[Federal Register Volume 63, Number 184 (Wednesday, September 23, 1998)]
[Notices]
[Pages 50911-50912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25405]


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FEDERAL MARITIME COMMISSION

[Docket No. 98-16]


Eastern Mediterranean Shipping Corp. d/b/a Atlantic Ocean Line 
and Anil K. Sharma Possible Violations of Sections 10(a)(1), 10(b)(1) 
and 10(d)(1) of the Shipping Act of 1984; Order of Investigation and 
Hearing

    Eastern Mediterranean Shipping Corp. (``Eastern''), also doing 
business as Atlantic Ocean Line,\1\ is a tariffed and bonded NVOCC 
located at 990 Avenue of the Americas, Suite 6E, New York, NY 10018. 
Eastern holds itself out as an NVOCC pursuant to its ATFI tariff FMC 
No. 013236-001, effective December 12, 1995. Eastern currently 
maintains an NVOCC bond, No. 8941330, in the amount of $50,000 with the 
Washington International Insurance Company, located in Schaumburg, 
Illinois.
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    \1\ Although Eastern currently uses Atlantic Ocean Line as a d/
b/a, the principal of Eastern started Atlantic Ocean Line Corp., 
ATFI org. number 014201, in 1996 as a separately tariffed and bonded 
NVOCC. It appears that Atlantic Ocean Line Corp. operated, until 
recently, from the same office as Eastern.
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    Eastern was incorporated in 1994, and Anil (a.k.a. ``Andy'') K. 
Sharma, who owns 100% of the company stock, is the President and Chief 
Executive Officer. Sharma currently manages Eastern, and is actively 
involved in the company's day to day operations as an NVOCC.
    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. It 
appears that Eastern has knowingly and willfully misdeclared cargo 
shipments in order to obtain favorable rates under a service contract 
entered into with Zim Israel Navigation Co. Ltd. (``Zim''). For the 
shipments at issue, Eastern's house bills of lading properly declared 
the commodity being shipped. However, the master bills of lading issued 
by the carrier show that Eastern declared a different commodity for the 
same shipment. Zim rated the commodities in accordance with the 
inaccurate description furnished by Eastern. In each instance, Eastern 
changed the declaration from a commodity not listed in the service 
contract, to a commodity that was contained therein. Eastern was named 
as shipper on all of Zim's bills of lading, and therefore had knowledge 
of the actual commodity for which transportation was obtained. Other 
documentation, such as invoices, rate quotes, booking confirmations and 
shipper's export declarations reflect that Eastern and its principals 
were apparently cognizant that the shipments actually consisted of 
commodities different from those listed on Zim's bills of landing.
    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. It appears that Eastern did 
not charge the rates set forth in its tariff on numerous shipments, 
filed tariff amendments subsequent to the shipment taking place, and in 
other instances failed to file a commodity rate at all. Eastern also 
filed commodity rates under the wrong commodity description, making 
them inapplicable to the shipments involved. It further appears Eastern 
also improperly assessed surcharges not filed in its tariff.
    Section 10(d)(1), 46 U.S.C. app. Sec. 1709(d)(1), states that no 
common carrier may fail to establish, observe and enforce just and 
reasonable regulations and practices relating to or connected with 
receiving, handling, storing, or delivering property. It appears 
Eastern has failed to establish and observe reasonable practices in 
receiving and delivering property entrusted to it by its customers. The 
Commission's Office of Informal Inquiries and Complaints and Informal 
Dockets, has received over 40 complaints in the last two years from 
shippers and freight forwarders who have dealt with Eastern. The 
complaints include instances such as Eastern failing to pay ocean 
freight to the ocean common carrier, failing to respond to requests for 
information about shipments, as well as failing to release bills of 
lading once freight has been paid. Furthermore, it appears that Eastern 
repeatedly fails to notify shippers regarding sailing schedules and 
vessel names, provides deceptive information about the location of 
cargo and fails to deliver cargo as promised. As a direct result of 
Eastern's failure to perform its duties as an NVOCC, shippers 
experience frustration and anxiety over losing their business 
reputation as well as lost revenue in correcting the problems caused by 
Eastern.
    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.\2\ 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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    \2\ The maximum penalties are raised by 10 percent for 
violations occurring after November 7, 1996. See Inflation 
Adjustment of Civil Monetary Penalties, 276 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 Eastern Mediterranean Shipping Corp. and/or Anil K. 
Sharma violated section 10(a)(1) of the 1984 Act by directly or 
indirectly obtaining

[[Page 50912]]

transportation at less than the rates and charges otherwise applicable 
through the means of misdescription of the commodities actually 
shipped;
    (2) Whether Eastern Mediterranean Shipping Corp. 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 Eastern Mediterranean Shipping Corp. violated section 
10(d)(1) of the 1984 Shipping Act by failing to establish, observe and 
enforce just and reasonable regulations and practices relating to or 
connected with receiving, handling, storing, or delivering property;
    (4) Whether, in the event violations of sections 10(a)(1), 10(b)(1) 
and 10(d)(1) of the 1984 Act are found, civil penalties should be 
assessed against Eastern Mediterranean Shipping Corp. and/or Anil K. 
Sharma and, if so, the amount of penalties to be assessed;
    (5) Whether, in the event violations of sections 10(a)(1) or 
10(b)(1) of the 1984 Act are found, the tariff of Eastern Mediterranean 
Shipping Corp. 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 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 statement, affidavits, depositions, or other 
documents or that the nature of the matters in issue in such that an 
oral hearing and cross-examination are necessary for the development of 
an adequate record.
    It is further ordered, That Eastern Mediterranean Shipping Corp. 
and Anil K. Sharma 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 service 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 September 18, 1999 and 
the final decision of the Commission shall be issued by January 18, 
2000.

    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 98-25405 Filed 9-22-98; 8:45 am]
BILLING CODE 6730-01-M