[Federal Register Volume 79, Number 197 (Friday, October 10, 2014)]
[Proposed Rules]
[Pages 61544-61561]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24003]



[[Page 61543]]

Vol. 79

Friday,

No. 197

October 10, 2014

Part IV





 Federal Maritime Commission





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46 CFR Part 515





Ocean Transportation Intermediary Licensing and Financial 
Responsibility Requirements, and General Duties; Proposed Rule

  Federal Register / Vol. 79 , No. 197 / Friday, October 10, 2014 / 
Proposed Rules  

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FEDERAL MARITIME COMMISSION

46 CFR Part 515

[Docket No. 13-05]
RIN 3072-AC44


Ocean Transportation Intermediary Licensing and Financial 
Responsibility Requirements, and General Duties

AGENCY: Federal Maritime Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Maritime Commission proposes to amend its rules 
governing the licensing, financial responsibility requirements and 
duties of Ocean Transportation Intermediaries. The proposed rule is 
intended to adapt to changing industry conditions, improve regulatory 
effectiveness, improve transparency, streamline processes and reduce 
regulatory burdens.

DATES: Comments are due on or before December 12, 2014.

ADDRESSES: Address all comments concerning this proposed rule to:
Karen V. Gregory, Secretary,
Federal Maritime Commission,
800 North Capitol Street NW.,
Washington, DC 20573-0001,
Phone: (202) 523-5725,
Email: [email protected].

FOR FURTHER INFORMATION CONTACT:
Vern W. Hill, Managing Director,
Office of the Managing Director,
Federal Maritime Commission,
800 North Capitol Street NW.,
Washington, DC 20573-0001,
Tel.: (202) 523-5800,
Email: [email protected].

SUPPLEMENTARY INFORMATION:
    Submit Comments: Include in the subject line: Docket No. 13-05, 
Comments on Ocean Transportation Intermediary Regulation Revisions. 
Non-confidential filings may be submitted in hard copy or as a 
Microsoft Word or PDF attachment addressed to [email protected]. 
Confidential filings must be accompanied by a transmittal letter that 
identifies the filing as ``confidential'' and describes the nature and 
extent of the confidential treatment requested. Any comment that 
contains confidential information must consist of the complete filing 
and be marked by the filer as ``Confidential-Restricted,'' with the 
material claimed to be confidential clearly marked on each page. A 
public version must be submitted with the confidential version if 
applicable. The Commission will provide confidential treatment to the 
extent allowed by law for submissions, or parts of submissions, for 
which the filer requests confidentiality. Questions regarding filing or 
treatment of confidential responses to this notice should be directed 
to the Commission's Secretary, Karen V. Gregory, at the telephone 
number or email provided in this notice.

Background

    In 1998, Congress passed the Ocean Shipping Reform Act (OSRA), 
Public Law 105-258, 112 Stat. 1902, amending the Shipping Act of 1984 
in several respects relating to ocean freight forwarders (OFFs) and 
non-vessel-operating common carriers (NVOCCs), defining both as ocean 
transportation intermediaries (OTIs). The Commission thereafter adopted 
new regulations at 46 CFR Part 515 to implement changes effectuated by 
OSRA. Licensing, Financial Responsibility Requirements, and General 
Duties for Ocean Transportation Intermediaries, 28 SRR 629-654 (March 
8, 1999). (Docket No. 98-28 Final Rule).
    On May 21, 2013 the Commission published an Advance Notice of 
Proposed Rulemaking (ANPR) proposing the first significant 
modifications to Part 515 in fourteen years. 78 FR 32946, May 31, 2013. 
The Commission received over eighty comments from the public within the 
extended comment closing date. Though OTIs submitted the largest number 
of comments, significant comments were also submitted by associations 
of OTIs, vessel operating common carriers (VOCCs), groups of VOCCs, 
individual financial responsibility providers and surety associations. 
After reviewing the comments and identifying provisions that had drawn 
strong views from a sizeable number of OTIs and others, the Commission 
determined to make the following changes in the modifications proposed 
in the ANPR:
     Drop all proposed financial responsibility increases. ANPR 
section 515.21. The current required levels will remain unchanged.
     Eliminate new potential qualifications specified for OTIs 
and their Qualifying Individuals (QIs). ANPR sections 515.2(p), 
515.11(a)(1)-(2), (b), (c), (e). Also dropped the proposed shortened 
deadline for replacing a QI after the QI's death, retirement or 
resignation. ANPR section 515.20(c). The current 30-day requirement to 
replace a QI is retained.
     Remove the proposed additional bases specified for 
revocation or suspension of licenses (ANPR section 515.16) and 
termination or suspensions of registrations of foreign-based NVOCCs 
(ANPR section 515.19(g)).
     Delete the proposed tiered claim and claim processing 
system that would give shippers priority to the proceeds of an OTI's 
financial responsibility. ANPR section 515.23(c)-(d). The current rules 
covering claims and claim processing remain unchanged. The requirement 
in ANPR section 515.21(a)(4), that OTIs restore their financial 
responsibility to the full required amount within 60 days of a claim 
being paid against it, is also dropped.
     Eliminate draft requirements on common carriers and marine 
terminal operators to notify the Commission of their court or other 
transportation claims against OTIs, as well as the requirement that 
such notifications would be published on the Commission's Web site. 
ANPR section 515.23(e)-(f).
     Delete the proposed added documentation requirements for 
OTIs and agents (ANPR section 515.31(a) and (c)), including a 
requirement for agency agreements to be in writing (ANPR section 
515.31(k)).
     Remove the potential provision establishing a rebuttable 
presumption that an agent acts on its own behalf if it does not include 
the name and license or registration number of an OTI on documents the 
agent issues. ANPR section 515.23(a).
     Drop the proposed new requirements on OTIs to include 
their license and registration numbers in their advertisements and to 
require their agents to include their principals' names and addresses 
in their advertising. ANPR section 515.31(j)(1).
     Remove a new requirement on OTIs and agents not to include 
false or misleading information in advertisements. ANPR section 
515.31(j)(2).
     Remove proposed provision establishing a rebuttable 
presumption that an entity has performed the services it advertised. 
ANPR section 515.31(j)(3).
     Delete the term ``Advertisement'' in ANPR section 
515.2(a), as a consequence of the elimination of ANPR section 
515.31(j).
     Drop fees for renewals of OTI licenses and registrations.
     Drop the proposal for a Certificate of Good Standing to be 
submitted for renewals.
    The Commission determined to drop from this proceeding further 
consideration of a new NVOCC license category for those operating only 
in the household goods trade. Features of such a license category would 
be a lower financial responsibility requirement, tailored standards for 
such OTIs, and the development of guidelines for such a separate 
license category. Such a

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license category was included as one of a number of recommendations 
adopted by the Commission with respect to its consideration of the 
Final Report for Fact Finding Investigation No. 27, Potentially 
Unlawful, Unfair or Deceptive Ocean Transportation Practices Related to 
the Movement of Household Goods or Personal Property in U.S.-Foreign 
Oceanborne Trades. Other suggestions deemed beyond the scope of the 
changes proposed for the Commission's OTI regulations will not be 
considered for purposes of this NOPR.

The Notice of Proposed Rulemaking

    The modifications in this NOPR address changes in industry 
conditions, streamline internal processes, improve transparency, and 
remove unwarranted regulatory burdens. The NOPR also reflects the 
Commission's experience in implementing the current regulations since 
1999, and addresses issues and questions that have arisen over time.
    The NOPR includes several issues first addressed in the ANPR:
     Carries forward requirements for renewal of licenses and 
registrations but the frequency is changed to every three years (from 2 
years), and provides that renewal forms will be entirely on-line and 
user-friendly.
     Carries forward the requirement that common carriers 
verify OTI licenses and registrations, tariff publication and financial 
responsibility, provided such verifications can be made at a single 
location on the Commission's Web site.
     Carries forward a new expedited hearing procedure, subject 
to the following provisions: (1) The procedure will not result in 
summary revocations, terminations or suspensions; (2) a licensee must 
be given notice and a hearing for failure to renew; and, (3) appeals to 
the Commission remain available for adverse decisions.
    Significant proposed changes are discussed below.

Subpart A--General

Section 515.2--Definitions

    The Commission proposes to remove several definitions that are no 
longer relevant to the Commission's regulatory activities, including 
``ocean freight broker'' (Sec.  515.2(n)), ``brokerage'' (Sec.  
515.2(d)) and ``small shipment'' (Sec.  515.2(u)).
    In addition, the Commission proposes modifying the definition of 
``person'' (Sec.  515.2(n)). The revised definition not only conforms 
to the definition of ``person'' in 1 U.S.C. 1, but also specifically 
includes ``limited liability companies,'' while retaining the current 
language that entities covered are those ``existing under or authorized 
by the laws of the United States or of a foreign country.''
    The definition of ``principal'' (Sec.  515.2(o)) is revised to make 
it more concise and is not intended to change its meaning or scope. 
This definition has been carried forward over the decades substantially 
unchanged but always limited in focus to principals of licensed ocean 
freight forwarders. It was first promulgated pursuant to the Shipping 
Act, 1916, as amended, and carried forward in regulations implementing 
the Shipping Act of 1984 and OSRA.
    It is significant that the type of principal referred to in this 
definition is the person or entity to whom a licensed ocean freight 
forwarder owes a fiduciary duty. In contrast, the use of the word 
``principal'' in these regulations is focused upon an OTI's status 
(whether an NVOCC or a licensed ocean freight forwarder) as the 
principal with respect to the various types of agents that the OTI may 
employ to carry on its business.
    The absence of a definition for ``principal'' where it refers to an 
OTI acting as the principal is consistent with the Commission's 
decision in 1999 not to define the term agent when implementing the 
OSRA amendments. There the Commission reasoned that defining ``agent'' 
was unnecessary ``because the term is used . . . to reflect the large 
body of agency law. The Commission does not want to inappropriately 
alter that definition, thus limiting or conflicting with the law relied 
on by the shipping industry in applying these regulations.'' Docket No. 
98-28 Final Rule, supra at 28 SRR 651. The Commission adheres to its 
prior view that there is no need to further define the term 
``principal'' in such contexts.
    The definitions of ``freight forwarding services'' (Sec.  515.2(h)) 
and ``non-vessel-operating common carrier services'' (Sec.  515.2(k)) 
are also revised to better reflect OTIs' current practices and 
terminology. For example, ``freight forwarding services'' are revised 
to include preparation of ``export documents, including required 
`electronic export information,' '' rather than being limited to 
preparation of paper-based export declarations (Sec.  515.2(h)(2)). OFF 
and NVOCC services are both revised to include preparation of ocean 
common carrier and NVOCC bills of lading ``or other shipping 
documents'' (Sec.  515.2(h)(5) and Sec.  515.2(k)(4)). The change 
ensures that the services cover preparation of the documents pursuant 
to which cargo is transported whether or not they are ``equivalent'' to 
ocean bills of lading, as provided in the current definition of 
``freight forwarding services.'' 46 CFR Sec.  515.2(h)(5).
    As indicated above, the ANPR definition of ``advertisement'' in 
section 515.2(a) is deleted as unnecessary, consistent with the 
deletion of ANPR section 515.31(j). Proposed section 515.2(a) contains 
the definition of ``Act or Shipping Act of 1984.'' These alternative 
references to the Commission's governing statute, as recodified into 
positive law in 2006, appear throughout Part 515.
    The definition of ``registered non-vessel-operating common 
carrier'' is new. It identifies NVOCCs that are located outside of the 
United States and opt to register rather than to obtain a license.
    The term ``qualifying individual'' is added and defines QI as an 
individual who meets the Shipping Act's experience and character 
requirements. The QI must meet those requirements at the time a license 
is issued and must thereafter maintain the necessary character. The OTI 
must timely replace the QI, as provided by the Commission's rules, when 
the designated QI ceases to act as the QI, whether by resignation, 
retirement or death.

Section 515.3--License; When Required

    This section is modified to delete, as unneeded, a requirement that 
``separately incorporated branch offices'' must be licensed when they 
serve as agent of a licensed OTI. All separately incorporated entities 
that perform OTI services, for which they assume responsibility for the 
transportation, are covered by the requirements that they be licensed 
and otherwise comply with the financial responsibility obligations of 
Part 515. The Commission also deletes the requirement that only 
licensed intermediaries in the United States may perform OTI services 
on behalf of ``an unlicensed ocean transportation intermediary'' (i.e., 
foreign-based NVOCC), substituting in its stead the requirement that 
``registered NVOCC[s]'' must use licensed OTIs as agents in the United 
States with respect to OTI services performed in the United States.

Section 515.4--License; When Not Required

    Section 515.4(b)--Branch Offices. The Commission proposes to 
eliminate the regulatory burden associated with procuring and 
maintaining additional financial responsibility to cover an OTI's 
unincorporated branch offices by

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deleting the reference to obtaining additional financial responsibility 
currently set out in section 515.4(b)(ii). A corresponding change is 
made to section 515.21 by deleting the current text of paragraph 
515.21(a)(4). The rule also proposes to delete section 515.4(d), which 
refers to ocean freight brokers, as it is no longer needed.

Section 515.5--Forms and Fees

    Section 515.5(b) is modified to provide that all license 
applications and registration forms must be filed with the Commission 
electronically unless a waiver request to file on paper is granted by 
the Director of the Bureau of Certification and Licensing. Electronic 
filing anticipates the implementation of on-line filing and processing 
of all applications and forms.
    Section 515.5(c)(1) has been added and requires OTIs to pay 
applicable fees within ten (10) business days of the time of submission 
of such applications and forms. As the Commission has developed the 
ability to receive on-line payments by credit or debit cards via 
Pay.gov and the Automated Clearing House system, the payment of any 
applicable fees is simplified and facilitates the OTI's ability to pay 
within the 10-day window. Failure to make timely payment could cause an 
application or registration to be rejected.
    Section 515.5(c)(2) is added to make it easier for OTI applicants 
and licensees to quickly find the fees that apply to filings they make, 
by setting out all fees applicable under Part 515 (e.g., fees for 
filing of license applications and registrations) in one place. Section 
515.5(c)(2) directs OTIs to the substantive sections in Part 515 that 
give rise to the fees.

