transnation Co.
    Transnation Co. maintains an effective tariff in ATFI (ATFI No. 
012748-001); however, that tariff contains only one rate, applicable to 
Cargo, NOS between the United States and Asia Countries, filed in 
August 1994.
    (17) Transnation Shipping Limited (``Transnation Ltd.'') is located 
at Rm. 1104, The Centre Mark, 287-299 Queen's Road, Central District, 
Hong Kong. The business address, phone and fax numbers for Transnation 
Ltd. and Transnation Co. are the same.\6\ Choi Ling ``Ivy'' Chan is 
Director, Corporate Secretary and principal shareholder of Transnation 
Ltd.
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    \6\ Transnation Ltd. previously moved its offices from Room 1408 
in the same building, i.e. the offices of Transnation Co. Its 
``registered office'' in Hong Kong is Room 1408.
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    Transnation Ltd. operates as an NVOCC. It appears that Transnation 
Ltd. was doing business as early as January 1996; however, Transnation 
Ltd.'s tariff (ATFI No. 015124-001) did not become effective until 
December 4, 1997.\7\ Transnation Ltd. maintains and NVOCC bond, No. 
8941515, issued by Washington International Insurance Company, which 
became effective November 25, 1997.
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    \7\ The tariff contains three commodity descriptions: Cargo, NOS 
(Premium Service); Cargo, NOS (Regular Service); and Cargo, NOS 
(Superior Service) for shipments between the United States and Asia 
Countries.
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    Based on available import data, Sea Dragon would appear to be the 
actual shipper on over 4500 inbound shipments during 1996 and 1997. 
Records obtained under the auspices of Commission Fact Finding 
Investigation No. 22 are indicative generally of the considerable scope 
and extent of cargo misdescriptions, untariffed activities and NVOCC 
misratings in which it appears Sea Dragon and its co-venturers have 
become involved.

Time Period: January 1 Through November 30, 1996

    During the time period through November 30, 1996, Sea Dragon 
allegedly accessed a service contract between Hyundai Merchant Marine 
Co. Ltd. and Welrich Trading Co., Hyundai SC No. 96-5064, to obtain 
transportation of commodities on its own behalf as shipper (in relation 
to the underlying ocean common carrier, Hyundai) and as a carrier 
issuing its own Sea Dragon house bill of lading with respect to the 
commodity being shipped. It appears that Sea Dragon misdescribed the 
commodities declared on the ocean common carrier's bills of lading 
(master bill), which were rated by Hyundai pursuant to the service 
contract. Sea Dragon and its U.S. counterparts, primarily CES Express 
and CTL Maritime, nonetheless made payment to the ocean common carrier 
on the basis of the inaccurate commodity shown on the bill of lading 
when issued.
    During this same time period, it is believed that a substantial 
volume of misdescriptions had occurred on shipments imported pursuant 
to a service contract between Y & W Worldtrade, of El Monte, 
California, and the Asia North American Eastbound Rate Agreement 
(``ANERA''). Under an arrangement whereby Y & A Worldwide contracted 
for ``cargo clearing'' services to be provided by Christine Cheng of 
CES Express, it appears that Sea Dragon and CES Express accessed the 
service contract of Y & W Worldtrade and utilized same to handle the 
inbound NVOCC traffic of Sea Dragon at ANERA service contract rates.
    It appears that Sea Dragon misdescribed numerous shipments as KD 
furniture while utilizing the proprietary service contract rates 
available under the Y & W Worldtrade service contract. Y & W 
Worldtrade's Hong Kong office generally was listed as shipper on the 
ocean carrier's bill of lading, and Y & W Worldtrade, El Monte, acted 
as the consignee or notify party. Records obtained by the Commission's 
Bureau of Enforcement (``BOE'') indicate that an NVOCC bill of lading 
was issued by Sea Dragon to a consignee wholly unrelated to Y & W 
Worldtrade, which house bill subsequently was tendered to Sea Dragon's 
U.S. agent at destination.
    Moreover, misdescription activities apparently were not confined to 
the Y & W Worldtrade and Welrich Trading service contracts during this 
period. It appears that Sea Dragon and/or Transnation Co., using a 
false or assumed name \8\ in the shipper box of the ocean carrier's 
bill of lading, participated in additional shipments in which the 
commodity was variously described as ``DK furniture,'' ``kitchenware,'' 
``chinaware,'' ``woodenware'' and ``exercise equipment.'' In numerous 
instances the notify party for West Coast cargoes utilized an assumed 
name \9\ subsequently identified as one of Power Hsu's companies. 
Worldwide Container generally acted as notify party in the case of New 
York shipments.
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    \8\ Additional shipper names include Perfect International, 
Oster International, International Merchandise Inc., Santa National, 
China World, Shimon Import, Glory Noble and Orient Connection Corp.
    \9\ The consignee/notify party identified on the master bill of 
lading often reflected assumed names such as Power International, 
Pacific Century, Oster International, Care Group and Orient 
Connection. All reflect the telephone number or address of O.E.I. 
International and OMNI-Freight.
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    Of similar import are shipments transported during 1996, in which L 
& L Chain purported to serve as shipper, consignee and/or notify 
party.\10\ More than 180 shipments from Hong Kong to the United States, 
described as ``furniture'' or ``KD furniture,'' were carried by NYK and 
Hyundai on behalf of L & L Chain. Consignees and notify parties with 
respect to these shipments were CES Expres, CTL Maritime, OMNI-Freight 
and others. It is alleged that commodities also were misdescribed on 
the master bills of lading.
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    \10\ L & L Chain's address alternately appears as Room 57, 
Ground Floor, Seven Seas Shopping Centre, 121 King's Road, North 
Point, Hong Kong, or as 801 S. Garfield Ave., Suite 102, Alhambra, 
California, the business address then occupied by CES Express.
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Time Period: November 1, 1996 Through May 30, 1997

