[Federal Register Volume 63, Number 67 (Wednesday, April 8, 1998)]
[Notices]
[Pages 17180-17181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9142]



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FEDERAL MARITIME COMMISSION

[Docket No. 98-04]


Best Freight International Ltd., et al.; Possible Violations of 
Sections 10(a)(1) and 10(b)(1) of the Shipping Act of 1984

Order of Investigation and Hearing

    Best Freight International Ltd. (``Best Freight'') is a tariffed 
and bonded non-vessel-operating common carrier (``NVOCC'') located at 
5th Floor, Kam Sang Building, 255-257 Des Voeux Road Central, Sheung 
Wan in Hong Kong. Best Freight holds itself out as an NVOCC pursuant to 
its ATFI tariff FMC No. 014801-001, effective June 24, 1997.
    Best Freight currently maintains an NVOCC bond, No. 8941464, in the 
amount of $50,000 with the Washington International Insurance Company, 
located in Schaumburg, Illinois. Pursuant to Rule 24 of Best Freight's 
tariff, Washington, International Insurance Company also serves as the 
U.S. resident agent for purposes of receiving service of process on 
behalf of Best Freight International Ltd.
    Best Freight was established by former employees of Ever Freight 
International Ltd. (``Ever Freight''), a NVOCC which is the subject of 
a formal investigation of commodity misdescription activities in FMC 
Docket No. 97-04, Ever Freight International Ltd., et al., Possible 
Violations of Sections 10(a)(1) and 10(b)(1) of the Shipping Act of 
1984. Best Freight is currently operated by Chia Yao (``Gary'') Chen 
and Yu Fung (``Raymond'') Hau, both of whom actively managed Ever 
Freight's NVOCC activities which are at issue in the above docket. Best 
Freight's original anti-rebate certification bears the signature and 
title of Raymond Hau as ``Manager'' of Best Freight.
    Shortly after the inception of formal proceedings as to Ever 
Freight, Best Freight is believed to have been separately incorporated 
and to have begun operations as a NVOCC in its own right.\1\ During 
that period and at times subsequent to the filing of its tariff and 
bond, Best Freight participated in numerous apparent acts of 
misdescription of cargo on shipments from Hong Kong to the U.S.
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    \1\ Ever Freight's NVOCC bond was canceled by Washington 
International Insurance effective July 23, 1997. At this time, Ever 
Freight principals Gary Chen and Raymond Hau transferred their 
offices from the 18th Floor to the 5th Floor of the Kam Sang 
Building. It appears that their offices on the 18th Floor continue 
to be occupied by others formerly employed by Ever Freight, also 
operating as Best Freight.
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    The shipments at issue each originated in Hong Kong and were 
destined for the Los Angeles area. Best Freight was listed as shipper 
on the ocean carrier's bill of lading, and United Cargo Management 
(``UCM'') acted as the consignee or notify party. It appears that UCM's 
role was to serve as the initial destination agent on behalf of Best 
Freight, primarily to provide Best Freight with access to those rates 
available under UCM's existing service contract with Hyundai Merchant 
Marine Co. Ltd. (``Hyundai'') SC No. 95489.
    It further appears that Hyundai rated the commodities in accordance 
with the inaccurate description furnished by best Freight, while Best 
Freight's U.S. destination agents accepted delivery of the cargo and 
made payment to Hyundai on the basis of the lower rate attributable to 
such inaccurate commodity description. Other contemporaneous 
documentation, such as the arrival notice issued by Best Freight's 
agent to the U.S. consignee, reflects that Best Freight and its 
principals were fully cognizant that the shipments actually consisted 
of commodities different from those listed on Hyundai's bills of 
lading.
    Subsequent to the filing of Best Freight's NVOCC tariff and bond in 
June, 1997, it appears that Best Freight provided services as a carrier 
issuing its own (Best Freight) NVOCC bill of lading with respect to the 
commodity being shipped. The rates assessed and collected by Best 
Freight and its U.S. agents for these shipments, however, appear to 
bear no relation to the rates set forth in Best Freight's ATFI tariff 
on file with the Commission.\2\
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    \2\ Since filing its tariff in the ATFI system in June, 1997, 
Best Freight has maintained only a ``shell'' tariff consisting of 
three classes of Cargo N.O.S. rates. Best Freight does not publish 
``per container'' rates because its tariffed rates are set forth 
solely on a weight/measurement (W/M) ton basis. Nor does it appear 
to charge those N.O.S. rates which the NVOCC does publish.
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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, to 
obtain or attempt to obtain ocean transportation for property at less 
than the rates or charges that would otherwise be applicable. Section 
10(b)(1), 46 U.S.C. app. Sec. 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. Under section 13 of the 1984 Act, 46 
U.S.C. app. Sec. 1712, a person is subject to a civil penalty of not 
more than $25,000 for each violation knowingly and willfully committed, 
and not more than $5,000 for other violations.\3\ Section 13 further 
provides that a common carrier's tariff may be suspended for violations 
of section 10(b)(1) for a period not to exceed one year, while section 
23 of the 1984 Act, 46 U.S.C. app Sec. 1721 provides for a similar 
suspension in the case of violations of section 10(a)(1) of the 1984 
Act.
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    \3\ The maximum penalties are raised by 10 percent for 
violations occurring after November 7, 1996 See Inflation Adjustment 
of Civil Monetary Penalties, 27 S.R.R. 809 (1996).
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    Now therefore, it is ordered, That pursuant to sections 10, 11, 13 
and 23 of the 1984 Act, 46 U.S.C. app. Secs. 1709, 1710, 1712, and 
1721, an investigation is instituted to determine:
    (1) whether Best Freight International Ltd., Gary Chen, and Raymond 
Hau violated section 10(a)(1) of the 1984 Act by directly or indirectly 
obtaining transportation at less than the rates and charges otherwise 
applicable through the means of misdescription of the commodities 
actually shipped.
    (2) whether Best Freight International Ltd. violated section 
10(b)(1) of the 1984 Act by charging, demanding, collecting or 
receiving less or different compensation for the transportation of 
property than the rates and charges shown in its NVOCC tariff;
    (3) whether, in the event violations of sections 10(a)(1) and 
10(b)(1) of the 1984 Act are found, civil penalties should be assessed 
against Best Freight International Ltd., Gary/Chen, and Raymond Hau 
and, if so, the amount of penalties to be assessed;
    (4) whether, in the event violations of sections 10(a)(1) and 
10(b)(1) of the 1984 Act are found, the tariff of Best Freight 
International Ltd. should be suspended; and
    (5) whether, in the event violations are found, an appropriate 
cease and desist order should be issued.
    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 to the 
Presiding Administrative Law Judge only after consideration has been 
given by the parties and the Presiding Administrative Law Judge to the 
use of

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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 Best Freight International Ltd., Gary 
Chen, and Raymond Hau are designated as 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 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 25, 1999 and the 
final decision on the Commission shall be issued by July 26, 1999.

    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 98-9142 Filed 4-7-98; 8:45 am]
BILLING CODE 6730-01-M