Subpart B--Eligibility and Procedure for Licensing; Procedure for 
Registration

Section 515.11--Basic Requirements for Licensing; Eligibility

    The revisions in ANPR section 515.11(a)(1) have been dropped from 
further consideration, and the paragraph as it appears in the 
Commission's current regulation will remain unchanged, except for the 
addition of a sentence clarifying the experience required of a foreign-
based NVOCC that elects to become licensed. Such foreign-based NVOCCs 
must acquire the requisite experience with respect to shipments in the 
United States oceanborne foreign commerce, though the experience may be 
acquired in the U.S. or a foreign country. The added sentence reflects 
the standard that has been applied by the Commission since 1999.
    The current content of section 515.11(a)(2) is modified by deleting 
its content as redundant. The requirements in section 515.21(a) 
(prohibiting all persons from operating as an OTI without having 
furnished the required financial responsibility) and Sec.  515.22 
(requiring an OTI establish its financial responsibility prior to the 
date it commences furnishing OTI services) clearly provide that an OTI 
must first obtain financial responsibility before it performs OTI 
services.
    The new content inserted in section 515.11(a)(2), as proposed, 
makes it clear that the Commission may consider all information 
relevant to the determination of whether the applicant has the 
necessary character to render OTI services. Types of information that 
may be considered include, but are not limited to: Violations of any 
shipping laws or statutes relating to the import, export or transport 
of merchandise in international trade; operating as an OTI without a 
license or registration; state and federal felonies and misdemeanors; 
voluntary and non-voluntary bankruptcies not discharged; tax liens; 
court and administrative judgments and proceedings; non-compliance with 
immigration status requirements; and denial, revocation, or suspension 
of a Transportation Worker Identification Credential or of a customs 
broker's license. The types of information that may be considered with 
respect to character, set out in NOPR section 515.11(a)(2), reflect the 
types of information that the Commission's Bureau of Certification and 
Licensing (BCL) has considered and applied during the 15 years since 
the current regulations went into effect. This section informs 
applicants of issues that should be addressed in filing their 
applications so as not to unnecessarily delay processing of their 
applications.
    The current content of section 515.11(a)(3) is no longer needed. 
The paragraph is deleted, as it provided for NVOCCs that had tariffs 
and financial responsibility in place at the time the OSRA licensing 
requirements went into effect in 1999 to be temporarily grandfathered 
pending promulgation of regulations.
    The existing requirement in section 515.11(b)(2) that all partners 
must execute an OTI's application is deleted. The current wording of 
515.11(b)(3) as to corporations is retained.
    Section 515.11(b)(4) is added to identify the positions within the 
management structure of an LLC that are eligible to be designated as 
QI. The QI may be an ``officer'' of an LLC if the LLC's operating 
agreement so provides. The Commission has applied this standard since 
the current regulations were promulgated in order to adapt to OTIs' 
frequent election to form their businesses as LLCs.
    The Commission considers it desirable to revise section 515.11(e) 
to mirror the Commission's 1999 clarification that, in order for a 
foreign-based NVOCC to establish a presence in the United States for 
purposes of obtaining a license, it ``must set up an unincorporated 
office that is resident in the United States.'' Docket No. 98-28, 
Licensing, Financial Responsibility Requirements, and General Duties 
for Ocean Transportation Intermediaries (Confirmation of interim final 
rule and correction), 28 SRR 667, 668 (FMC 1999).

Section 515.12--Application for License

    Section 515.12(a) is revised to clarify instructions on filing a 
license application, including the payment of fees. The Commission 
recently issued a direct final rule establishing that notices of 
application filings shall be made on the Commission's Web site. See, 
Docket 14-08, Procedure for Public Notification of Ocean Transportation 
Intermediary Licensing Activity. 79 FR 42986, July 24, 2014. The direct 
final rule similarly provides that Commission notices of license 
revocations and suspensions, required by section 515.16(b), will be 
made on the Commission's Web site. As this rule has already become 
effective, there is no need to further address it in this rulemaking 
proceeding.
    Section 515.12(b) is revised to provide for rejection of 
applications that are facially incomplete or where the applicant fails 
to meet the requirements of the Shipping Act or the Commission's 
regulations. The application fee is returned to the applicant along 
with a statement of reasons for the rejection.
    A new section 515.12(c) establishes a process pursuant to which BCL 
shall close applications where applicants fail to timely provide 
information or documents needed for review. The date for submission of 
such information will be provided by BCL to the applicant. The 
Commission will apply section 515.12(c) reasonably and flexibly. Once 
the date has been established for a response by BCL, the applicant 
should keep BCL fully informed as to the reasons for any response 
delays in order to avoid closure of its application. Applicants whose 
applications are closed may reapply at any time.
    With the addition of the new content inserted in section 515.5(c), 
the content of current section 515.12(c) (Investigation) is 
redesignated as section

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515.12(d). Section 515.12(d) is redesignated as 515.12(e) and is 
revised to require that BCL be promptly advised only of changes in 
material facts relevant to an application. The Commission's current 
section 515.12(e) is superseded by the electronic filing requirement in 
section 515.5(b).

Section 515.14--Issuance, Renewal, and Use of License

    Section 515.14(c) is new. The Commission's proposes to change 
license and registration renewal periods to every three (3) years, 
rather than two years as proposed in the ANPR. If adopted, OTI licenses 
will be issued for an initial three year period and renewed every three 
years thereafter.
    Section 515.14(d)(1) is also new and requires licensees to renew 
their licenses 60 days prior to the renewal date of their license by 
up-dating an on-line form with any changes or corrections that they 
find in the information displayed on screen. This paragraph also 
provides that a new license bear a renewal date on the same day and 
month as the date on which the license was originally issued, with the 
renewal day and month remaining the same for successive renewals. The 
renewal date remains the same regardless of the date a renewal form is 
submitted or the date a renewed license is issued. This feature 
provides ongoing certainty to the licensee as to its status.
    The proposed renewal process for OTIs is straightforward as their 
license will be issued with renewal dates by which renewal must be 
completed. The license renewal requirement is intended to ensure that 
information essential to the Commission's oversight of OTIs is verified 
periodically. Renewal will require licensed OTIs to verify on-line 
their QIs' identification and contact information, changes in business 
or organization, trade names, tariff publication information, physical 
address, and electronic contact data. OTIs would only update 
information that is no longer accurate.
    Renewals by licensees will provide the Commission with updated 
information that the Commission currently requires in sections 
515.12(d) and 515.18 (the content of current section 515.18 is located 
in NOPR section 515.20). At any given time, BCL has 30 to 40 inquiries 
concerning the identity of a licensee's QI, officers, owners, or 
business affiliations, notwithstanding the fact that current sections 
515.12(d) and 515.18 have long required OTIs to inform the Commission 
within 30 days of a change.
    Furthermore, with respect to four specific categories of 
information required to be reported under current regulations (change 
of business address, retirement or resignation of a QI, failure to 
notify/increase the OTI's surety bond, failure to advise the Commission 
of operation under a new trade name), subsequent contacts made by 
Commission staff indicate a failure to timely report averaging 14.6-
24.4% for 2012-2013. This experience includes NVOCCs and OFFs, both 
large and small.
    The information required by the Commission in promulgating the 
current rules is no less necessary today. The NOPR renewal process 
reflects approximately 15 years of Commission experience and will help 
ensure that necessary information is kept up to date.
    As indicated in Sec.  515.14(d)(3), this renewal process will not 
trigger a detailed Commission review or consideration of the character 
and eligibility of existing licensed OTIs, except, as provided in Sec.  
515.14(d)(2), when an OTI supplies information that requires a separate 
review or approval pursuant to section 515.20. Responsive to numerous 
ANPR comments, the Commission intends that the renewal process will be 
entirely on-line and user friendly.
    In proposing this change, the Commission is mindful that no renewal 
dates are included on the licenses of the approximately 4,700 OTIs that 
are currently licensed. Accordingly, a process is needed to allow these 
OTIs to renew their licenses without unreasonable burden or processing 
delays that may occur if large numbers of renewal applications are 
submitted all at once. The Commission seeks comments from the public as 
to the process they consider would best achieve this goal. For example, 
would email notification by BCL to each such licensee of the renewal 
date assigned by BCL enable these OTIs to renew their licenses without 
confusion?

Section 515.15--Denial of License

    The hearing provisions in section 515.15(c) are revised to refer to 
the new hearing procedures set forth in section 515.17. Such hearings 
are currently conducted pursuant to the more complex adjudicatory 
hearing procedures in Part 502 of the Commission's regulations.

Section 515.16--Revocation or Suspension of License

    As discussed above with respect to section 515.12(a)(1) (notices of 
the filing of license applications), section 515.16(b) was revised in 
Docket No. 14-08, Procedure for Public Notification of Ocean 
Transportation Intermediary Licensing Activity. 79 FR 42986, July 24, 
2014, to authorize notices of revocations and suspensions of licenses 
to be made by publication on the Commission's Web site.

Section 515.17--Hearing Procedures Governing: Denial, Revocation, or 
Suspension of OTI Licenses

    The proposal would streamline appeal procedures for denial of OTI 
license applications, and for revocation or suspension of OTI licenses. 
Currently, such appeals are conducted under the Commission's Rules of 
Practice and Procedure, published at 46 CFR part 502, and provide for 
full evidentiary hearings, a process that is often lengthy and 
expensive. Rather than applying a formal full hearing process for such 
denials, revocations or suspensions, this section provides for a more 
efficient process for each type of delegated action.
    Section 515.17(a) provides that requests for hearing under sections 
515.15 (license denials) and 515.16 (license revocations and 
suspensions) are to be referred to the Commission's General Counsel, 
who will designate a hearing officer for review and decision. BCL will 
provide to the hearing officer a copy of the notice given to the 
applicant or licensee and BCL's materials supporting the notice, upon 
being advised by the hearing officer that a hearing request has been 
made. The hearing officer will provide a copy of BCL's material, not 
otherwise privileged, to the requesting party along with a notice 
advising the party of its right to submit written argument, affidavits 
of fact, other information, and documents within 30 days of the date of 
the notice. BCL will submit its response no later than 20 days after 
the submission by the requesting party. These records and submissions 
shall constitute the entire record for decision upon which the hearing 
officer's decision will be based. The hearing officer's decision is to 
be issued within 40 days of the record being closed.
    After the hearing officer's decision is issued, an OTI may file a 
petition for Commission review of the hearing officer's decision 
pursuant to Sec.  501.21(f)(1). The section provides for Commission 
review of staff actions, such as that of the hearing officer, taken 
under delegated authority.
    Section 515.17(c) has been added to clarify that where a 
revocation, termination or suspension also involves an enforcement 
action that, for example, involves the assessment of penalties, formal 
proceedings before an Administrative Law Judge are still required. The 
Commission's discovery

[[Page 61548]]

rules remain available to licensees in such instances.

Section 515.19--Registration of Foreign-Based Non-Vessel-Operating 
Common Carriers

    Since the ANPR was issued, the Commission revised Part 515, 
effective July 19, 2013, as a necessary element to its determination in 
Docket No. 11-22, Non-Vessel-Operating Common Carrier Negotiated Rate 
Arrangements; Tariff Publication Exemption, 78 FR 42886, July 18, 2013. 
The Commission added a new registration requirement for foreign-based 
unlicensed NVOCCs, the content of which is largely identical to that 
contained in ANPR section 515.19. Except as addressed below, the 
Commission will retain the adopted text of 515.19.
    Existing section 515.19(g)(1) informs foreign-based registered 
NVOCCs of grounds upon which the Commission may base terminations or 
suspensions of the effectiveness of a registration. Proposed section 
515.19(g)(2) provides that a registrant may request a hearing using the 
same procedures set out in Sec.  515.17 governing hearing requests for 
OTI licensees.

Section 515.20--Changes in Organization

    The content in this section (moved from Sec.  515.18) removes, as 
unneeded, the provision that specifically requires separately 
incorporated branch offices to obtain their own licenses. All 
separately incorporated entities that provide OTI services in their own 
name are required to be licensed, irrespective of whether they are 
related to another incorporated OTI.
    Section 515.20(c) will continue to provide that OTIs operating as 
partnerships, corporations or LLCs must submit a report within 30 
business days when their QI ceases to serve as a full-time employee of 
the OTI. New content is added to section 515.20(e) identifying changes 
to a licensee's organization that must also be reported to the 
Commission on an ongoing basis, such as changes in business address, 
criminal conviction or indictment of the licensee, QI or its officers, 
and changes of 5 percent or more in the common equity ownership or 
voting securities of the OTI. No fee will be charged for filings 
pursuant to section 515.20(e).

Subpart C--Financial Responsibility Requirements; Claims Against Ocean 
Transportation Intermediaries

Section 515.23--Claims Against an Ocean Transportation Intermediary

    Section 515.23(c) has been modified to reflect the Commission's 
vote to require only financial responsibility providers to report the 
filing notices of claims to the Commission. Also, the Commission has 
dropped the ANPR requirement that notices of claims be published on the 
Commission's Web site. Section 515.23(c) now provides for notices of 
claims and claim payments to be submitted only to the Commission.

Section 515.25--Filing of Proof of Financial Responsibility

    Section 515.25(a)(1) is revised to clarify that an application for 
a license will become invalid, and approval rescinded, if the required 
proof of financial responsibility is not filed within 120 days of 
notification of license approval. The rule provides that applicants 
whose applications have become invalid may submit a new Form FMC-18, 
with the required fee, at any time. The section also provides that an 
NVOCC's registration will not be effective until the registrant has 
furnished proof of financial responsibility, filed a Form FMC-1, and 
published a tariff.

Section 515.26--Termination of Financial Responsibility

    This section is revised to provide that registrations may be 
terminated, as well as licenses revoked, without hearing or other 
proceeding in the event that the required financial responsibility is 
terminated.

Section 515.27--Proof of Compliance--NVOCC

    Section 515.27(a) has been revised to restate the paragraph to make 
clear that no common carrier shall ``knowingly and willfully'' 
transport cargo for an NVOCC unless the common carrier has determined 
that the NVOCC has a license or registration, has published a tariff, 
and has provided proof of financial responsibility. Section 
515.27(b)(2) has been revised to insert the Commission's web address as 
a location that common carriers can consult to verify an NVOCC's 
status. The Commission is working to ensure that common carriers can 
make the required verifications at a single, convenient, location on 
the Commission's Web site.

Subpart C Appendices

    Appendices A through F are removed from their current location 
between section 515.27 and section 515.31, and moved to the end of Part 
515. The Commission believes that moving these forms to the end will 
make use of Part 515 less cumbersome.