    Subsequent to its receipt of a Fact Finding subpena in October 
1996, CES Express vacated its offices in Alhambra, California. 
Likewise, Sea Dragon appeared to have abandoned its use of the Welrich 
Trading service contract.

[[Page 12811]]

    It appears that on and after November 1, 1996, Sea Dragon 
contracted to obtain transportation from Hong Kong to the United States 
pursuant to a connecting carrier agreement signed with Hyundai.\11\ 
Otherwise undated, the agreement provides carrier-to-carrier rates 
whereby Sea Dragon could obtain transportation on Hyundai's linehaul 
vessels to the U.S. during the period November 1, 1996 through October 
31, 1997. While Sea Dragon presently maintains a VOCC tariff, Sea 
Dragon is not known to operate any vessels which serve U.S. ports. 
Accordingly, it appears that Sea Dragon would not be entitled to 
utilize an agreement subject to 46 CFR Part 572 as a means of obtaining 
transportation from an ocean common carrier. See, e.g., 46 CFR 
572.306(b) and (c).\12\
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    \11\ The agreement is signed by Philip Yu, on behalf of Sea 
Dragon.
    \12\ Subparagraph (b) of the cited rule makes such agreements 
exempt from filing only to the extent the parties meet the tariff 
provisions set forth in paragraph (c) thereof. Subparagraph (c) 
requires publication in the applicable tariffs of all through rates, 
routings and additional charges for such service, as well as the 
identification within the tariff of any participating carriers to 
such transhipment agreement. See also 46 CFR 514.15(b)(13). Sea 
Dragon's tariff contains no references to any such agreements. Its 
mandatory tariff rule 13 specifies that such rule is ``not 
applicable.''
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    Significant volumes of cargo appear to have been transported by 
Hyundai under the above agreement. Various names were identified as 
shippers \13\ on the master bills of lading, whereas Sea Dragon was 
identified solely within the ``Marks & Numbers'' portion of the bill. 
The above shipments were destined for handling by Chin Express \14\ for 
West Coast cargo, and Worldwide Container with respect to East Coast 
cargo. Through July 1997, Chin Express alone is believed to have 
handled over 2900 TEUs of import cargo from Hong Kong.
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    \13\ Putative shippers include Tuanjin Import & Export Corp., 
East Corp., Fast Sales Ltd., Motive Products Manufactory Co., Diary 
Products Manufactory Co., Rich Chat Chong Import/Export Corp among 
others.
    \14\ In or about November 1996, Christine Cheng commenced 
operations as Chin Express Services, with business offices located 
in San Gabriel, California.
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Time Period: May 30, 1997 to Present

