[Federal Register Volume 64, Number 79 (Monday, April 26, 1999)]
[Notices]
[Page 20307]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10351]


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FEDERAL MARITIME COMMISSION

[Docket No. 99-07]


A.P. Moller-Maersk Line, Possible Violations of Sections 
10(b)(1), 10(b)(2), and 10(b)(4) of the Shipping Act of 1984; Order of 
Investigation and Hearing

    A.P. Moller-Maersk Line (``Maersk'') is a vessel-operating common 
carrier headquartered in Copenhagen, Denmark. In the United States, 
Maersk operates through Maersk, Inc., a wholly owned subsidiary. Maersk 
offers worldwide container services with approximately 70 vessels and 
offices in approximately 70 countries. As relevant here, Maersk 
provides regular liner service between the United States and South 
America and between the United States and points throughout the Far 
East and Asia.
    Based on evidence available to the Commission, it appears that 
during the period from 1996 to 1998, Maersk was involved in malpractice 
activities both in the South American as well as the Pacific Trades. In 
particular, it appears that in the South American Trades, Maersk paid 
rebates and made other freight concessions to several persons, 
including Non-Vessel-Operating Common Carriers (``NVOCCs''). It appears 
that Maersk engaged in such malpractices on hundreds of shipments over 
a significant period of time. In the Pacific Trades, it appears that 
Maersk collaborated with persons, including NVOCCs, in arrangements 
involving commodity and measurement misdescriptions thereby allowing 
those entities to obtain very substantial freight savings to which they 
were not entitled, in many instances, by misuse of rules and practices 
relating to equipment substitution.
    Section 10(b)(1) of the 1984 Act, 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 tariffs or service 
contracts. Section 10(b)(2) of the 1984 Act, 46 U.S.C. app. 1709(b)(2), 
provides that no common carrier may rebate, refund or remit in any 
manner, or by any device, any portion of its rates except in accordance 
with its tariffs or service contracts. Section 10(b)(4) of the 1984 
Act, 46 U.S.C. app. 1709(b)(4), prohibits any common carrier from 
allowing any person 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 ocean transportation 
for property at less than the rates or charges that would otherwise be 
applicable.
    Under section 13 of 1984 Act, 46 U.S.C. app. 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.\1\ Section 13 further provides that a common carrier's 
tariffs may be suspended for violations of sections 10(b)(1), 10(b)(2) 
or 10(b)(4) for a period not to exceed one year.
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    \1\ These penalties are increased 10 percent for any violations 
occurring after November 7, 1996. See, Inflation Adjustment of Civil 
Penalties, 61 Fed. Reg. 52704 (October 8, 1996).
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    Now therefore, it is Ordered, That pursuant to sections 10, 11 and 
13 of the 1984 Act, 46 U.S.C. app 1709, 1710, and 1712, an 
investigation is instituted to determine:
    (1) Whether Maersk 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 tariffs or service contracts;
    (2) Whether Maersk violated section 10(b)(2) of the 1984 Act by 
rebating, refunding or remitting a portion of its tariff or service 
contract rates;
    (3) Whether Maersk violated section 10(b)(4) of the 1984 Act by 
allowing persons to obtain transportation at less than the rates and 
charges otherwise applicable by an unjust or unfair device or means;
    (4) Whether, in the event violations of sections 10(b)(1), 10(b)(2) 
or 10(b)(4) of the 1984 Act are found, civil penalties should be 
assessed against Maersk and, if so, the amount of penalties to be 
assessed;
    (5) Whether, in the event violations of sections 10(b)(1), 10(b)(2) 
or 10(b)(4) of the 1984 Act are found, the tariff(s) of Maersk should 
be suspended;
    (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, 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 A.P. Moller-Maersk Line is designated 
Respondent 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 or 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 April 20, 2000, and the 
final decision of the Commission shall be issued by August 18, 2000.

    By the Commission.
Bryant L. VanBrakle,
Secrtary.
[FR Doc. 99-10351 Filed 4-23-99; 8:45 am]
BILLING CODE 6730-01-M