Subpart D--Duties and Responsibilities of Ocean Transportation 
Intermediaries; Reports to Commission

Section 515.31--General Duties

    Section 515.31 has been revised throughout to apply to all OTIs, 
both licensed and registered. Without such a change, registrants would 
not be subject to, for example, the section 515.31(f) requirement 
prohibiting preparation of claims that the registrant has reason to 
believe are false or fraudulent.
    Section 515.31(g) places an obligation on all OTIs to promptly 
respond to requests for all records and books of accounts made by 
authorized Commission representatives. In addition, section 515.31(g) 
now clarifies that OTI principals are responsible for requiring that 
their agents promptly respond to requests directed to such agents.
    As a result of the deletion of ANPR sections 515.31(j) and (k), 
ANPR section 515.31(l) (prohibiting any entity from advertising or 
holding out to provide OTI services unless it has a valid OTI license 
or registration) is redesignated as section 515.31(j). Proposed section 
515.31(j) is an outgrowth of the Commission's decision in Docket No. 
06-01, Worldwide Relocations, Inc., et al.--Possible Violations, 32 SRR 
495, 503 (FMC 2012), in which it analyzed factors to be considered when 
determining whether an entity has held itself out to the general public 
to provide NVOCC services. In Worldwide Relocations, the Commission 
cited Common Carriers by Water--Status of Express Companies, Truck 
Lines and Other Non-Vessel Carriers, 1 SRR 292, 301 (FMC 1961), in 
which it found that persons or entities may hold themselves out ``by 
the establishment and maintenance of tariffs, by advertisement and 
solicitation, and otherwise.'' The Commission also cited Activities, 
Tariff Filing Practices and Carrier Status of Containerships, Inc., 6 
SRR 483, 489 n. 7 (FMC 1965), noting that the concept of holding out 
includes, among other things, advertisement and solicitation. 
Similarly, section 515.31(j) applies to OFFs, as they hold out to 
perform ocean freight forwarding services via advertising and 
solicitation.

Section 515.33--Records Required To Be Kept

    The introductory paragraph of Section 515.33 is revised to clarify 
that all OTIs shall maintain records pertaining to their OTI business, 
and that the records must be maintained in useable form and readily 
available to the Commission. This records retention requirement applies 
whether the records are kept in

[[Page 61549]]

the United States or in foreign locations. The requirement to keep such 
records solely in the United States is deleted.

Subpart E--Freight Forwarding Fees and Compensation

Section 515.41--Forwarder and Principal; Fees

    The current content of section 515.41(c) (ocean freight forwarders 
shall not deny equal terms of special contracts to similarly situated 
shippers) is deleted. The Commission has determined it is no longer 
needed.

Section 515.42--Forwarder and Carrier; Compensation

    Section 515.42(c) is revised to specifically authorize electronic 
certifications by forwarders to carriers that forwarding services have 
been provided. Such electronic certifications (e.g., an automated 
forwarder database) must identify the shipments for which compensation 
is made and provide for the forwarder's confirmation that the services 
for which forwarder compensation is to be paid have been provided. This 
provision will ensure, for example, that the forwarder will confirm 
that the carrier's list of shipments is correct, and, if not, the 
forwarder will advise the carrier of shipments that should be added or 
deleted. Certifications must be retained for a period of 5 years by the 
common carrier. The Commission anticipates that such electronic 
certification will facilitate carrier payments through the banking 
system's automated clearinghouse (ACH) payment network, a lower cost 
and more convenient procedure for both carrier and forwarder.

Regulatory Flexibility Act--Threshold Analysis and Chairman's 
Certification of No Significant Economic Impact

    When an agency issues a rulemaking proposal, the Regulatory 
Flexibility Act (RFA) requires the agency to ``prepare and make 
available for public comment an initial regulatory flexibility 
analysis'' which will ``describe the impact of the proposed rule on 
small entities.'' 5 U.S.C. 603(a). Section 605 of the RFA allows an 
agency to certify a rule, in lieu of preparing an analysis, if the 
proposed rulemaking is not expected to have a significant economic 
impact on a substantial number of small entities.
    This proposed rule directly affects all U.S. licensed OTIs, of 
which there are currently 4,648. The FMC estimates that approximately 
97 percent of these OTIs are small entities. Therefore, the Commission 
has determined that this proposed rule will have an impact on a 
substantial number of small entities.
    However, the Commission has determined that the impact on entities 
affected by the proposed rule will not be significant. Most of the 
proposed changes have been found to have either no economic impact or 
beneficial economic impacts. Concerning the one change with the 
potential to generate economic disbenefit, i.e., the license renewal 
requirement, the dollar magnitude of the economic impact has been 
estimated to be less than one-tenth of one percent of average annual 
revenue for even the smallest entities.
    Accordingly, the Chairman of the Federal Maritime Commission hereby 
certifies that this rule will not have a significant economic impact on 
a substantial number of small entities. The Commission invites comment 
from members of the public who believe the rule will have a significant 
economic impact on the U.S.-based OTIs.
    This rule is not a ``major rule'' under 5 U.S.C. 804(2).

List of Subjects in 46 CFR Part 515

    Freight, Freight forwarders, Maritime carriers, Reporting and 
recordkeeping requirements.

    For the reasons stated in the supplementary information, the 
Federal Maritime Commission proposes to amend 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 continues to read as follows:

    Authority:  5 U.S.C. 553; 31 U.S.C. 9701; 46 U.S.C. 305, 40102, 
40104, 40501-40503, 40901-40904, 41101-41109, 41301-41302, 41305-
41307; Pub. L. 105-383, 112 Stat. 3411; 21 U.S.C. 862.

Subpart A--General

0
2-3. In Sec.  515.1, revise paragraph (b) to read as follows:


Sec.  515.1  Scope.

* * * * *
    (b) Information obtained under this part is used to determine the 
qualifications of ocean transportation intermediaries and their 
compliance with shipping statutes and regulations. Failure to follow 
the provisions of this part may result in denial, revocation or 
suspension of an ocean transportation intermediary license or 
registration. Persons operating without the proper license or 
registration may be subject to civil penalties not to exceed $9,000 for 
each such violation, unless the violation is willfully and knowingly 
committed, in which case the amount of the civil penalty may not exceed 
$45,000 for each violation; for other violations of the provisions of 
this part, the civil penalties range from $9,000 to $45,000 for each 
violation (46 U.S.C. 41107-41109). Each day of a continuing violation 
shall constitute a separate violation.
0
4. Revise Sec.  515.2 to read as follows:


Sec.  515.2  Definitions.

    The terms used in this part are defined as follows:
    (a) Act or Shipping Act means the Shipping Act of 1984, as amended. 
46 U.S.C. 40101-41309.
    (b) Beneficial interest includes a lien or interest in or right to 
use, enjoy, profit, benefit, or receive any advantage, either 
proprietary or financial, from the whole or any part of a shipment of 
cargo where such interest arises from the financing of the shipment or 
by operation of law, or by agreement, express or implied. The term 
``beneficial interest'' shall not include any obligation in favor of an 
ocean transportation intermediary arising solely by reason of the 
advance of out-of-pocket expenses incurred in dispatching a shipment.
    (c) Branch office means any office in the United States established 
by or maintained by or under the control of a licensee for the purpose 
of rendering intermediary services, which office is located at an 
address different from that of the licensee's designated home office.
    (d) Commission means the Federal Maritime Commission.
    (e) Common carrier means any person holding itself out to the 
general public to provide transportation by water of passengers or 
cargo between the United States and a foreign country for compensation 
that:
    (1) Assumes responsibility for the transportation from the port or 
point of receipt to the port or point of destination, and
    (2) Utilizes, for all or part of that transportation, a vessel 
operating on the high seas or the Great Lakes between a port in the 
United States and a port in a foreign country, except that the term 
does not include a common carrier engaged in ocean transportation by 
ferry boat, ocean tramp, chemical parcel tanker, or by a vessel when 
primarily engaged in the carriage of perishable agricultural 
commodities:
    (i) If the common carrier and the owner of those commodities are 
wholly-owned, directly or indirectly, by a person primarily engaged in 
the marketing and distribution of those commodities, and

[[Page 61550]]

    (ii) Only with respect to those commodities.
    (f) Compensation means payment by a common carrier to a freight 
forwarder for the performance of services as specified in Sec.  
515.2(h).
    (g) Freight forwarding fee means charges billed by an ocean freight 
forwarder to a shipper, consignee, seller, purchaser, or any agent 
thereof, for the performance of freight forwarding services.
    (h) Freight forwarding services refers to the dispatching of 
shipments on behalf of others, in order to facilitate shipment by a 
common carrier, which may include, but are not limited to, the 
following:
    (1) Ordering cargo to port;
    (2) Preparing and/or processing export documents, including the 
required `electronic export information';
    (3) Booking, arranging for or confirming cargo space;
    (4) Preparing or processing delivery orders or dock receipts;
    (5) Preparing and/or processing common carrier bills of lading or 
other shipping documents;
    (6) Preparing or processing consular documents or arranging for 
their certification;
    (7) Arranging for warehouse storage;
    (8) Arranging for cargo insurance;
    (9) Assisting with clearing shipments in accordance with United 
States Government export regulations;
    (10) Preparing and/or sending advance notifications of shipments or 
other documents to banks, shippers, or consignees, as required;
    (11) Handling freight or other monies advanced by shippers, or 
remitting or advancing freight or other monies or credit in connection 
with the dispatching of shipments;
    (12) Coordinating the movement of shipments from origin to vessel; 
and
    (13) Giving expert advice to exporters concerning letters of 
credit, other documents, licenses or inspections, or on problems 
germane to the cargoes' dispatch.
    (i) From the United States means oceanborne export commerce from 
the United States, its territories, or possessions, to foreign 
countries.
    (j) Licensee is any person licensed by the Federal Maritime 
Commission as an ocean transportation intermediary.
    (k) Non-vessel-operating common carrier services refers to the 
provision of transportation by water of cargo between the United States 
and a foreign country for compensation without operating the vessels by 
which the transportation is provided, and may include, but are not 
limited to, the following:
    (1) Purchasing transportation services from a common carrier and 
offering such services for resale to other persons;
    (2) Payment of port-to-port or multimodal transportation charges;
    (3) Entering into affreightment agreements with underlying 
shippers;
    (4) Issuing bills of lading or other shipping documents;
    (5) Assisting with clearing shipments in accordance with U.S. 
government regulations;
    (6) Arranging for inland transportation and paying for inland 
freight charges on through transportation movements;
    (7) Paying lawful compensation to ocean freight forwarders;
    (8) Coordinating the movement of shipments between origin or 
destination and vessel;
    (9) Leasing containers;
    (10) Entering into arrangements with origin or destination agents;
    (11) Collecting freight monies from shippers and paying common 
carriers as a shipper on NVOCC's own behalf.
    (l) Ocean common carrier means a common carrier that operates, for 
all or part of its common carrier service, a vessel on the high seas or 
the Great Lakes between a port in the United States and a port in a 
foreign country, except that the term does not include a common carrier 
engaged in ocean transportation by ferry boat, ocean tramp, or chemical 
parcel-tanker.
    (m) Ocean transportation intermediary (OTI) means an ocean freight 
forwarder or a non-vessel-operating common carrier. For the purposes of 
this part, the term
    (1) Ocean freight forwarder (OFF) means a person that--
    (i) In the United States, dispatches shipments from the United 
States via a common carrier and books or otherwise arranges space for 
those shipments on behalf of shippers; and
    (ii) Processes the documentation or performs related activities 
incident to those shipments; and
    (2) Non-vessel-operating common carrier (NVOCC) means a common 
carrier that does not operate the vessels by which the ocean 
transportation is provided, and is a shipper in its relationship with 
an ocean common carrier.
    (n) Person means individuals, corporations, companies, including 
limited liability companies, associations, firms, partnerships, 
societies and joint stock companies existing under or authorized by the 
laws of the United States or of a foreign country.
    (o) Principal, with respect to a licensed ocean freight forwarder 
employed to facilitate ocean transportation of property, refers to the 
shipper, consignee, seller or purchaser of such property, and to anyone 
acting on behalf of such shipper, consignee, seller or purchaser.
    (p) Qualifying individual (QI) means an individual who meets the 
experience and character requirements of section 19 of the Shipping Act 
(46 U.S.C. 40901-40904) and this part.
    (q) Reduced forwarding fees means charges to a principal for 
forwarding services that are below the licensed ocean freight 
forwarder's usual charges for such services.
    (r) Registered non-vessel-operating common carrier (registered 
NVOCC) means an NVOCC whose primary place of business is located 
outside the United States and who elects not to become licensed as an 
NVOCC, but to register with the Commission as provided in Sec.  515.19, 
post a bond or other surety in the required amount, and publish a 
tariff as required by 46 CFR part 520.
    (s) Shipment means all of the cargo carried under the terms of a 
single bill of lading.
    (t) Shipper means:
    (1) A cargo owner;
    (2) The person for whose account the ocean transportation is 
provided;
    (3) The person to whom delivery is to be made;
    (4) A shippers' association; or
    (5) A non-vessel-operating common carrier that accepts 
responsibility for payment of all charges applicable under the tariff 
or service contract.
    (u) Special contract is a contract for ocean freight forwarding 
services which provides for a periodic lump sum fee.
    (v) Transportation-related activities which are covered by the 
financial responsibility obtained pursuant to this part include, to the 
extent involved in the foreign commerce of the United States, any 
activity performed by an ocean transportation intermediary that is 
necessary or customary in the provision of transportation services to a 
customer, but are not limited to the following:
    (1) For an ocean transportation intermediary operating as an ocean 
freight forwarder, the freight forwarding services enumerated in Sec.  
515.2(h), and
    (2) For an ocean transportation intermediary operating as a non-
vessel-operating common carrier, the non-vessel-operating common 
carrier services enumerated in Sec.  515.2(k).
    (w) United States includes the several States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the 
Northern Marianas, and all other United States territories and 
possessions.

[[Page 61551]]

0
5. Revise Sec.  515.3 to read as follows:


Sec.  515.3  License; when required.

    Except as otherwise provided in this part, no person in the United 
States may act as an ocean transportation intermediary unless that 
person holds a valid license issued by the Commission. For purposes of 
this part, a person is considered to be ``in the United States'' if 
such person is resident in, or incorporated or established under, the 
laws of the United States. Registered NVOCCs must utilize only licensed 
ocean transportation intermediaries to provide NVOCC services in the 
United States. In the United States, only licensed OTIs may act as 
agents to provide OTI services for registered NVOCCs.
0
6. Revise Sec.  515.4 to read as follows:


Sec.  515.4  License; when not required.