    Subsequent to service of a Fact Finding subpena upon Chin Express 
in May 1997, Sea Dragon abandoned its use of the Hyundai connecting 
carrier agreement. It further appears that Philip Yu thereafter 
commenced operations as Pan Sharp International Ltd., an NVOCC. 
According to records maintained by the Bureau of Tariffs, Certification 
and Licensing, an NVOCC bond was filed on behalf of Pan Sharp, 
effective June 13, 1997. Pan Sharp initially filed in ATFI on July 28, 
1997; however, its tariff did not become effective until September 5, 
1997.
    In and after May 1997, Pan Sharp acted as shipper on numerous 
shipments from Hong Kong to the U.S. At this same time, Pan Sharp 
separately negotiated and executed a time volume rate arrangement, TVR 
97-004, and a service contract with Hyundai \15\ in which Pan Sharp is 
identified as an NVOCC. More than 160 shipments were originated by Pan 
Sharp during the months of June-August 1997, at a time when Pan Sharp 
did not yet have any tariff rates effective for its NVOCC services.
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    \15\ Hyundai Service Contract No. 97-5817 was executed May 31, 
1997, to be effective from June 3, 1997 through April 30, 1998. That 
agreement identifies Pan Sharp as an NVOCC.
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    Section 10(a)(1) of the Shipping Act of 1984 (``1984 Act''), 46 
U.S.C. app. Sec. 1709 (a)(1), prohibits any person knowingly and 
willfully, directly or indirectly, by means of false billings, false 
classification, false weighing, false report of weight, false 
measurement, or by any other unjust or unfair device or means, from 
obtaining or attempting to obtain ocean transport for property at less 
than the rates or charges that would otherwise be applicable. Operating 
both independently and in concert with one another, it appears that Sea 
Dragon and Transnation Co. engaged in a pattern of commodity 
misdescription practices, in many instances adopting false or assumed 
names as a means of concealing the transport of NVOCC shipments and 
facilitating the movement of misdescribed cargoes.\16\ As shipper at 
origin, it appears that Sea Dragon and Transnation Co. had knowledge of 
the actual description of the commodities for which transportation was 
to be obtained, and were primarily responsible for misdescribing the 
shipments to the ocean common carrier. Likewise, at destination, it 
appears that the U.S. consignees and agents of Sea Dragon and 
Transnation Co. knew the actual commodities being shipped through their 
access to the NVOCC bills of lading. Accordingly, it appears that CES 
Express, Chin Express Services, OMNI-Freight, OEI, and Worldwide 
Container each participated with Sea Dragon in a scheme of knowingly 
and willfully obtaining ocean transportation of cargo for which the 
parties paid rates less than otherwise applicable.
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    \16\ Sea Dragon, Chin Express and possibly other U.S. 
respondents may have continued to engage in rate practices violative 
of section 10(a)(1) of the 1984 Act through at least May 1997, 
pursuant to an unfiled and improper connecting carrier agreement 
whereby Sea Dragon obtained the benefit of rates not filed in any 
tariff or service contract.
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    It further appears that other individuals knew of, and assisted or 
facilitated various shipments on behalf of Sea Dragon, for which 
transportation was obtained in violation of section 10(a)(1) of the 
1984 Act. Among these additional persons are Philip Yu with respect to 
Sea Dragon, CES Express, Chin Express Services and Pan Sharp; Christine 
Cheng with respect to CES Express and Chin Express Services; Yun Kei Lo 
with respect to CES Express and L & L Chain; Bonnie Yang with respect 
to Worldwide Container; and Power Hsu with respect to OEI and OMNI-
Freight. It further appears that other corporate entities, specifically 
Y & W Worldtrade, L & L Chain, CTL Maritime and Transnation Ltd., knew 
of, and assisted or facilitated various misdescribed shipments 
involving Sea Dragon.
    Section 10(b)(1), 46 U.S.C. app. 1709(b)(1), prohibits a common 
carrier from charging, collecting or receiving greater, less or 
different compensation for the transportation of property than the 
rates and charges set forth in its tariff. With respect to the above 
shipments in which Sea Dragon issued its own house bill of lading and 
collected freight from the consignees, it appears that Sea Dragon 
routinely has disregarded its filed tariff. Insofar as such shipments 
are representative of Sea Dragon's ongoing business, it would appear 
that later shipments under the connecting carrier agreement with 
Hyundai, and pursuant to Pan Sharp's service contract, likewise may be 
found to have applied rates other than those set forth in Sea Dragon's 
filed tariff, in violation of section 10(b)(1) of the 1984 Act.
    Transnation Co. similarly has routinely issued its own house bills 
of lading on numerous shipments, yet currently maintains a tariff, ATFI 
No. 012748-001, which contains only one rate, applicable to Cargo, NOS 
between the United States and Asia Countries. It therefore appears that 
Transnation Co. has not applied its filed tariff rate to any of its 
shipments transported during 1996 and 1997. Thus, it appears that 
Transnation Co. may have violated section 10(b)(1) of the 1984 Act.
    In addition, shipping records reflect that Transnation Shipping 
Ltd. and Pan Sharp International Ltd. both began operating as shippers 
prior to the time tariff or bonds were filed with respect to their 
services as NVOCCs. Transnation Ltd.'s tariff, ATFI No. 015124-001, did 
not become effective until December 4,

