[Federal Register Volume 72, Number 191 (Wednesday, October 3, 2007)]
[Rules and Regulations]
[Pages 56272-56273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-19464]


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FEDERAL MARITIME COMMISSION

46 CFR Part 515

[Docket No. 07-06]
RIN 3072-AC33


Amendment to Regulations Governing the Filing of Proof of 
Financial Responsibility

September 27, 2007.
AGENCY: Federal Maritime Commission.

ACTION: Final Rule.

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SUMMARY: The Federal Maritime Commission (``FMC'' or ``Commission'') 
amends its regulations governing proof of financial responsibility for 
ocean transportation intermediaries (``OTIs'') required to be filed 
prior to commencement of OTI services. The amendment reduces the amount 
of time an applicant has to file the requisite proof of financial 
responsibility from two years to 120 days, after approval of the 
applicant's license application. Upon expiration of the 120-day time 
period, if valid proof of financial responsibility has not been 
provided by the applicant, its OTI application will be considered 
invalid. Applications approved prior to the effective date of this 
Final Rule will continue to be subject to the two-year time period to 
submit valid proof of financial responsibility.

DATES: Effective November 5, 2007.

FOR FURTHER INFORMATION CONTACT: Sandra L. Kusumoto, Director, Bureau 
of Certification and Licensing, Federal Maritime Commission, 800 N. 
Capitol Street, NW., Room 970, Washington, DC 20573-0001.(202) 523-
5787, e-mail: [email protected].
    Amy W. Larson, General Counsel, Office of the General Counsel, 
Federal Maritime Commission, 800 N. Capitol Street, NW., Room 1018, 
Washington, DC 20573-0001. (202) 523-5740, e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION: The Commission published a Notice of 
Proposed Rulemaking (``NPRM'') on July 25, 2007, in the Federal 
Register, 72 FR 40813-14, to amend its regulations at 46 CFR 515.25(a) 
to require an applicant for an OTI license to provide valid proof of 
financial responsibility within 120 days of approval of its 
application, prior to issuance of a license by the Commission's Bureau 
of Certification and Licensing. The current regulation allows an 
applicant two years from the date of approval in which to furnish proof 
of financial responsibility, failing which the application will be 
considered invalid by the Commission.
    The Commission proposed this change for two reasons. First, if 
applicants illegally provide OTI services in the two years following 
approval but before procurement of financial responsibility, the 
statutory goal of protecting the shipping public is frustrated. Second, 
applicants' inability or unwillingness to procure financial 
responsibility may indicate questionable financial integrity, a key 
factor in establishing an applicant's fitness to perform OTI 
activities.
    BCL staff analysis shows that the majority of new applicants obtain 
surety bonds within 120 days or less. Therefore, reducing the time for 
providing proof of valid financial responsibility to 120 days is 
unlikely to burden OTI applicants.
    The Commission received two comments to its NPRM. The 
Transportation Intermediaries Association (``TIA''), whose members 
include OTIs, supports the Commission's proposal to reduce the amount 
of time from two years to 120 days. TIA states that its member 
companies are put at a competitive disadvantage when other OTIs do not 
comply with laws or regulations. The National Industrial Transportation 
League (``NITL'') also provided comments in support of the NPRM. NITL's 
members include OTIs and entities that use the services of OTIs. Both 
TIA and NITL believe that reducing the time for OTI applicants to 
provide proof of responsibility prior to offering OTI services will 
better protect the shipping public.
    OTI applicants whose applications were approved prior to the 
effective date of the Final Rule will continue to have two years from 
approval in which to furnish proof of financial responsibility. If no 
proof is furnished within this period, the OTI application would be 
considered invalid, thereby requiring the filing of a new application. 
Any new application will be subject to the 120-day period for filing 
evidence of financial responsibility.
    In addition, the Commission amends 46 CFR 515.25(a) by deleting 
reference to supplementary investigations for the determination of an 
applicant's continued qualification, if more than six months elapse 
between approval of the application and an applicant's submission of 
financial responsibility to the Commission. The supplementary 
investigations will become unnecessary due to the reduction of time the 
applicant is permitted to obtain financial responsibility. Removal of 
the option of supplementary investigation from 46 CFR 515.25(a) 
likewise necessitates removing paragraph 515.5(b)(3), since the 
collection of fees for supplementary investigations will no longer be 
applicable.
    This rule is not a ``major rule'' under 5 U.S.C. 804(2) and 
therefore is not subject to review by the Office of Management and 
Budget's Office of Information and Regulatory Affairs.
    In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq., the Federal Maritime Commission has certified to the Chief 
Counsel for Advocacy, Small Business Administration, that the rule will 
not have a significant impact on a substantial number of small 
entities. The rule directly applies to the licensing requirements of 
OTIs, which are regulated persons (or businesses) under the 
Commission's jurisdiction and

[[Page 56273]]

which qualify as small entities under the guidelines of the Small 
Business Administration. The rule will decrease the amount of time an 
applicant has to file the requisite proof of financial responsibility 
upon approval of applicant's license application, from two years to 120 
days. The modifications in the rule will simplify the OTI licensing 
application process and increase administrative efficiency, while 
further serving to safeguard the shipping public from unlicensed 
operators. The rule imposes no new or additional cost burden on persons 
applying for an OTI license, nor will it have a harmful effect on the 
general public, the U.S. economy, or any of the regulated entities 
under the jurisdiction of the Commission. In its NPRM, the Commission 
stated its intention to certify this rulemaking. No comments from 
interested parties contested the Commission's certification. Thus, the 
rule is hereby certified.
    The rule contains no additional information collection or 
recordkeeping requirements. Therefore, the requirements of the 
Paperwork Reduction Act, 44 U.S.C. 3501 et seq., do not apply.

List of Subjects in 46 CFR Part 515

    Common carriers, Exports, Non-vessel-operating common carriers, 
Ocean transportation intermediaries, Financial responsibility 
requirements, Reporting and recordkeeping requirements, Surety bonds.

0
Accordingly, the Federal Maritime Commission amends 46 CFR part 515 as 
follows:

PART 515--LICENSING, FINANCIAL RESPONSIBILITY REQUIREMENTS, AND 
GENERAL DUTIES FOR OCEAN TRANSPORTATION INTERMEDIARIES

0
1. The authority citation for part 515 is revised to read as follows:

    Authority: 5 U.S.C. 553; 31 U.S.C. 9701; 46 U.S.C. app. 1702, 
1707, 1709, 1710, 1712, 1714, 1716, and 1718 (recodified October 
2006 as 46 U.S.C. 305, 40102, 40104, 40501-40503, 40901-40904, 
41101-41106, 41107-41109, 41301-41302, 41305-41307, 42101, and 
42301-42307); Pub. L. 105-383, 112 Stat. 3411; 21 U.S.C. 862.


Sec.  515.5  [Amended]

0
2. In Sec. 515.5, remove paragraph (b)(3).

0
3. Amend Sec. 515.25(a) by removing the fourth sentence and revising 
the last sentence to read as follows:


Sec.  515.25  Filing of proof of financial responsibility.

    (a) * * * Should the applicant not file the requisite proof of 
financial responsibility within 120 days of notification, the 
Commission will consider the application to be invalid.
* * * * *

    By the Commission.
Bryant L. VanBrakle,
Secretary.
[FR Doc. E7-19464 Filed 10-2-07; 8:45 am]
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