    A license is not required in the following circumstances:
    (a) Shippers. Any person whose primary business is the sale of 
merchandise may, without a license, dispatch and perform freight 
forwarding services on behalf of its own shipments, or on behalf of 
shipments or consolidated shipments of a parent, subsidiary, affiliate, 
or associated company. Such person shall not receive compensation from 
the common carrier for any services rendered in connection with such 
shipments.
    (b) Agents, employees, or branch offices of a licensed ocean 
transportation intermediary. An agent, individual employee, or branch 
office of a licensed ocean transportation intermediary is not required 
to be licensed in order to act on behalf of and in the name of such 
licensee; however, branch offices must be reported to the Commission in 
Form FMC-18 or pursuant to Sec.  515.20(e). A licensed ocean 
transportation intermediary shall be fully responsible for the acts and 
omissions of any of its employees and agents that are performed in 
connection with the conduct of such licensee's business.
    (c) Common carriers. A common carrier, or agent thereof, may 
perform ocean freight forwarding services without a license only with 
respect to cargo carried under such carrier's own bill of lading. 
Charges for such forwarding services shall be assessed in conformance 
with the carrier's published tariffs.
    (d) Federal military and civilian household goods. Any person which 
exclusively transports used household goods and personal effects for 
the account of the Department of Defense, or for the account of the 
federal civilian executive agencies shipping under the International 
Household Goods Program administered by the General Services 
Administration, or both, is not subject to the requirements of subpart 
B of this part, but may be subject to other requirements, such as 
alternative surety bonding, imposed by the Department of Defense, or 
the General Services Administration.
0
7. Revise Sec.  515.5 to read as follows:


Sec.  515.5  Forms and fees.

    (a) Forms. License Application Form FMC-18 Rev., Application for 
Renewal of Ocean Transportation Intermediary License Form__--, and 
Foreign-based Unlicensed NVOCC Registration/Renewal Form FMC-65, are 
found at the Commission's Web site www.fmc.gov for completion on-line 
by applicants, licensees, and registrants. Financial responsibility 
Forms FMC-48, FMC-67, FMC-68, FMC-69 may be obtained from the 
Commission's Web site at www.fmc.gov, from the Director, Bureau of 
Certification and Licensing, Federal Maritime Commission, Washington, 
DC 20573, or from any of the Commission's Area Representatives.
    (b) Filing of license applications and registration forms. All 
applications and forms are to be filed electronically unless a waiver 
is granted to file in paper form. A waiver request must be submitted in 
writing to the Director, Bureau of Certification and Licensing, 800 
North Capitol Street NW., Washington, DC 20573, and must demonstrate 
that electronic filing imposes an undue burden on the applicant or 
registrant. The director, or a designee, will render a decision on the 
request and notify the requestor within two (2) business days of 
receiving the request. If a waiver request is granted, the approval 
will provide instructions for submitting a paper application or 
registration. If the waiver request is denied, a statement of reasons 
for the denial will be provided.
    (c) Fees. (1) All fees shall be paid by:
    (i) Money order, certified, cashier's, or personal check payable to 
the order of the ``Federal Maritime Commission;''
    (ii) Pay.gov;
    (iii) The Automated Clearing House system; or
    (iv) By other means authorized by the Director of the Commission's 
Office of Budget and Finance.
    (2) Applications or registrations shall be rejected unless the 
applicable fee and any bank charges assessed against the Commission are 
received by the Commission within ten (10) business days after 
submission of the application or registration. In any instance where an 
application has been processed in whole or in part, the fee will not be 
refunded.
    (3) Fees under this part 515 shall be as follows:
    (i) Application for new OTI license as required by Sec.  515.12(a): 
automated filing $250; paper filing pursuant to waiver $825.
    (ii) Application for change to OTI license or license transfer as 
required by Sec.  515.20(a) and (b): automated filing $125; paper 
filing pursuant to waiver $525.
    (iii) A copy of the Regulated Persons Index may be purchased for 
$108 as provided in Sec.  515.34.
0
8. Amend the heading for subpart B by adding at the end ``and 
Registration'' to read as follows:

Subpart B--Eligibility and Procedure for Licensing and Registration

0
9. Revise Sec.  515.11 to read as follows:


Sec.  515.11  Basic requirements for licensing; eligibility.

    (a) Necessary qualifications. To be eligible for an ocean 
transportation intermediary license, the applicant must demonstrate to 
the Commission that:
    (1) It possesses the necessary experience, that is, its qualifying 
individual has a minimum of three (3) years experience in ocean 
transportation intermediary activities in the United States, and the 
necessary character to render ocean transportation intermediary 
services. A foreign NVOCC seeking to be licensed under this part must 
demonstrate that its qualifying individual has a minimum 3 years' 
experience in ocean transportation intermediary activities, and the 
necessary character to render ocean transportation intermediary 
services. The required OTI experience of the QI of a foreign based 
NVOCC seeking to become licensed under this part (foreign-based 
licensed NVOCC) may be experience acquired in the U.S. or a foreign 
country with respect to shipments in the United States oceanborne 
foreign commerce.
    (2) In addition to information provided by the applicant and its 
references, the Commission may consider all information relevant to 
determining whether an applicant has the necessary character to render 
ocean transportation intermediary services, including but not limited 
to, information regarding: violations of any shipping laws, or statutes 
relating to the import, export, or transport of merchandise in 
international trade; operating as an OTI without a license or 
registration; state and federal felonies and misdemeanors; voluntary 
and non-voluntary bankruptcies not discharged;

[[Page 61552]]

tax liens and other court and administrative judgments and proceedings; 
compliance with immigration status requirements described in 49 CFR 
1572.105; denial, revocation, or suspension of a Transportation Worker 
Identification Credential under 49 CFR 1572; and the denial, 
revocation, or suspension of a customs broker's license under 19 CFR 
Subpart B, section 111. The required OTI experience of the QI of a 
foreign-based NVOCC seeking to become licensed under this part 
(foreign-based licensed NVOCC) may be experience acquired in the U.S. 
or a foreign country with respect to shipments in the United States 
oceanborne foreign commerce.
    (b) Qualifying individual. The following individuals must qualify 
the applicant for a license:
    (1) Sole proprietorship. The applicant sole proprietor.
    (2) Partnership. At least one of the active managing partners.
    (3) Corporation. At least one of the active corporate officers
    (4) Limited liability company. One of the members or managers, or 
an individual in an equivalent position in the LLC as expressly set 
forth in the LLC operating agreement.
    (c) Affiliates of intermediaries. An independently qualified 
applicant may be granted a separate license to carry on the business of 
providing ocean transportation intermediary services even though it is 
associated with, under common control with, or otherwise related to 
another ocean transportation intermediary through stock ownership or 
common directors or officers, if such applicant submits: a separate 
application and fee, and a valid instrument of financial responsibility 
in the form and amount prescribed under Sec.  515.21. The qualifying 
individual of one active licensee shall not also be designated as the 
qualifying individual of an applicant for another ocean transportation 
intermediary license, unless both entities are commonly owned or where 
one directly controls the other.
    (d) Common carrier. A common carrier or agent thereof which meets 
the requirements of this part may be licensed as an ocean freight 
forwarder to dispatch shipments moving on other than such carrier's own 
bills of lading subject to the provisions of Sec.  515.42(g).
    (e) Foreign-based licensed NVOCC. A foreign-based NVOCC that elects 
to obtain a license must establish a presence in the United States by 
opening an unincorporated office that is resident in the United States 
and is qualified to do business where it is located.
0
10. Revise Sec.  515.12 to read as follows:


Sec.  515.12  Application for license.

    (a) Application and forms. (1) Any person who wishes to obtain a 
license to operate as an ocean transportation intermediary shall submit 
electronically (absent a waiver pursuant to Sec.  515.5(b)) a completed 
application Form FMC-18 Rev. (Application for a License as an Ocean 
Transportation Intermediary) in accordance with the automated FMC-18 
filing system and corresponding instructions. A filing fee shall be 
paid, as required under Sec.  515.5(c). Notice of filing of each 
application shall be published on the Commission's Web site www.fmc.gov 
and shall state the name and address of the applicant and the name and 
address of the QI. If the applicant is a corporation or partnership, 
the names of the officers or partners thereof may be published. For an 
LLC, the names of the managers, members or officers, as applicable, may 
be published.
    (2) An individual who is applying for a license as a sole 
proprietor must complete the following certification:

    I, __--, certify under penalty of perjury under the laws of the 
United States, that I have not been convicted, after September 1, 
1989, of any Federal or state offense involving the distribution or 
possession of a controlled substance, or that if I have been so 
convicted, I am not ineligible to receive Federal benefits, either 
by court order or operation of law, pursuant to 21 U.S.C. 862.

    (b) Rejection. Any application which appears upon its face to be 
incomplete or to indicate that the applicant fails to meet the 
licensing requirements of the Act, or the Commission's regulations, may 
be rejected and a notice shall be sent to the applicant, together with 
an explanation of the reasons for rejection, and the filing fee shall 
be refunded in full. Persons who have had their applications rejected 
may submit a new Form FMC-18 at any time, together with the required 
filing fee.
    (c) Failure to provide necessary information and documents. In the 
event an applicant fails to provide documents or information necessary 
to complete processing of its application, notice will be sent to the 
applicant identifying the necessary information and documents and 
establishing a date for submission by the applicant. Failure of the 
applicant to submit the identified materials by the established date 
will result in the closing of its application without further 
processing. In the event an application is closed as a result of the 
applicant's failure to provide information or documents necessary to 
complete processing, the filing fee will not be returned. Persons who 
have had their applications closed under this section may reapply at 
any time by submitting a new application with the required filing fee.
    (d) Investigation. Each applicant shall be investigated in 
accordance with Sec.  515.13.
    (e) Changes in fact. Each applicant shall promptly advise the 
Commission of any material changes in the facts submitted in the 
application. Any unreported change may delay the processing and 
investigation of the application and result in rejection, closing, or 
denial of the application.
0
11. In Sec.  515.14, revise the section heading and paragraph (b) and 
add paragraphs (c) and (d) to read as follows:


Sec.  515.14  Issuance, renewal, and use of license.

* * * * *
    (b) To whom issued. The Commission will issue a license only in the 
name of the applicant, whether the applicant is a sole proprietorship, 
a partnership, a corporation, or limited liability company. A license 
issued to a sole proprietor doing business under a trade name shall be 
in the name of the sole proprietor, indicating the trade name under 
which the licensee will be conducting business. Only one license shall 
be issued to any applicant regardless of the number of names under 
which such applicant may be doing business, and except as otherwise 
provided in this part, such license is limited exclusively to use by 
the named licensee and shall not be transferred without prior 
Commission approval to another person.
    (c) Licenses shall be issued for an initial period of three (3) 
years. Thereafter, licenses will be renewed for sequential three year 
periods upon successful completion of the renewal process in paragraph 
(d) of this section.
    (d) License renewal process. (1) The licensee shall submit 
electronically to the Director of the Bureau of Certification and 
Licensing (BCL) a completed Form FMC__-- (Application for Renewal of 
Ocean Transportation Intermediary License) no later than sixty (60) 
days prior to the renewal date set forth on its license. Upon 
successful completion of the renewal process, the Commission shall 
issue a new license bearing a renewal date three (3) years later on the 
same day and month on which the license was originally issued. The 
renewal date will remain the same for subsequent renewals irrespective 
of the date on which the license renewal is submitted or when the 
renewed license is issued by the Commission, unless another renewal 
date is assigned by the Commission.

[[Page 61553]]

    (2) Where information provided in an OTI's renewal form, Form 
FMC_--, is changed from that set out in its current Form FMC-18 and 
requires Commission approval pursuant to Sec.  515.20, the licensee 
must promptly submit a request for such approval on Form FMC-18 
together with the required filing fee. The licensee may continue to 
operate as an ocean transportation intermediary during the pendency of 
the Commission's approval process.
    (3) Though the foregoing license renewal process is not intended to 
result in a re-evaluation of a licensee's character, the Commission may 
review a licensee's character at any time, including at the time of 
renewal, based upon information received from the licensee or other 
sources.
0
12. In Sec.  515.15, revise paragraph (c) to read as follows:


Sec.  515.15  Denial of license.

* * * * *
    (c) Has made any materially false or misleading statement to the 
Commission in connection with its application; then, a notice of intent 
to deny the application shall be sent to the applicant stating the 
reason(s) why the Commission intends to deny the application. The 
notice of intent to deny the application will provide, in detail, a 
statement of the facts supporting denial. An applicant may request a 
hearing on the proposed denial by submitting to the Secretary, Federal 
Maritime Commission, Washington, DC 20573, within twenty (20) days of 
the date of the notice, a statement of reasons why the application 
should not be denied. Such hearing shall be provided pursuant to the 
procedures contained in Sec.  515.17. Otherwise, the denial of the 
application will become effective and the applicant shall be so 
notified.
0
13. Revise Sec.  515.16 to read as follows:


Sec.  515.16  Revocation or suspension of license.

    (a) Grounds. Except for the automatic revocation for termination of 
proof of financial responsibility under Sec.  515.26, a license may be 
revoked or suspended after notice and an opportunity for a hearing 
under the procedures of Sec.  515.17.
    The notice of revocation or suspension will provide, in detail, a 
statement of the facts supporting the action. The licensee may request 
a hearing on the proposed revocation or suspension by submitting to the 
Commission's Secretary, within twenty (20) days of the date of the 
notice, a statement of reasons why the license should not be revoked or 
suspended. Such hearing shall be provided pursuant to the procedures 
contained in Sec.  515.17. Otherwise, the action regarding the license 
will become effective. A license may be revoked or suspended for any of 
the following reasons:
    (1) Violation of any provision of the Act, or any other statute or 
Commission order or regulation related to carrying on the business of 
an ocean transportation intermediary;
    (2) Failure to respond to any lawful order or inquiry by the 
Commission;
    (3) Making a materially false or misleading statement to the 
Commission in connection with an application for a license or an 
amendment to an existing license;
    (4) A Commission determination that the licensee is not qualified 
to render intermediary services; or
    (5) Failure to honor the licensee's financial obligations to the 
Commission.
    (b) Notice. The Commission shall publish on the Commission's Web 
site www.fmc.gov notice of each revocation and suspension.