[[Page 12812]]

1997,\17\ and thus cannot account for shipments occurring as early as 
January 1996. Pan Sharp's ATFI tariff did not include any rates which 
were effective prior to September 5, 1997. Accordingly, it appears that 
Transnation Ltd. and Pan Sharp each charged rates not then effective 
for the NVOCC services provided, in apparent violation of section 8 of 
the 1984 Act and 46 CFR Part 514, and that they each operated as an 
NVOCC without benefit of the bond required by the 1984 Act, in apparent 
violation of section 23. In addition, it appears that Transnation Ltd. 
and Pan Sharp thereafter assessed and collected rates other than those 
set forth in their respective tariffs, in apparent violation of section 
10(b)(1) of the 1984 Act.
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    \17\ In any event, the Transnation Ltd. tariff contains only 
three commodity descriptions: Cargo, NOS (Premium Service); Cargo, 
NOS (Regular Service); and Cargo, NOS (Superior Service).
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    As first noted above, Sea Dragon purports to be a vessel-operating 
common carrier, yet no indication can be found that Sea Dragon in fact 
operates any vessels in the United States foreign commerce. Likewise, 
Transnation Co. purports to be a VOCC according to its tariff 
maintained in the Commission's ATFI system, but there are no records 
reflecting that Transnation Co. operates vessels. To the extent these 
firms are maintaining VOCC tariffs as a means of evading the NVOCC 
bonding and resident agent requirements, or as a device by which to 
obtain off-tariff rates pursuant to connecting carrier agreements, it 
should further be determined whether those tariffs should be canceled 
as violative of sections 8 and 23 of the 1984 Act and 46 CFR Part 514 
of the Commission's regulations.
    Now therefore, it is ordered, That pursuant to sections 8, 10, 11, 
13, and 23 of the 1984 Act, 46 U.S.C. app. 1707, 1709, 1710, 1712, and 
1721, an investigation is instituted to determine:
    (1) Whether Sea Dragon Navigation Ltd., CES Express Inc., Chin 
Express Services Inc., Pan Sharp International Ltd., L & L Chain Inc. 
and their respective principals, Philip Yu, Christine Cheng and Yun Kei 
Lo, violated section 10(a)(1) of the 1984 Act, 46 U.S.C. app. 
1709(a)(1), by obtaining transportation for property at less than the 
rates or charges applicable from the ocean common carriers furnishing 
the transportation;
    (2) Whether Y & W Worldtrade Inc., Transnation Shipping Co., 
Transnation Shipping Ltd., CTL Maritime (USA) Inc., O.E.I. 
International Inc., OMNI-Freight International Inc., Hwai Nien Hsu, 
Worldwide Container Line Inc. and Bonnie Yang violated section 10(a)(1) 
of the Shipping Act of 1984, 46 U.S.C. app. 1709(a)(1), by obtaining 
transportation for property at less than the rates or charges 
applicable from the ocean common carrier furnishing the transportation;
    (3) Whether Sea Dragon Navigation Ltd., Transnation Shipping Co., 
Transnation Shipping Ltd. and Pan Sharp International Ltd. violated 
section 10(b)(1) of the 1984 Act, 46 U.S.C. app. 1709(b)(1), by 
charging, demanding, collecting or receiving compensation for the 
