[Federal Register Volume 67, Number 132 (Wednesday, July 10, 2002)]
[Notices]
[Pages 45732-45733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17330]


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FEDERAL MARITIME COMMISSION

[Docket No. 02-09; FMC Agreement No. 011807]


Ocean Common Carrier Status of Shanghai Hai Hua Shipping Co., 
LTD. (HASCO) and SNL/HASCO Cross Space Charter and Sailing Agreement; 
Notice of Investigation and Hearing, Request for Additional Information 
and Order To Show Cause

    Notice is given that, on June 27, 2002, the Federal Maritime 
Commission (``Commission'') served an Order of Investigation and 
Hearing, Request for Additional Information and Order to Show Cause on 
Shanghai Hai Hua Shipping Co. Ltd. dba HASCO (``HASCO'') and Sinotrans 
Container Lines Co. Ltd. dba Sinolines (``Sinolines'').
    On May 29, 2002, counsel filed a Cross Space Charter and Sailing 
Agreement between HASCO and

[[Page 45733]]

Sinolines, FMC Agreement No. 011807 (the ``SNL/HASCO Agreement''). 
Under that agreement, the parties propose to share space on five 
vessels in a weekly service between U.S. Pacific ports and ports in 
Asia. It has been represented by filing counsel that Sinolines also 
proposes to time charter to HASCO one vessel to be deployed under the 
agreement. This latter aspect of the parties' cooperative working 
arrangement, i.e., the authorities and conditions under which Sinolines 
will sub-charter one vessel to HASCO, is not defined in the filed 
agreement.
    Under Section 4 of the Shipping Act of 1984 (``Shipping Act''), 
only agreements which are between or among ocean common carriers may be 
filed with the Commission pursuant to section 5 of the Shipping Act. 
Section 6(b) of the Shipping Act provides that the Commission shall 
reject any filed agreement that, after preliminary review, it finds 
does not meet the requirements of section 5 of the Shipping Act. See 
also, 46 CFR 535.401(c) and 535.601.
    It appears that HASCO may not be operating any vessels in the 
trades for which it has published a tariff, and that HASCO will not 
have commenced operating any vessel(s) prior to the effective date of 
the SNL/HASCO Cross Space Charter and Sailing Agreement. It also 
appears that HASCO does not anticipate operating any vessel or vessels 
in the U.S. trades independent of those operations to be furnished in 
conjunction with its agreement partner pursuant to the SNL/HASCO 
Agreement.
    HASCO's status as an ocean common carrier potentially has 
significant regulatory implications for the parties to the SNL/HASCO 
Agreement. In addition to providing HASCO with status as a VOCC for 
purposes of entering into agreements and service contracts, this 
arrangement may enable HASCO to avoid other regulatory requirements 
including those applicable generally to non-vessel-operating common 
carriers (``NVOCCs'').
    Under sections 4, 5 and 6 of the Shipping Act, the Commission has a 
duty to carefully examine not only the substantive lawfulness of the 
SNL/HASCO Agreement but also HASCO's eligibility as an ocean common 
carrier, as defined in section 3(16) of the Shipping Act, to enter into 
such an agreement. Under section 6(d) of the Shipping Act, the 
Commission may request additional information from the parties to an 
agreement in order to determine whether the agreement meets the 
requirements of sections 5 and 6 of the Shipping Act. The Commission 
has requested additional information from HASCO and Sinolines in 
response to questions transmitted to filing counsel pursuant to the 
Commission's rules at 46 CFR 535.606(e), so as to elicit evidence 
sufficient to determine whether HASCO qualifies as an ocean common 
carrier and hence, whether the proposed agreement may become effective 
under section 4 of the Shipping Act as an agreement ``by or among'' two 
ocean common carriers. By this action pursuant to section 6(c)(2) of 
the Shipping Act, 46 U.S.C. app. 1705, and 46 CFR 535.606(b), the 
effective date of the subject agreement modification may be delayed 
until 45 days after the Commission has received the parties' responses.
    The Commission therefore has instituted this investigation to 
determine whether HASCO is an ocean common carrier; whether the SNL/
HASCO Agreement should be disapproved if it is found that HASCO is not 
an ocean common carrier; whether the SNL/HASCO Agreement should be 
disapproved if it is found that the agreement, as filed, does not meet 
the requirements of 46 CFR 535.103(g); to show cause why HASCO's tariff 
No. 017636-001 should not be cancelled; and to show cause why HASCO 
should not be ordered to cease and desist doing business as a common 
carrier until such time as it provides proof to the Commission that it 
publishes and maintains a valid tariff as an non-vessel-operating 
common carrier and maintains a bond and resident agent as required by 
section 19 of the Shipping Act and Commission regulations.
    The full text of the Commission's Order is available on its website 
at http://www.fmc.gov. Any person having an interest in participating 
in this proceeding may a file petition for leave to intervene in 
accordance with Rule 72 of the Commission's Rules of Practice and 
Procedure, 46 CFR 502.72.

Bryant L. VanBrakle,
Secretary.
[FR Doc. 02-17330 Filed 7-9-02; 8:45 am]
BILLING CODE 6730-01-P