Sec.  515.18  [Redesignated as Sec.  515.20].

0
14. Redesignate Sec.  515.18 as Sec.  515.20.


Sec.  515.17  [Redesignated as Sec.  515.18].

0
15. Redesignate Sec.  515.17 as Sec.  515.18.
0
16. Add new Sec.  515.17 to read as follows:


Sec.  515.17  Hearing procedures governing denial, revocation, or 
suspension of OTI license.

    (a) Hearing requests. All hearing requests under Sec. Sec.  515.15 
and 515.16 shall be submitted to the Commission's Secretary. Such 
requests shall be referred to the General Counsel to designate a 
hearing officer for review and decision under the procedures 
established in this section. Upon receipt of a request for hearing, the 
hearing officer shall notify BCL, and BCL will provide to the hearing 
officer a copy of the notice given to the applicant or licensee and a 
copy of BCL materials supporting the notice. The hearing officer will 
then issue a notice advising the applicant or, in the case of a 
revocation or suspension of the license, the licensee of the right to 
submit information and documents, including affidavits of fact and 
written argument, in support of an OTI application or continuation of a 
current OTI license.
    (b) Notice. The notice shall establish a date no later than thirty 
(30) days from the date of the notice for submission of all supporting 
materials by the applicant or licensee. The notice shall also provide 
that the BCL may submit responsive materials no later than twenty (20) 
days from the date the applicant or licensee submitted its materials. 
BCL's notice and materials supporting its notice, the submission of the 
applicant or licensee, and the responsive submission of BCL shall 
constitute the entire record upon which the hearing officer's decision 
shall be based. The hearing officer's decision shall be issued within 
forty (40) days after the closing of the record.
    (c) Commission-initiated enforcement proceedings. In proceedings 
for assessment of civil penalties for violations of the Shipping Act or 
Commission regulations, a license may be revoked or suspended after 
notice and an opportunity for hearing under Part 502 (Rules of Practice 
and Procedure).
0
17. In Sec.  515.19, add paragraph (g)(2) to read as follows:


Sec.  515.19  Registration of foreign-based non-vessel-operating common 
carriers.

    (g) * * *
    (2) Hearing procedure. Registrants may request a hearing for 
terminations or suspensions of the effectiveness of their registrations 
following the same procedures set forth in Sec.  515.17 (governing 
hearing requests for denials, revocations and suspensions of licenses).
* * * * *
0
18. Revise newly redesignated Sec.  515.20 to read as follows:


Sec.  515.20  Changes in organization.

    (a) Licenses. The following changes in an existing licensee's 
organization require prior approval of the Commission, and application 
for such status change or license transfer shall be made on Form FMC-
18, filed with the Commission's Bureau of Certification and Licensing, 
and accompanied by the fee required under Sec.  515.5(c):
    (1) Transfer of a corporate license to another person;
    (2) Change in ownership of a sole proprietorship;
    (3) Any change in the business structure of a licensee from or to a 
sole proprietorship, partnership, limited liability company, or 
corporation, whether or not such change involves a change in ownership;
    (4) Any change in a licensee's name; or
    (5) Change in the identity or status of the designated QI, except 
as described in paragraphs (b) and (c) of this section.
    (b) Operation after death of sole proprietor. In the event that the 
owner of a licensed sole proprietorship dies, the licensee's executor, 
administrator, heir(s), or assign(s) may continue operation of such 
proprietorship solely with respect to shipments for which the

[[Page 61554]]

deceased sole proprietor had undertaken to act as an ocean 
transportation intermediary pursuant to the existing license, if the 
death is reported within 30 days to the Commission and to all 
principals and shippers for whom services on such shipments are to be 
rendered. The acceptance or solicitation of any other shipments is 
expressly prohibited until a new license has been issued. Applications 
for a new license by the executor, administrator, heir(s), or assign(s) 
shall be made on Form FMC-18, and shall be accompanied by the fee 
required under Sec.  515.5(c).
    (c) Operation after retirement, resignation, or death of QI. When a 
partnership, LLC, or corporation has been licensed on the basis of the 
qualifications of one or more of the partners, members, managers or 
officers thereof, and the QI no longer serves as a full-time employee 
with the OTI or, is no longer responsible for the licensee's OTI 
activities, the licensee shall report such change to the Commission 
within thirty (30) business days. Within the same 30-day period, the 
licensee shall furnish to the Commission the name(s) and detailed 
intermediary experience of any other active partner(s), member(s), 
manager(s) or officer(s) who may qualify the licensee. Such QI(s) must 
meet the applicable requirements set forth in Sec.  515.11(a) through 
(c). The licensee may continue to operate as an ocean transportation 
intermediary while the Commission investigates the qualifications of 
the newly designated partner, member, manager, or officer.
    (d) Acquisition of one or more additional licensees. In the event a 
licensee acquires one or more additional licensees, for the purpose of 
merger, consolidation, or control, the acquiring licensee shall advise 
the Commission of such acquisition, including any change in ownership, 
within 30 days after such change occurs by submitting an amended Form 
FMC-18. No application fee is required when reporting this change.
    (e) Other changes. Other changes in material fact of a licensee 
shall be reported within thirty (30) days of such changes, in writing 
by mail or email ([email protected]) to the Director, Bureau of Certification 
and Licensing, Federal Maritime Commission, Washington, DC. 20573. 
Material changes include, but are not limited to: changes in business 
address; any criminal indictment or conviction of a licensee, QI, or 
officer; any voluntary or involuntary bankruptcy filed by or naming a 
licensee, QI, or officer; changes of five (5) percent or more of the 
common equity ownership or voting securities of the OTI; or, the 
addition or reduction of one or more partners of a licensed 
partnership, one or more members or managers of a Limited Liability 
Company, or one or more branch offices. No fee shall be charged for 
reporting such changes.

Subpart C--Financial Responsibility Requirements; Claims Against 
Ocean Transportation Intermediaries

0
19. In Sec.  515.21, revise paragraphs (a)(1) through (3), remove 
paragraph (a)(4), and revise paragraph (b) to read as follows:


Sec.  515.21  Financial responsibility requirements.

    (a) * * *
    (1) Any person operating in the United States as an ocean freight 
forwarder as defined in Sec.  515.2(m)(1) shall furnish evidence of 
financial responsibility in the amount of $50,000.
    (2) Any person operating in the United States as an NVOCC as 
defined in Sec.  515.2(m)(2) shall furnish evidence of financial 
responsibility in the amount of $75,000.
    (3) Any registered NVOCC, as defined in Sec.  515.2(r), shall 
furnish evidence of financial responsibility in the amount of $150,000. 
Such registered NVOCC shall be strictly responsible for the acts and 
omissions of its employees and agents, wherever they are located.
    (b) Group financial responsibility. When a group or association of 
ocean transportation intermediaries accepts liability for an ocean 
transportation intermediary's financial responsibility for such ocean 
transportation intermediary's transportation-related activities under 
the Act, the group or association of ocean transportation 
intermediaries shall file a group bond form, insurance form or guaranty 
form, clearly identifying each ocean transportation intermediary 
covered, before a covered ocean transportation intermediary may provide 
ocean transportation intermediary services. In such cases, a group or 
association must establish financial responsibility in an amount equal 
to the lesser of the amount required by paragraph (a) of this section 
for each member, or $3,000,000 in aggregate. A group or association of 
ocean transportation intermediaries may also file an optional bond 
rider as provided in Sec.  515.25(b).
* * * * *
0
20. Revise Sec.  515.23 to read as follows:


Sec.  515.23  Claims against an ocean transportation intermediary.

    (a) Payments. Shippers, common carriers, and other affected persons 
may seek payment from the bond, insurance, or other surety maintained 
by an ocean transportation intermediary for damages arising out of its 
ocean transportation-related activities. The Commission may also seek 
payment of civil penalties assessed under section 13 of the Shipping 
Act (46 U.S.C. 41107-41109).
    (b) Payment pursuant to a claim. (1) If a person does not file a 
complaint with the Commission pursuant to section 11 of the Shipping 
Act (46 U.S.C. 41301-41302, 41305-41307(a)), but otherwise seeks to 
pursue a claim against an ocean transportation intermediary bond, 
insurance, or other surety for damages arising from its transportation-
related activities, it shall attempt to resolve its claim with the 
financial responsibility provider prior to seeking payment on any 
judgment for damages obtained. When a claimant seeks payment under this 
section, it simultaneously shall notify both the financial 
responsibility provider and the ocean transportation intermediary of 
the claim by mail or courier service. The bond, insurance, or other 
surety may be available to pay such claim if:
    (i) The ocean transportation intermediary consents to payment, 
subject to review by the financial responsibility provider; or
    (ii) The ocean transportation intermediary fails to respond within 
forty-five (45) days from the date of the notice of the claim to 
address the validity of the claim, and the financial responsibility 
provider deems the claim valid.
    (2) If the parties fail to reach an agreement in accordance with 
paragraph (b)(1) of this section within ninety (90) days of the date of 
the initial notification of the claim, the bond, insurance, or other 
surety shall be available to pay any final judgment for reparations 
ordered by the Commission or damages obtained from an appropriate 
court. The financial responsibility provider shall pay such judgment 
for damages only to the extent they arise from the transportation-
related activities of the ocean transportation intermediary, ordinarily 
within thirty (30) days, without requiring further evidence related to 
the validity of the claim; it may, however, inquire into the extent to 
which the judgment for damages arises from the ocean transportation 
intermediary's transportation-related activities.
    (c) Notices of court and other claims against OTIs by financial 
responsibility providers. (1) As provided in each financial 
responsibility instrument between an OTI and its financial 
responsibility provider(s), the issuing financial responsibility 
provider shall submit a notice to the Commission of

[[Page 61555]]

each claim, court action, or court judgment against the financial 
responsibility and each claim paid (including the amount) by the 
provider.
    (2) Notices described in paragraph (1) of this section shall be 
promptly submitted in writing by mail or email ([email protected]) to the 
Director, Bureau of Certification and Licensing, Federal Maritime 
Commission, Washington, DC 20573.
    (3) Notices required by this section shall include the name of the 
claimant, name of the court and case number assigned, and the name and 
license number of the OTI involved. Such notices may include or attach 
other information relevant to the claim.
    (d) FMC not a depository. The Federal Maritime Commission shall not 
serve as depository or distributor to third parties of bond, guaranty, 
or insurance funds in the event of any claim, judgment, or order for 
reparation.
    (e) Optional bond riders. The Federal Maritime Commission shall not 
serve as a depository or distributor to third parties of funds payable 
pursuant to optional bond riders described in Sec.  515.25(b).
0
21. Revise Sec.  515.25 to read as follows:


Sec.  515.25  Filing of proof of financial responsibility.

    (a) Filing of proof of financial responsibility--(1) Licenses. Upon 
notification by the Commission that an applicant has been approved for 
licensing, the applicant shall file with the Director of the 
Commission's Bureau of Certification and Licensing, proof of financial 
responsibility in the form and amount prescribed in Sec.  515.21. No 
license will be issued until the Commission is in receipt of valid 
proof of financial responsibility from the applicant. If, within 120 
days of notification of approval for licensing by the Commission, the 
applicant does not file proof that its financial responsibility is in 
effect, the application will be invalid. Applicants whose applications 
have become invalid may submit a new Form FMC-18, together with the 
required filing fee, at any time.
    (2) Registrations. A registration shall not become effective until 
the applicant has furnished proof of financial responsibility pursuant 
to Sec.  515.21, has submitted a Form FMC-1, and its published tariff 
becomes effective pursuant to 46 CFR part 520.
    (b) Optional bond rider. Any NVOCC as defined in Sec.  515.2(m)(2), 
in addition to a bond meeting the requirements of Sec.  515.21(a)(2) or 
(3), may obtain and file with the Commission proof of an optional bond 
rider, as provided in appendix E or appendix F of this part.
0
22. Revise Sec.  515.26 to read as follows:


Sec.  515.26  Termination of financial responsibility.

    No license or registration shall remain in effect unless valid 
proof of a financial responsibility instrument is maintained on file 
with the Commission. Upon receipt of notice of termination of such 
financial responsibility, the Commission shall notify the concerned 
licensee, registrant, or registrant's legal agent in the United States, 
by mail, courier, or other method reasonably calculated to provide 
actual notice, at its last known address, that the Commission shall, 
without hearing or other proceeding, revoke the license or terminate 
the registration as of the termination date of the financial 
responsibility instrument, unless the licensee or registrant shall have 
submitted valid replacement proof of financial responsibility before 
such termination date. Replacement financial responsibility must bear 
an effective date no later than the termination date of the expiring 
financial responsibility instrument.
0
23. In Sec.  515.27, revise the section heading and paragraphs (a) 
through (c) to read as follows:


Sec.  515.27  Proof of compliance--NVOCC.

    (a) No common carrier shall knowingly and willfully transport cargo 
for the account of an NVOCC unless the carrier has determined that the 
NVOCC has a license or registration, a tariff, and financial 
responsibility as required by sections 8 (46 U.S.C. 40501--40503) and 
19 (46 U.S.C. 40901- 40904) of the Shipping Act and this part.
    (b) A common carrier can obtain proof of an NVOCC's compliance with 
the OTI licensing, registration, tariff and financial responsibility 
requirements by:
    (1) Consulting the Commission's Web site www.fmc.gov as provided in 
paragraph (d) of this section, to verify that the NVOCC has complied 
with the OTI licensing, registration, tariff, and financial 
responsibility requirements; or
    (2) Any other appropriate procedure, provided that such procedure 
is set forth in the carrier's tariff.
    (c) A common carrier that has employed the procedure prescribed in 
paragraph (b)(1) of this section shall be deemed to have met its 
obligations under section 10(b)(11) of the Act (46 U.S.C. 41104(11)), 
unless the common carrier knew that such NVOCC was not in compliance 
with the OTI licensing, registration, tariff, and financial 
responsibility requirements.
* * * * *

Appendices A through F to Subpart C [Removed]

0
24. Remove appendices A through F to subpart C.

Subpart D--Duties and Responsibilities of Ocean Transportation 
Intermediaries; Reports to Commission

0
25. Revise Sec.  515.31 to read as follows:


Sec.  515.31  General duties.

