[Federal Register Volume 64, Number 136 (Friday, July 16, 1999)]
[Notices]
[Pages 38498-38499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18120]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration
[Docket No. MARAD-1999-5946]


Crowley American Transport, Inc.; Application for Approval of the 
Proposed Transfer of Maritime Security Program Operating Agreements 
(MA/MSP-13 Through MA/MSP-15)

    Counsel for Crowley American Transport, Inc. (Crowley) and American 
Automar, Inc. (Automar), by letter dated July 2, 1999, has notified the 
Maritime Administration (MARAD), of the proposed transfer of three 
Maritime Security Program (MSP) Operating Agreements (MA/MSP-13 through 
15) from Crowley to Automar International Car Carriers Inc. (AICC), a 
wholly-owned subsidiary of Automar, pursuant to section 652(j) of the 
Merchant Marine Act of 1936, as amended (Act). Crowley was awarded 
three MSP Operating Agreements for the U.S.-flag vessels, SEA FOX, SEA 
LION and SEA WOLF on December 20, 1996.
    Automar has entered into an agreement with Crowley, whereby Automar 
or its wholly-owned subsidiaries will purchase certain container vessel 
assets of Crowley. The assets will include the two vessels formerly 
known as the SEA LION and SEA WOLF (renamed ``LTC CALVIN P. TITUS'' and 
``SP 5 ERIC G. GIBSON'' respectively), which had been operating under 
MSP contracts, but are now intended to be operated under long-term 
contract to the U.S. Navy commencing in July 1999. Additionally, 
Crowley and Automar propose that certain related vessel assets and the 
three referenced MSP Operating Agreements be transferred from Crowley 
to Automar.
    With respect to the transfer of MSP Operating Agreements, section 
652(j) of the Act provides that ``A contractor under an operating 
agreement may transfer the agreement (including all rights and 
obligations under the agreement) to any person eligible to enter into 
that Operating Agreement under this subtitle after notification of the 
Secretary [of Transportation] in accordance with regulations prescribed 
by the Secretary, unless the transfer is disapproved by the Secretary 
within 90 days after the date of notification. A

[[Page 38499]]

person to whom an Operating Agreement is transferred may receive 
payments from the Secretary under the agreement only if each vessel to 
be covered by the agreement after the transfer is an eligible vessel 
under section 651(b).''
    Assuming MARAD does not disapprove the proposed transfer within 90 
days of its acceptance of the completed application, Crowley and 
Automar have stated their intention to transfer MSP Operating Agreement 
MA/MSP-13 from the SEA FOX to the FAUST and MA/MSP-14 from the SEA LION 
to the FIDELIO. The FAUST and FIDELIO are existing U.S.-flag roll-on/
roll-off (Ro/Ro) vessels and Automar has asserted that they are MSP 
eligible vessels under section 651(b) of the Act. Crowley and Automar 
have advised that this transfer is scheduled to occur on or before 
August 20, 1999. The third MSP Operating Agreement proposed for 
transfer is MA/MSP-15 from the SEA WOLF to the Ro/Ro vessel TANABATA, 
or an equivalent vessel, which is asserted to be an eligible vessel 
under section 651(b) of the Act, and would be reflagged to U.S.-
registry no later than March 31, 2000.
    In implementing the transaction, it is asserted that under a U.S. 
citizen owner trust structure, the vessels will be bareboat chartered 
to Automar's subsidiary (AICC) which will then time charter the FAUST, 
FIDELIO and TANABATA to American Roll-On Roll-Off Carrier LLC (ARC), a 
Delaware limited liability company, which will engage American V. Ships 
Marine, Ltd. (V Ships), to provide technical and management support to 
operate the FAUST, FIDELIO, TANABATA. These three vessels and a fourth 
existing U.S.-flag, non-MSP Ro/Ro vessel, the TELLUS, will be operated 
in U.S.-flag commercial service between the United States and Europe.
    The application contains reference to section 804 of the Act 
concerning foreign-flag vessels which call on the United States and 
which are owned or chartered by a foreign corporation with connections 
to Automar. Automar asserts that the foreign involvement is limited to 
Fram Shipping Limited (Fram), a Bermuda corporation, which owns or 
charters foreign-flag vessels that may call on the United States from 
time to time, and which owns approximately 20 percent of the issued and 
outstanding shares of common stock of Automar. A foreign citizen 
director of Fram is also a director of Automar, however, the 
application states that Fram is only a portfolio investor and does not 
have the ability to divert any MSP payments to the foreign corporation 
or elect any director to Automar's board. Automar asserts that there is 
not sufficient foreign affiliation to require the application of 
section 804 restrictions.
    Crowley and Automar have requested that MARAD allow the proposed 
transfers to become effective in accordance with the application and 
pursuant to law. This notice invites comments on legal and policy 
issues that may be raised by the Crowley and Automar proposal relating 
to the sale of the ships and the transfer of the three subject MSP 
Operating Agreements. MARAD has received one comment in advance of this 
notice, questioning whether one or more MSP contracts may be 
transferred without a simultaneous transfer of the vessel operated 
under that contract (namely SEA FOX) to the same purchaser.
    A redacted copy of the transfer application will be available for 
inspection at the DOT Dockets Facility and on the DOT Dockets website 
(address information follows). Any person, firm, or corporation having 
an interest in this proposal and desiring to submit comments concerning 
the application may file comments as follows. You should mention the 
docket number that appears at the top of this document. You should 
submit your written comments to the Docket Clerk, U.S. DOT Dockets, 
Room PL-401 Nassif Building, Department of Transportation, 400 Seventh 
Street, S.W., Washington, DC 20590. Comments may also be submitted by 
electronic means via the Internet at http://dmses.dot.gov/sub-
mit/. All comments will become part of the docket. You may call Docket 
Management at (202) 366-9324. You may visit the docket room to inspect 
and copy comments at the above address between 10 a.m. and 5 p.m., EDT. 
Monday through Friday, except Holidays. An electronic version of this 
document is available on the World Wide Web at http://dms.dot.gov. 
Comments must be received no later than the close of business on July 
23, 1999. This notice is published as a matter of discretion, and the 
fact of its publication should in no way be considered a favorable or 
unfavorable decision on the application, as filed, or as may be 
amended. MARAD will consider any comments timely submitted and take 
such action with respect thereto as may be deemed appropriate.

    Dated: July 12, 1999.

    By Order of the Maritime Administration.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 99-18120 Filed 7-15-99; 8:45 am]
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