transportation of property other than the rates and charges set forth 
in their respective tariffs;
    (4) Whether Transnation Shipping Ltd. and Pan Sharp International 
Ltd. violated section 8(a) of the 1984 Act, 46 U.S.C. app. 1707(a)(1), 
and 46 CFR Part 514 by providing common carrier services without having 
an effective tariff filed with the Commission;
    (5) Whether Sea Dragon Navigation Ltd., Transnation Shipping Co., 
Transnation Shipping Ltd. and Pan Sharp International Ltd. violated 
section 23 of the 1984 Act, 46 U.S.C. app. 1721, by operating as NVOCCs 
without filing the requisite NVOCC bond and designating a resident 
agent with the Commission;
    (6) Whether, in the event violations of sections 8, 10(a)(1), 
10(b)(1) and 23 of the 1984 Act are found, civil penalties should be 
assessed and, if so, the amount of penalties to be assessed against any 
or all of the parties;
    (7) Whether the tariffs of Transnation Shipping Co. and Sea Dragon 
should be canceled under sections 8 and 23 of the 1984 Act and 46 CFR 
Part 514;
    (8) Whether the tariffs of Pan Sharp International, Transnation 
Shipping Ltd., O.E.I. International Inc. and CTL Maritime (USA) Inc. 
should be suspended pursuant to sections 13 and 23 of the 1984 Act; and
    (9) Whether, in the event violations are found, an appropriate 
cease and desist order should be issued against any or all of the 
parties;
    It is further ordered, That a public hearing be held in this 
proceeding and that this matter be assigned for hearing before an 
Administrative Law Judge of the Commission's Office of Administrative 
Law Judges at a date and place to be hereafter determined by the 
Administrative Law Judge in compliance with Rule 61 of the Commission's 
Rules of Practice and Procedure, 46 CFR 502.61. The hearing shall 
include oral testimony and cross-examination in the discretion of the 
Presiding Administrative Law Judge only after consideration has been 
given by the parties and the Presiding Administrative Law Judge to the 
use of alternative forms of dispute resolution, and upon a 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 matters 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 Sea Dragon Navigation Ltd., CES Express 
Inc., Chin Express Services Inc., Pan Sharp International Ltd., L & L 
Chain Inc., Philip Yu, Christine Cheng, Yun Kei Lo, Y & W Worldtrade 
Inc., Transnation Shipping Co., Transnation Shipping Ltd., CTL Maritime 
(USA) Inc., O.E.I. International Inc., OMNI-Freight International Inc., 
Hwai Nien Hsu, Worldwide Container Line Inc. and Bonnie Yang are 
designated Respondents 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 a copy be served on 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 further 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; and
    It is further ordered, That in accordance with Rule 61 of the 
Commission's Rules of Practice and Procedure, the initial decision of 
the Administrative Law Judge shall be issued by March 11, 1999 and the 
final decision of the Commission shall be issued by July 9, 1999.

    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 98-6668 Filed 3-13-98; 8:45 am]
BILLING CODE 6730-01-M