    (a) Licensees and registrants; names and numbers. Each licensee and 
registrant shall carry on its business only under the name in which it 
was licensed or registered and only under its license or registration 
number as assigned by the Commission. When the licensee's or 
registrant's name appears on shipping documents, its Commission license 
or registration number shall also be included.
    (b) Stationery and billing forms. The name and license or 
registration number of each OTI shall be permanently imprinted on the 
licensee's or registrant's office stationery and billing forms.
    (c) Use of license or registration by others; prohibition. No OTI 
shall permit its name, license, license number, registration, or 
registration number to be used by any person who is not an employee or 
an agent of the OTI. An entity that also provides OTI services in its 
own name and not on behalf of a licensed or registered OTI must be 
separately licensed under this part and must provide proof of its own 
financial responsibility and publish a tariff, if applicable. A branch 
office of an OTI may use the license of the OTI, provided that the 
address of the branch office has been reported to the Commission in 
Form FMC-18 or pursuant to Sec.  515.20(e).
    (d) Arrangements with ocean transportation intermediaries whose 
licenses have been revoked. Unless prior written approval from the 
Commission has been obtained, no OTI shall, directly or indirectly:
    (1) Agree to perform ocean transportation intermediary services on 
shipments as an associate, correspondent, officer, employee, agent, or 
sub-agent of any person whose license has been revoked or suspended 
pursuant to Sec.  515.16, or registration terminated or suspended 
pursuant to Sec.  515.19(g);
    (2) Assist in the furtherance of any ocean transportation 
intermediary business of an OTI whose license has been revoked;
    (3) Share forwarding fees or freight compensation with any such 
person; or

[[Page 61556]]

    (4) Permit any such person, directly or indirectly, to participate, 
through ownership or otherwise, in the control or direction of the 
ocean transportation intermediary business of the licensee or 
registrant.
    (e) False or fraudulent claims, false information. No OTI shall 
prepare or file or assist in the preparation or filing of any claim, 
affidavit, letter of indemnity, or other paper or document concerning 
an ocean transportation intermediary transaction which it has reason to 
believe is false or fraudulent, nor shall any such OTI knowingly impart 
to a principal, shipper, common carrier or other person, false 
information relative to any ocean transportation intermediary 
transaction.
    (f) Errors and omissions of the principal or shipper. An OTI who 
has reason to believe that its principal or shipper has not, with 
respect to a shipment to be handled by such OTI, complied with the laws 
of the United States, or has made any error or misrepresentation in, or 
omission from, any export declaration, bill of lading, affidavit, or 
other document which the principal or shipper executes in connection 
with such shipment, shall advise its principal or shipper promptly of 
the suspected noncompliance, error, misrepresentation or omission, and 
shall decline to participate in any transaction involving such document 
until the matter is properly and lawfully resolved.
    (g) Response to requests of Commission. Upon the request of any 
authorized representative of the Commission, an OTI shall make 
available promptly for inspection or reproduction all records and books 
of account in connection with its ocean transportation intermediary 
business, and shall respond promptly to any lawful inquiries by such 
representative. All OTIs are responsible for requiring that, upon the 
request of any authorized Commission representative, their agents make 
available all records and books of account relating to ocean 
transportation intermediary service provided by or for their 
principals, and respond promptly to any lawful inquiries by such 
representative.
    (h) Express written authority. No OTI shall endorse or negotiate 
any draft, check, or warrant drawn to the order of its OTI principal or 
shipper without the express written authority of such OTI principal or 
shipper.
    (i) Accounting to principal or shipper. An OTI shall account to its 
principal(s) or shipper(s) for overpayments, adjustments of charges, 
reductions in rates, insurance refunds, insurance monies received for 
claims, proceeds of C.O.D. shipments, drafts, letters of credit, and 
any other sums due such principal(s) or shipper(s).
    (j) Prohibition. No person may advertise or hold out to provide OTI 
services unless that person holds a valid OTI license or is registered 
under this part.


Sec.  515.32  [Amended]

0
26. In Sec.  515.32, in paragraph (b), in the first sentence, remove 
the word ``sales''.
0
27. In Sec.  515.33, revise the section heading, the introductory text, 
and paragraph (d) to read as follows:


Sec.  515.33  Records to be kept.

    Each licensed or registered NVOCC and each licensed ocean freight 
forwarder shall maintain in an orderly and systematic manner, and keep 
current and correct, all records and books of account in connection 
with its OTI business. The licensed or registered NVOCC and each 
licensed freight forwarder may maintain these records in either paper 
or electronic form, which shall be readily available in usable form to 
the Commission; the electronically maintained records shall be no less 
accessible than if they were maintained in paper form. These 
recordkeeping requirements are independent of the retention 
requirements of other federal agencies. In addition, each licensed 
freight forwarder must maintain the following records for a period of 
five years:
* * * * *
    (d) Special contracts. A true copy, or if oral, a true and complete 
memorandum, of every special arrangement or contract between a licensed 
freight forwarder and a principal, or modification or cancellation 
thereof.


Sec.  515.34  [Amended]

0
28. Amend Sec.  515.34 by removing ``$108'' and adding the phrase ``the 
fee set forth in Sec.  515.5(c)'' in its place.

Subpart E--Freight Forwarding Fees and Compensation

0
29. Amend Sec.  515.41 by:
0
a. Removing paragraph (c);
0
b. Redesignating paragraphs (d) and (e) as paragraphs (c) and (d), 
respectively; and
0
c. Revising newly redesignated paragraph (d).
    The revision reads as follows:


Sec.  515.41  Forwarder and principal; fees.

* * * * *
    (d) In-plant arrangements. A licensed freight forwarder may place 
an employee or employees on the premises of its principal as part of 
the services rendered to such principal, provided:
    (1) The in-plant forwarder arrangement is reduced to writing and 
identifies all services provided by either party (whether or not 
constituting a freight forwarding service); states the amount of 
compensation to be received by either party for such services; sets 
forth all details concerning the procurement, maintenance or sharing of 
office facilities, personnel, furnishings, equipment and supplies; 
describes all powers of supervision or oversight of the licensee's 
employee(s) to be exercised by the principal; and details all 
procedures for the administration or management of in-plant 
arrangements between the parties; and
    (2) The arrangement is not an artifice for a payment or other 
unlawful benefit to the principal.
0
30. In Sec.  515.42, revise paragraphs (a), (b), (c), and (f) to read 
as follows:


Sec.  515.42  Forwarder and carrier compensation; fees.

    (a) Disclosure of principal. The identity of the shipper must 
always be disclosed in the shipper identification box on the bill of 
lading. The licensed freight forwarder's name may appear with the name 
of the shipper, but the forwarder must be identified as the shipper's 
agent.
    (b) Certification required for compensation. A common carrier may 
pay compensation to a licensed freight forwarder only pursuant to such 
common carrier's tariff provisions. When a common carrier's tariff 
provides for the payment of compensation, such compensation shall be 
paid on any shipment forwarded on behalf of others where the forwarder 
has provided a certification as prescribed in paragraph (c) of this 
section and the shipper has been disclosed on the bill of lading as 
provided for in paragraph (a) of this section. The common carrier shall 
be entitled to rely on such certification unless it knows that the 
certification is incorrect. The common carrier shall retain such 
certifications for a period of five (5) years.
    (c) Form of certification. When a licensed freight forwarder is 
entitled to compensation, the forwarder shall provide the common 
carrier with a certification which indicates that the forwarder has 
performed the required services that entitle it to compensation. The 
required certification may be provided electronically by the forwarder 
or may be placed on one copy of the relevant bill of lading, a summary 
statement from the forwarder, the forwarder's compensation invoice, or 
as an endorsement on the carrier's

[[Page 61557]]

compensation check. Electronic certification must contain confirmations 
by the forwarder and the carrier identifying the shipments upon which 
forwarding compensation may be paid. Each forwarder shall retain 
evidence in its shipment files that the forwarder, in fact, has 
performed the required services enumerated on the certification. The 
certification shall read as follows:

    The undersigned hereby certifies that neither it nor any holding 
company, subsidiary, affiliate, officer, director, agent or 
executive of the undersigned has a beneficial interest in this 
shipment; that it is the holder of valid FMC License No., issued by 
the Federal Maritime Commission and has performed the following 
services:
    (1) Engaged, booked, secured, reserved, or contracted directly 
with the carrier or its agent for space aboard a vessel or confirmed 
the availability of that space; and
    (2) Prepared and processed the ocean bill of lading, dock 
receipt, or other similar document with respect to the shipment.

* * * * *
    (f) Compensation; services performed by underlying carrier; 
exemptions. No licensed freight forwarder shall charge or collect 
compensation in the event the underlying common carrier, or its agent, 
has, at the request of such forwarder, performed any of the forwarding 
services set forth in Sec.  515.2(h), unless such carrier or agent is 
also a licensed freight forwarder, or unless no other licensed freight 
forwarder is willing and able to perform such services.
* * * * *
0
31. Add appendices A, B, C, D, E, and F to part 515 to read as follows:

Appendix A to Part 515--Ocean Transportation Intermediary (OTI) Bond 
Form [Form 48]

Form FMC-48

Federal Maritime Commission

    Ocean Transportation Intermediary (OTI) Bond (Section 19, 
Shipping Act of 1984 (46 U.S.C. 40901-40904)) _____-- [indicate 
whether NVOCC or Freight Forwarder], as Principal (hereinafter 
``Principal''), and _____--, as Surety (hereinafter ``Surety'') are 
held and firmly bound unto the United States of America in the sum 
of $_____-- for the payment of which sum we bind ourselves, our 
heirs, executors, administrators, successors and assigns, jointly 
and severally.
    Whereas, Principal operates as an OTI in the waterborne foreign 
commerce of the United States in accordance with the Shipping Act of 
1984, 46 U.S.C. 40101-41309, and, if necessary, has a valid tariff 
published pursuant to 46 CFR part 515 and 520, and pursuant to 
section 19 of the Shipping Act (46 U.S.C. 40901-40904), files this 
bond with the Commission;
    Whereas, this bond is written to ensure compliance by the 
Principal with section 19 of the Shipping Act (46 U.S.C. 40901-
40904), and the rules and regulations of the Federal Maritime 
Commission relating to evidence of financial responsibility for OTIs 
(46 CFR Part 515), this bond shall be available to pay any judgment 
obtained or any settlement made pursuant to a claim under 46 CFR 
515.23 for damages against the Insured arising from the Insured's 
transportation-related activities under the Shipping Act, or order 
for reparations issued pursuant to section 11 of the Shipping Act 
(46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed 
against the Principal pursuant to section 13 of the Shipping Act (46 
U.S.C. 41107-41109); provided, however, that the Surety's obligation 
for a group or association of OTIs shall extend only to such 
damages, reparations or penalties described herein as are not 
covered by another surety bond, insurance policy or guaranty held by 
the OTI(s) against which a claim or final judgment has been brought 
and that Surety's total obligation hereunder shall not exceed the 
amount per OTI provided in 46 CFR 515.21 or the amount per group or 
association of OTIs provided for in 46 CFR 515.21 in aggregate.
    Now, Therefore, The condition of this obligation is that the 
penalty amount of this bond shall be available to pay any judgment 
or any settlement made pursuant to a claim under 46 CFR 515.23 for 
damages against the Principal arising from the Principal's 
transportation-related activities or order for reparations issued 
pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 
41305-41307(a)), or any penalty assessed against the Principal 
pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109).
    This bond shall inure to the benefit of any and all persons who 
have obtained a judgment or a settlement made pursuant to a claim 
under 46 CFR 515.23 for damages against the Principal arising from 
its transportation-related activities or order of reparation issued 
pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-41302, 
41305-41307(a)), and to the benefit of the Federal Maritime 
Commission for any penalty assessed against the Principal pursuant 
to section 13 of the Shipping Act (46 U.S.C. 41107-41109). However, 
the bond shall not apply to shipments of used household goods and 
personal effects for the account of the Department of Defense or the 
account of federal civilian executive agencies shipping under the 
International Household Goods Program administered by the General 
Services Administration.
    The liability of the Surety shall not be discharged by any 
payment or succession of payments hereunder, unless and until such 
payment or payments shall aggregate the penalty amount of this bond, 
and in no event shall the Surety's total obligation hereunder exceed 
said penalty amount, regardless of the number of claims or 
claimants.
    This bond is effective the _-- day of ______--, ___-- and shall 
continue in effect until discharged or terminated as herein 
provided. The Principal or the Surety may at any time terminate this 
bond by mail or email ([email protected]) written notice to the Director, 
Bureau of Certification and Licensing, Federal Maritime Commission, 
Washington, DC. 20573. Such termination shall become effective 
thirty (30) days after receipt of said notice by the Commission. The 
Surety shall not be liable for any transportation-related activities 
of the Principal after the expiration of the 30-day period but such 
termination shall not affect the liability of the Principal and 
Surety for any event occurring prior to the date when said 
termination becomes effective.
    The Surety consents to be sued directly in respect of any bona 
fide claim owed by Principal for damages, reparations or penalties 
arising from the transportation-related activities under the 
Shipping Act of Principal in the event that such legal liability has 
not been discharged by the Principal or Surety after a claimant has 
obtained a final judgment (after appeal, if any) against the 
Principal from a United States Federal or State Court of competent 
jurisdiction and has complied with the procedures for collecting on 
such a judgment pursuant to 46 CFR 515.23, the Federal Maritime 
Commission, or where all parties and claimants otherwise mutually 
consent, from a foreign court, or where such claimant has become 
entitled to payment of a specified sum by virtue of a compromise 
settlement agreement made with the Principal and/or Surety pursuant 
to 46 CFR 515.23, whereby, upon payment of the agreed sum, the 
Surety is to be fully, irrevocably and unconditionally discharged 
from all further liability to such claimant; provided, however, that 
Surety's total obligation hereunder shall not exceed the amount set 
forth in 46 CFR 515.21, as applicable.
    The underwriting Surety will immediately notify the Director, 
Bureau of Certification and Licensing, Federal Maritime Commission, 
Washington, DC. 20573, in writing by mail or email ([email protected]), of 
all claims made, lawsuits filed, judgments rendered, and payments 
made against this bond.
    Signed and sealed this __-- day of _____--, __--.

(Please type name of signer under each signature.)

