[Federal Register Volume 63, Number 124 (Monday, June 29, 1998)]
[Notices]
[Pages 35228-35229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17141]


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FEDERAL MARITIME COMMISSION

[Docket No. 98-09]


Kin Bridge Express Inc. and Kin Bridge Express (U.S.A.) Inc.--
Possible Violations of Sections 8, 10(a)(1), 10(b)(1) and 23 of the 
Shipping Act of 1984; Order of Investigation and Hearing

    Kin Bridge Express Inc. (``Kin Bridge Taiwan'') is a tariffed and 
bonded non-vessel-operating common carrier (``NVOCC'') located at 
2nd Floor, No. 80, Section 2, Chang An East Road, Taipei 
10405, Taiwan. Kin Bridge Taiwan holds out to operate as an NVOCC 
pursuant to its tariff No. 015344-002, filed April 9, 1998. Wilson 
Chiao is President of Kin Bridge Taiwan.
    Kin Bridge Express (U.S.A.) Inc. (``Kin Bridge USA'') was, until 
April 18, 1998, a tariffed and bonded NVOCC located at 182-30 150th 
Road, Jamaica, New York 11413. Effective April 18, Kin Bridge USA 
canceled its NVOCC tariff and transferred its bond to Kin Bridge 
Taiwan.\1\ Kin Bridge USA continues to serve as U.S. destination agent 
for Kin Bridge Taiwan and as its designated resident agent for service 
of process. The President of Kin Bridge USA is Michael Hong.
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    \1\ Kin Bridge Taiwan maintains an NVOCC bond, No. 055326, in 
the amount of $50,000 with Washington International Insurance 
Company, Itasca, Illinois.
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    It appears that Kin Bridge Taiwan, acting as shipper on certain 
shipments on which it was doing business as NVOCC, participated in a 
scheme of commodity misdescriptions on at least 73 shipments 
transported by an ocean common carrier between January 7, 1996 and 
February 4, 1997. The shipments originated from Kin Bridge's offices in 
Taiwan and Hong Kong and were consigned to Kin Bridge USA in New York. 
Kin Bridge Taiwan issued a ``house,'' of NVOCC, bill of lading for each 
shipment for tender by the ultimate consignee to Kin Bridge USA upon 
arrival of the cargo.
    It further appears that Hanjin Shipping Co. and other ocean common 
carriers rated the commodities in accordance with the false cargo 
description furnished by Kin Bridge Taiwan, and its U.S. destination 
agent, Kin Bridge USA, accepted delivery of the cargo and made payment 
to the ocean carrier on the basis of the resulting lower rate. Other 
contemporaneous documentation, such as the arrival notice issued by Kin 
Bridge USA to the U.S. consignee, indicate that Kin Bridge USA and its 
principals knew that the shipments actually consisted of commodities 
different from those listed on the ocean common carrier's bills of 
lading.
    Moreover, it appears that the rates assessed and collected by Kin 
Bridge Taiwan and its U.S. agent Kin Bridge USA for these shipments 
bear no relation to the rates set forth in any Kin Bridge tariff then 
on file with the Commission. Prior to April 9, 1998, Kin Bridge Taiwan 
in fact had no tariff and no NVOCC bond; nonetheless it was actively 
engaged in negotiating and executing service contracts with Hanjin 
Shipping Co.\2\ and possibly other ocean common carriers prior to such 
date. Nor could the tariff of Kin Bridge USA set forth the applicable 
rates, because Kin Bridge USA only published a limited number of rates, 
which were applicable to its outbound NVOCC services.
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    \2\ Hanjin Service Contract No. 3852, and Hanjin Service 
Contract No. 5117, both signed by Kin Bridge Taiwan.
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    It further appear that, during the period January 1996 through 
April 1998, numerous outbound shipments were originated by Kin Bridge 
USA in its capacity as an NVOCC, which were destined to Kin Bridge USA 
agents in the Far East. Review of the ATFI tariff of Kin Bridge USA 
indicates that many of these shipments may not have been covered by 
outbound rates then on file in the tariff of Kin Bridge USA.

[[Page 35229]]

    Since Kin Bridge USA canceled its tariff on April 18, 1998, Kin 
Bridge Taiwan has maintained what many be characterized as a ``shell'' 
tariff, consisting of ten commodity descriptions, four of which are 
applicable to Cargo N.O.S. Only these latter Cargo N.O.S. rates apply 
to cargo inbound from the Far East. Kin Bridge Taiwan does not publish 
``per container'' rates for inbound cargo, nor does it appear likely 
that it charges those rates which it does publish, since these are 
assessed solely on a weight/measurement (W/M) ton basis. Nonetheless, 
it appears that Kin Bridge Taiwan is actively soliciting NVOCC cargo, 
and that it may not be assessing or collecting those rates set forth in 
its tariff.
    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 least 
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. Sections 8 and 23 of the 1984 Act, 46 
U.S.C. app. secs. 1707 and 1721, require that every NVOCC maintain a 
tariff and a bond. 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 
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 Kin Bridge Express Inc. and Kin Bridge Express (USA) 
Inc. violated section 10(a)(1) of the 1984 Act by directly or 
indirectly obtaining transportation at least than the rates and charges 
otherwise applicable through the means of misdescription of cargo;
    (2) Whether Kin Bridge Express Inc. and Kin Bridge Express (USA) 
Inc. 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 their 
respective NVOCC tariffs;
    (3) Whether Kin Bridge Express Inc. violated sections 8 and 23 of 
the 1984 Act by operating as a non-vessel-operating common carrier 
without having a tariff and bond on file with the Commission:
    (4) 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 such penalties;
    (5) Whether, in the event violations of sections 10(a)(1) and 
10(b)(1) of the 1984 Act are found, the tariff of Kin Bridges Express 
Inc. should be suspended; and
    (6) 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 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, deposition, 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 Kim Bridge Express Inc. and Kin Bridge 
Express (U.S.A.) Inc. 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 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, DC 20573, in accordance with Rule 118 
of the Commission's rules and 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 Procedures, the initial decision of 
the Administrative Law Judge shall be issued by June 23, 1999 and the 
final decision of the Commission shall be issued by October 21, 1999.

    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 98-17141 Filed 6-26-98; 8:45 am]
BILLING CODE 6730-01-M