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Individual Principal or Partner

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Business Address

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Individual Principal or Partner

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Business Address

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Individual Principal or Partner

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Business Address

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Trade Name, If Any

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Corporate Principal

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State of Incorporation

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Trade Name, If Any

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Business Address

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By


[[Page 61558]]


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Title

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(Affix Corporate Seal)

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Corporate Surety

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Business Address

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By

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Title

(Affix Corporate Seal)

Appendix B Part 515--Ocean Transportation Intermediary (OTI) Insurance 
Form [Form 67]

Form FMC-67

Federal Maritime Commission

Ocean Transportation Intermediary (OTI) Insurance

Form Furnished as Evidence of Financial Responsibility Under 46 U.S.C. 
40901-40904

    This is to certify, that the (Name of Insurance Company), 
(hereinafter ``Insurer'') of (Home Office Address of Company) has 
issued to (OTI or Group or Association of OTIs [indicate whether 
NVOCC(s) or Freight Forwarder(s)]) (hereinafter ``Insured'') of 
(Address of OTI or Group or Association of OTIs) a policy or 
policies of insurance for purposes of complying with the provisions 
of Section 19 of the Shipping Act of 1984 (46 U.S.C. 40901-40904) 
and the rules and regulations, as amended, of the Federal Maritime 
Commission, which provide compensation for damages, reparations or 
penalties arising from the transportation-related activities of 
Insured, and made pursuant to the Shipping Act of 1984 (46 U.S.C. 
40101-41309) (Shipping Act).
    Whereas, the Insured is or may become an OTI subject to the 
Shipping Act and the rules and regulations of the Federal Maritime 
Commission, or is or may become a group or association of OTIs, and 
desires to establish financial responsibility in accordance with 
section 19 of the Shipping Act (46 U.S.C. 40901-40904), files with 
the Commission this Insurance Form as evidence of its financial 
responsibility and evidence of a financial rating for the Insurer of 
Class V or higher under the Financial Size Categories of A.M. Best & 
Company or equivalent from an acceptable international rating 
organization on such organization's letterhead or designated form, 
or, in the case of insurance provided by Underwriters at Lloyd's, 
documentation verifying membership in Lloyd's, or, in the case of 
surplus lines insurers, documentation verifying inclusion on a 
current ``white list'' issued by the Non-Admitted Insurers' 
Information Office of the National Association of Insurance 
Commissioners.
    Whereas, the Insurance is written to assure compliance by the 
Insured with section 19 of the Shipping Act (46 U.S.C. 40901-40904), 
and the rules and regulations of the Federal Maritime Commission 
relating to evidence of financial responsibility for OTIs, this 
Insurance shall be available to pay any judgment obtained or any 
settlement made pursuant to a claim under 46 CFR 515.23 for damages 
against the Insured arising from the Insured's transportation-
related activities under the Shipping Act, or order for reparations 
issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-
41302, 41305-41307(a)), or any penalty assessed against the Insured 
pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109); 
provided, however, that Insurer's obligation for a group or 
association of OTIs shall extend only to such damages, reparations 
or penalties described herein as are not covered by another 
insurance policy, guaranty or surety bond held by the OTI(s) against 
which a claim or final judgment has been brought and that Insurer's 
total obligation hereunder shall not exceed the amount per OTI set 
forth in 46 CFR 515.21 or the amount per group or association of 
OTIs set forth in 46 CFR 515.21 in aggregate.
    Whereas, the Insurer certifies that it has sufficient and 
acceptable assets located in the United States to cover all 
liabilities of Insured herein described, this Insurance shall inure 
to the benefit of any and all persons who have a bona fide claim 
against the Insured pursuant to 46 CFR 515.23 arising from its 
transportation-related activities under the Shipping Act, or order 
of reparation issued pursuant to section 11 of the Shipping Act (46 
U.S.C. 41301-41302, 41305-41307(a)), and to the benefit of the 
Federal Maritime Commission for any penalty assessed against the 
Insured pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-
41109).
    The Insurer consents to be sued directly in respect of any bona 
fide claim owed by Insured for damages, reparations or penalties 
arising from the transportation-related activities under the 
Shipping Act, of Insured in the event that such legal liability has 
not been discharged by the Insured or Insurer after a claimant has 
obtained a final judgment (after appeal, if any) against the Insured 
from a United States Federal or State Court of competent 
jurisdiction and has complied with the procedures for collecting on 
such a judgment pursuant to 46 CFR 515.23, the Federal Maritime 
Commission, or where all parties and claimants otherwise mutually 
consent, from a foreign court, or where such claimant has become 
entitled to payment of a specified sum by virtue of a compromise 
settlement agreement made with the Insured and/or Insurer pursuant 
to 46 CFR 515.23, whereby, upon payment of the agreed sum, the 
Insurer is to be fully, irrevocably and unconditionally discharged 
from all further liability to such claimant; provided, however, that 
Insurer's total obligation hereunder shall not exceed the amount per 
OTI set forth in 46 CFR 515.21 or the amount per group or 
association of OTIs set forth in 46 CFR 515.21.
    The liability of the Insurer shall not be discharged by any 
payment or succession of payments hereunder, unless and until such 
payment or payments shall aggregate the penalty of the Insurance in 
the amount per member OTI set forth in 46 CFR 515.21, or the amount 
per group or association of OTIs set forth in 46 CFR 515.21, 
regardless of the financial responsibility or lack thereof, or the 
solvency or bankruptcy, of Insured. The insurance evidenced by this 
undertaking shall be applicable only in relation to incidents 
occurring on or after the effective date and before the date 
termination of this undertaking becomes effective. The effective 
date of this undertaking shall be __-- day of ____--, __--, and 
shall continue in effect until discharged or terminated as herein 
provided. The Insured or the Insurer may at any time terminate the 
Insurance by mail or email ([email protected]) written notice to the 
Director, Bureau of Certification and Licensing, Federal Maritime 
Commission, Washington, DC 20573. Such termination shall become 
effective thirty (30) days after receipt of said notice by the 
Commission. The Insurer shall not be liable for any transportation-
related activities under the Shipping Act of the Insured after the 
expiration of the 30-day period but such termination shall not 
affect the liability of the Insured and Insurer for such activities 
occurring prior to the date when said termination becomes effective.
    (Name of Agent) ___-- domiciled in the United States, with 
offices located in the United States, at ___-- is hereby designated 
as the Insurer's agent for service of process for the purposes of 
enforcing the Insurance certified to herein.
    If more than one insurer joins in executing this document, that 
action constitutes joint and several liability on the part of the 
insurers.
    The Insurer will immediately notify the Director, Bureau of 
Certification and Licensing, Federal Maritime Commission, 
Washington, DC 20573, in writing by mail or email ([email protected]), of 
all claims made, lawsuits filed, judgments rendered, and payments 
made against the Insurance.
    Signed and sealed this __-- day of _____--, __--.

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Signature of Official signing on behalf of Insurer

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Type Name and Title of signer

    This Insurance Form has been filed with the Federal Maritime 
Commission.

Appendix C to Part 515--Ocean Transportation Intermediary (OTI) 
Guaranty Form [Form 68]

Form FMC-68

Federal Maritime Commission

    Guaranty in Respect of Ocean Transportation Intermediary (OTI) 
Liability for Damages, Reparations or Penalties Arising from 
Transportation-Related Activities Under the Shipping Act of 1984 (46 
U.S.C. 40101-41309) (Shipping Act).
    1. Whereas _________-- (Name of Applicant [indicate whether 
NVOCC or Freight Forwarder]) (hereinafter ``Applicant'') is or may 
become an Ocean Transportation Intermediary (``OTI'') subject to the 
Shipping Act of 1984 (46 U.S.C. 40101-41309) and the rules and 
regulations of the Federal Maritime Commission (FMC), or is or may 
become a group or association of OTIs, and desires to establish its 
financial responsibility in accordance with section 19 of the 
Shipping Act (46 U.S.C. 41107-41109), then, provided

[[Page 61559]]

that the FMC shall have accepted, as sufficient for that purpose, 
the Applicant's application, supported by evidence of a financial 
rating for the Guarantor of Class V or higher under the Financial 
Size Categories of A.M. Best & Company or equivalent from an 
acceptable international rating organization on such rating 
organization's letterhead or designated form, or, in the case of 
Guaranty provided by Underwriters at Lloyd's, documentation 
verifying membership in Lloyd's, or, in the case of surplus lines 
insurers, documentation verifying inclusion on a current ``white 
list'' issued by the Non-Admitted Insurers' Information Office of 
the National Association of Insurance Commissioners, the undersigned 
Guarantor certifies that it has sufficient and acceptable assets 
located in the United States to cover all damages arising from the 
transportation-related activities of the covered OTI as specified 
under the Shipping Act.
    2. Whereas, this Guaranty is written to ensure compliance by the 
Applicant with section 19 of the Shipping Act (46 U.S.C. 40901-
40904), and the rules and regulations of the Federal Maritime 
Commission relating to evidence of financial responsibility for OTIs 
(46 CFR part 515), this guaranty shall be available to pay any 
judgment obtained or any settlement made pursuant to a claim under 
46 CFR 515.23 for damages against the Applicant arising from the 
Applicant's transportation-related activities under the Shipping 
Act, or order for reparations issued pursuant to section 11 of the 
Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty 
assessed against the Applicant pursuant to section 13 of the 
Shipping Act (46 U.S.C. 41107-41109); provided, however, that the 
Guarantor's obligation for a group or association of OTIs shall 
extend only to such damages, reparations or penalties described 
herein as are not covered by another surety bond, insurance policy, 
or guaranty held by the OTI(s) against which a claim or final 
judgment has been brought and that Guarantor's total obligation 
hereunder shall not exceed the amount per OTI provided for in 46 CFR 
515.21, in aggregate.
    3. Now, Therefore, The condition of this obligation is that the 
penalty amount of this Guaranty shall be available to pay any 
judgment obtained or any settlement made pursuant to a claim under 
46 CFR 515.23 for damages against the Applicant arising from the 
Applicant's transportation-related activities or order for 
reparations issued pursuant to section 11 of the Shipping Act (46 
U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against 
the Principal pursuant to section 13 of the Shipping Act (46 U.S.C. 
41107-41109).
    4. The undersigned Guarantor hereby consents to be sued directly 
in respect of any bona fide claim owed by Applicant for damages, 
reparations or penalties arising from Applicant's transportation-
related activities under the Shipping Act, in the event that such 
legal liability has not been discharged by the Applicant after any 
such claimant has obtained a final judgment (after appeal, if any) 
against the Applicant from a United States Federal or State Court of 
competent jurisdiction and has complied with the procedures for 
collecting on such a judgment pursuant to 46 CFR 515.23, the FMC, or 
where all parties and claimants otherwise mutually consent, from a 
foreign court, or where such claimant has become entitled to payment 
of a specified sum by virtue of a compromise settlement agreement 
made with the Applicant and/or Guarantor pursuant to 46 CFR 515.23, 
whereby, upon payment of the agreed sum, the Guarantor is to be 
fully, irrevocably and unconditionally discharged from all further 
liability to such claimant. In the case of a guaranty covering the 
liability of a group or association of OTIs, Guarantor's obligation 
extends only to such damages, reparations or penalties described 
herein as are not covered by another insurance policy, guaranty or 
surety bond held by the OTI(s) against which a claim or final 
judgment has been brought.
    5. The Guarantor's liability under this Guaranty in respect to 
any claimant shall not exceed the amount of the guaranty; and the 
aggregate amount of the Guarantor's liability under this Guaranty 
shall not exceed the amount per OTI set forth in 46 CFR 515.21, or 
the amount per group or association of OTIs set forth in 46 CFR 
515.21 in aggregate.
    6. The Guarantor's liability under this Guaranty shall attach 
only in respect of such activities giving rise to a cause of action 
against the Applicant, in respect of any of its transportation-
related activities under the Shipping Act, occurring after the 
Guaranty has become effective, and before the expiration date of 
this Guaranty, which shall be the date thirty (30) days after the 
date of receipt of mail or email ([email protected]) written notice to the 
Director, Bureau of Certification and Licensing, Federal Maritime 
Commission, Washington, DC. 20573, that either Applicant or the 
Guarantor has elected to terminate this Guaranty. The Guarantor and/
or Applicant specifically agree to file such written notice of 
cancellation.
    7. Guarantor shall not be liable for payments of any of the 
damages, reparations or penalties hereinbefore described which arise 
as the result of any transportation-related activities of Applicant 
after the cancellation of the Guaranty, as herein provided, but such 
cancellation shall not affect the liability of the Guarantor for the 
payment of any such damages, reparations or penalties prior to the 
date such cancellation becomes effective.
    8. Guarantor shall pay, subject to the limit of the amount per 
OTI set forth in 46 CFR 515.21, directly to a claimant any sum or 
sums which Guarantor, in good faith, determines that the Applicant 
has failed to pay and would be held legally liable by reason of 
Applicant's transportation-related activities, or its legal 
responsibilities under the Shipping Act and the rules and 
regulations of the FMC, made by Applicant while this agreement is in 
effect, regardless of the financial responsibility or lack thereof, 
or the solvency or bankruptcy, of Applicant.
    9. The Applicant or Guarantor will immediately notify the 
Director, Bureau of Certification and Licensing, Federal Maritime 
Commission, Washington, DC. 20573, in writing by mail or email 
([email protected]), of all claims made, lawsuits filed, judgments 
rendered, and payments made under the Guaranty.
    10. Applicant and Guarantor agree to handle the processing and 
adjudication of claims by claimants under the Guaranty established 
herein in the United States, unless by mutual consent of all parties 
and claimants another country is agreed upon. Guarantor agrees to 
appoint an agent for service of process in the United States.
    11. This Guaranty shall be governed by the laws in the State of 
_-- to the extent not inconsistent with the rules and regulations of 
the FMC.
    12. This Guaranty is effective the day of _--, _____--, ___-- 
12:01 a.m., standard time at the address of the Guarantor as stated 
herein and shall continue in force until terminated as herein 
provided.
    13. The Guarantor hereby designates as the Guarantor's legal 
agent for service of process domiciled in the United States 
_______--, with offices located in the United States at _______--, 
for the purposes of enforcing the Guaranty described herein.

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(Place and Date of Execution)

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(Type Name of Guarantor)

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(Type Address of Guarantor)

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By

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(Signature and Title)

Appendix D to Part 515--Ocean Transportation Intermediary (OTI) Group 
Bond Form [FMC-69]

Form FMC-69

Federal Maritime Commission

    Ocean Transportation Intermediary (OTI) Group Supplemental 
Coverage Bond Form (Shipping Act of 1984 (46 U.S.C. 40101-41309)) 
(Shipping Act).
    _____-- [indicate whether NVOCC or Freight Forwarder], as 
Principal (hereinafter ``Principal''), and _________-- as Surety 
(hereinafter ``Surety'') are held and firmly bound unto the United 
States of America in the sum of $_______-- for the payment of which 
sum we bind ourselves, our heirs, executors, administrators, 
successors and assigns, jointly and severally.
    Whereas, (Principal) ________-- operates as a group or 
association of OTIs in the waterborne foreign commerce of the United 
States and pursuant to section 19 of the Shipping Act of 1984 (46 
U.S.C. 40901-40904), files this bond with the Federal Maritime 
Commission;
    Whereas, this group bond is written to ensure compliance by the 
OTIs, enumerated in Appendix A of this bond, with section 19 of the 
Shipping Act (46 U.S.C. 40901-40904), and the rules and regulations 
of the Federal Maritime Commission relating to evidence of financial 
responsibility for OTIs (46 CFR Part 515), this group bond shall be 
available to pay any judgment obtained or any settlement made 
pursuant to a claim under 46 CFR 515.23 for damages against such 
OTIs arising from OTI transportation-related activities under the 
Shipping Act, or order for

[[Page 61560]]

reparations issued pursuant to section 11 of the Shipping Act (46 
U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against 
one or more OTI members pursuant to section 13 of the Shipping Act 
(46 U.S.C. 41107-41109); provided, however, that the Surety's 
obligation for a group or association of OTIs shall extend only to 
such damages, reparations or penalties described herein as are not 
covered by another surety bond, insurance policy or guaranty held by 
the OTI(s) against which a claim or final judgment has been brought 
and that Surety's total obligation hereunder shall not exceed the 
amount per OTI provided for in 46 CFR 515.21 or the amount per group 
or association of OTIs provided for in 46 CFR 515.21 in aggregate.
    Now, therefore, the conditions of this obligation are that the 
penalty amount of this bond shall be available to pay any judgment 
obtained or any settlement made pursuant to a claim under 46 CFR 
515.23 against the OTIs enumerated in Appendix A of this bond for 
damages arising from any or all of the identified OTIs' 
transportation-related activities under the Shipping Act (46 U.S.C. 
40101-41309), or order for reparations issued pursuant to section 11 
of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any 
penalty assessed pursuant to section 13 of the Shipping Act (46 
U.S.C. 41107-41109), that are not covered by the identified OTIs' 
individual insurance policy(ies), guaranty(ies) or surety bond(s).
    This group bond shall inure to the benefit of any and all 
persons who have obtained a judgment or made a settlement pursuant 
to a claim under 46 CFR 515.23 for damages against any or all of the 
OTIs identified in Appendix A not covered by said OTIs' insurance 
policy(ies), guaranty(ies) or surety bond(s) arising from said OTIs' 
transportation-related activities under the Shipping Act, or order 
for reparation issued pursuant to section 11 of the Shipping Act, 
and to the benefit of the Federal Maritime Commission for any 
penalty assessed against said OTIs pursuant to section 13 of the 
Shipping Act (46 U.S.C. 41107-41109). However, the bond shall not 
apply to shipments of used household goods and personal effects for 
the account of the Department of Defense or the account of federal 
civilian executive agencies shipping under the International 
Household Goods Program administered by the General Services 
Administration.
    The Surety consents to be sued directly in respect of any bona 
fide claim owed by any or all of the OTIs identified in Appendix A 
for damages, reparations or penalties arising from the 
transportation-related activities under the Shipping Act of the OTIs 
in the event that such legal liability has not been discharged by 
the OTIs or Surety after a claimant has obtained a final judgment 
(after appeal, if any) against the OTIs from a United States Federal 
or State Court of competent jurisdiction and has complied with the 
procedures for collecting on such a judgment pursuant to 46 CFR 
515.23, the Federal Maritime Commission, or where all parties and 
claimants otherwise mutually consent, from a foreign court, or where 
such claimant has become entitled to payment of a specified sum by 
virtue of a compromise settlement agreement made with the OTI(s) 
and/or Surety pursuant to 46 CFR 515.23, whereby, upon payment of 
the agreed sum, the Surety is to be fully, irrevocably and 
unconditionally discharged from all further liability to such 
claimant(s).
    The liability of the Surety shall not be discharged by any 
payment or succession of payments hereunder, unless and until such 
payment or payments shall aggregate the penalty of this bond, and in 
no event shall the Surety's total obligation hereunder exceed the 
amount per member OTI set forth in 46 CFR 515.21, identified in 
Appendix A, or the amount per group or association of OTIs set forth 
in 46 CFR 515.21, regardless of the number of OTIs, claims or 
claimants.
    This bond is effective the _-- day of _____--, ___--, and shall 
continue in effect until discharged or terminated as herein 
provided. The Principal or the Surety may at any time terminate this 
bond by mail or email ([email protected]) written notice to the Director, 
Bureau of Certification and Licensing, Federal Maritime Commission, 
Washington, DC. 20573. Such termination shall become effective 
thirty (30) days after receipt of said notice by the Commission. The 
Surety shall not be liable for any transportation-related activities 
of the OTIs identified in Appendix A as covered by the Principal 
after the expiration of the 30-day period, but such termination 
shall not affect the liability of the Principal and Surety for any 
transportation-related activities occurring prior to the date when 
said termination becomes effective.
    The Principal or financial responsibility provider will promptly 
notify the underwriting Surety in writing and the Director, Bureau 
of Certification and Licensing, Federal Maritime Commission, 
Washington, DC, 20573, by mail or email ([email protected]), of any 
additions, deletions or changes to the OTIs enumerated in Appendix 
A. In the event of additions to Appendix A, coverage will be 
effective upon receipt of such notice, in writing, by the Commission 
at its office in Washington, DC. In the event of deletions to 
Appendix A, termination of coverage for such OTI(s) shall become 
effective 30 days after receipt of written notice by the Commission. 
Neither the Principal nor the Surety shall be liable for any 
transportation-related activities of the OTI(s) deleted from 
Appendix A that occur after the expiration of the 30-day period, but 
such termination shall not affect the liability of the Principal and 
Surety for any transportation-related activities of said OTI(s) 
occurring prior to the date when said termination becomes effective.
    The underwriting Surety will immediately notify the Director, 
Bureau of Certification and Licensing, Federal Maritime Commission, 
Washington, DC. 20573, in writing by mail or email ([email protected]), of 
all claims made, lawsuits filed, judgments rendered, and payments 
made against this group bond.
    Signed and sealed this _-- day of ___--, __--,

(Please type name of signer under each signature).

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Individual Principal or Partner

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Business Address

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Individual Principal or Partner

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Business Address

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Individual Principal or Partner

-----------------------------------------------------------------------
Business Address

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Trade Name, if Any

-----------------------------------------------------------------------
Corporate Principal

-----------------------------------------------------------------------
Place of Incorporation

-----------------------------------------------------------------------
Trade Name, if Any

-----------------------------------------------------------------------
Business Address (Affix Corporate Seal)

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By

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Title

-----------------------------------------------------------------------
Principal's Agent for Service of Process (Required if Principal is 
not a U.S. Corporation)

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Agent's Address

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Corporate Surety

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Business Address (Affix Corporate Seal)

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By

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Title

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Appendix E to Part 515--Optional Rider for Additional NVOCC Financial 
Responsibility (Optional Rider to Form FMC-48) [FORM 48A]

FMC-48A, OMB No. 3072-0018, (04/06/04)

Optional Rider for Additional NVOCC Financial Responsibility [Optional 
Rider to Form FMC-48]

RIDER

    The undersigned _________--, as Principal and _________--, as 
Surety do hereby agree that the existing Bond No. _________-- to the 
United States of America and filed with the Federal Maritime 
Commission pursuant to section 19 of the Shipping Act of 1984 is 
modified as follows:
    1. The following condition is added to this Bond:
    a. An additional condition of this Bond is that $___________-- 
(payable in U.S. Dollars or Renminbi Yuan at the option of the 
Surety) shall be available to pay any fines and penalties for 
activities in the U.S.-China trades imposed by the Ministry of 
Communications of the People's Republic of China (``MOC'') or its 
authorized competent communications department of the people's 
government of the province, autonomous

[[Page 61561]]

region or municipality directly under the Central Government or the 
State Administration of Industry and Commerce pursuant to the 
Regulations of the People's Republic of China on International 
Maritime Transportation and the Implementing Rules of the 
Regulations of the PRC on International Maritime Transportation 
promulgated by MOC Decree No. 1, January 20, 2003.
    b. The liability of the Surety shall not be discharged by any 
payment or succession of payments pursuant to section 1 of this 
Rider, unless and until the payment or payments shall aggregate the 
amount set forth in section 1a of this Rider. In no event shall the 
Surety's obligation under this Rider exceed the amount set forth in 
section 1a regardless of the number of claims.
    c. The total amount of coverage available under this Bond and 
all of its riders, available pursuant to the terms of section 1(a.) 
of this rider, equals $_______--. The total amount of aggregate 
coverage equals or exceeds $125,000.
    d. This Rider is effective the __-- day of _____--, 20_--, and 
shall continue in effect until discharged, terminated as herein 
provided, or upon termination of the Bond in accordance with the 
sixth paragraph of the Bond. The Principal or the Surety may at any 
time terminate this Rider by mail or email ([email protected]) written 
notice to the Director, Bureau of Certification and Licensing, 
Federal Maritime Commission, Washington, DC 20573, accompanied by 
proof of transmission of notice to MOC. Such termination shall 
become effective thirty (30) days after receipt of said notice and 
proof of transmission by the Federal Maritime Commission. The Surety 
shall not be liable for fines or penalties imposed on the Principal 
after the expiration of the 30-day period but such termination shall 
not affect the liability of the Principal and Surety for any fine or 
penalty imposed prior to the date when said termination becomes 
effective.
    2. This Bond remains in full force and effect according to its 
terms except as modified above.
    In witness whereof we have hereunto set our hands and seals on 
this day of _____--, 20_--,

[Principal],

By:--------------------------------------------------------------------
[Surety],

By:--------------------------------------------------------------------

Appendix F to Part 515--Optional Rider for Additional NVOCC Financial 
Responsibility for Group Bonds [Optional Rider to Form FMC-69]

FMC-69A, OMB No. 3072-0018 (04/06/04)

Optional Rider for Additional NVOCC Financial Responsibility for Group 
Bonds [Optional Rider to Form FMC-69]

RIDER

    The undersigned ________--, as Principal and ________--, as 
Surety do hereby agree that the existing Bond No. _____-- to the 
United States of America and filed with the Federal Maritime 
Commission pursuant to section 19 of the Shipping Act of 1984 is 
modified as follows:
    1. The following condition is added to this Bond:
    a. An additional condition of this Bond is that $ ___-- (payable 
in U.S. Dollars or Renminbi Yuan at the option of the Surety) shall 
be available to any NVOCC enumerated in an Appendix to this Rider to 
pay any fines and penalties for activities in the U.S.-China trades 
imposed by the Ministry of Communications of the People's Republic 
of China (``MOC'') or its authorized competent communications 
department of the people's government of the province, autonomous 
region or municipality directly under the Central Government or the 
State Administration of Industry and Commerce pursuant to the 
Regulations of the People's Republic of China on International 
Maritime Transportation and the Implementing Rules of the 
Regulations of the PRC on International Maritime Transportation 
promulgated by MOC Decree No. 1, January 20, 2003. Such amount is 
separate and distinct from the bond amount set forth in the first 
paragraph of this Bond. Payment under this Rider shall not reduce 
the bond amount in the first paragraph of this Bond or affect its 
availability. The Surety shall indicate that $50,000 is available to 
pay such fines and penalties for each NVOCC listed on appendix A to 
this Rider wishing to exercise this option.
    b. The liability of the Surety shall not be discharged by any 
payment or succession of payments pursuant to section 1 of this 
Rider, unless and until the payment or payments shall aggregate the 
amount set forth in section 1a of this Rider. In no event shall the 
Surety's obligation under this Rider exceed the amount set forth in 
section 1a regardless of the number of claims.
    c. This Rider is effective the ___-- day of _______--, 20_-- and 
shall continue in effect until discharged, terminated as herein 
provided, or upon termination of the Bond in accordance with the 
sixth paragraph of the Bond. The Principal or the Surety may at any 
time terminate this Rider by mail or email ([email protected]) written 
notice to the Director, Bureau of Certification and Licensing, 
Federal Maritime Commission, Washington, DC. 20573, accompanied by 
proof of transmission of notice to MOC. Such termination shall 
become effective thirty (30) days after receipt of said notice and 
proof of transmission by the Federal Maritime Commission. The Surety 
shall not be liable for fines or penalties imposed on the Principal 
after the expiration of the 30-day period but such termination shall 
not affect the liability of the Principal and Surety for any fine or 
penalty imposed prior to the date when said termination becomes 
effective.
    2. This Bond remains in full force and effect according to its 
terms except as modified above.
    In witness whereof we have hereunto set our hands and seals on 
this ___-- day of ___--, 20_--.

[Principal],

By:--------------------------------------------------------------------
[Surety],

By:--------------------------------------------------------------------

Privacy Act and Paperwork Reduction Act Notice

    The collection of this information is authorized generally by 
Section 19 of the Shipping Act of 1984 (46 U.S.C. 40901-40904). This is 
an optional form. Submission is completely voluntary. Failure to submit 
this form will in no way impact the Federal Maritime Commission's 
assessment of your firm's financial responsibility.
    You are not required to provide the information requested on a form 
that is subject to the Paperwork Reduction Act unless the form displays 
a valid OMB control number. Copies of this form will be maintained 
until the corresponding license has been revoked.
    The time needed to complete and file this form will vary depending 
on individual circumstances. The estimated average time is: 
Recordkeeping, 20 minutes; Learning about the form, 20 minutes; 
Preparing and sending the form to the FMC, 20 minutes.
    If you have comments concerning the accuracy of these time 
estimates or suggestions for making this form simpler, we would be 
happy to hear from you. You can write to the Secretary, Federal 
Maritime Commission, 800 North Capitol Street NW., Washington, DC 
20573-0001 or email: [email protected].

    By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2014-24003 Filed 10-9-14; 8:45 am]
BILLING CODE 6730-01-P