subchapter a—general and … d—public requests for information 501.41public requests for...

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SUBCHAPTER A—GENERAL AND ADMINISTRATIVEPROVISIONS

PART 500—EMPLOYEE ETHICALCONDUCT STANDARDS AND FI-NANCIAL DISCLOSURE REGULA-TIONS

AUTHORITY: 5 U.S.C. 553; 5 U.S.C. 7301; 46U.S.C. app. 1716.

§ 500.101 Cross-referrence to employeeethical conduct standards and fi-nancial disclosure regulations.

Employees of the Federal MaritimeCommission (‘‘FMC’’) should refer tothe executive branch-wide Standards ofEthical Conduct at 5 CFR part 2635, andthe executive branch-wide financialdisclosure regulation at 5 CFR part2634.[60 FR 9787, Feb. 22, 1995]

PART 501—THE FEDERAL MARITIMECOMMISSION—GENERAL

Subpart A—Organization and Functions

Sec.501.1 Purpose.501.2 General.501.3 Organizational components of the Fed-

eral Maritime Commission.501.4 Lines of responsibility.501.5 Functions of the organizational com-

ponents of the Federal Maritime Com-mission.

Subpart B—Official Seal

501.11 Official seal.

Subpart C—Delegation and Redelegationof Authorities

501.21 Delegation of authorities.501.22 [Reserved]501.23 Delegation to the General Counsel.501.24 Delegation to the Secretary.501.25 Delegation to and redelegation by the

Managing Director.501.26 Delegation to the Director, Bureau of

Economics and Agreement Analysis.501.27 Delegation to and redelegation by the

Director, Bureau of Tariffs, Certificationand Licensing.

501.28 Delegation to the Director, Bureau ofEnforcement.

501.29 [Reserved]501.30 Delegation to and redelegation by the

Director, Bureau of Administration.

Subpart D—Public Requests for Information

501.41 Public requests for information anddecisions.

APPENDIX A TO PART 501—ORGANIZATIONCHART

AUTHORITY: 5 U.S.C. 551–557, 701–706, 2903and 6304; 31 U.S.C. 3721; 41 U.S.C. 414 and 418;44 U.S.C. 501–520 and 3501–3520; 46 U.S.C. app.801–848, 876, 1111, and 1701–1720; Reorganiza-tion Plan No. 7 of 1961, 26 FR 7315, August 12,1961; Pub. L. 89–56, 79 Stat. 195; 5 CFR Part2638.

SOURCE: 59 FR 954, Jan. 7, 1994, unless oth-erwise noted.

Subpart A—Organization andFunctions

§ 501.1 Purpose.

This part describes the organization,functions and Official Seal of, and thedelegation of authority within, theFederal Maritime Commission (‘‘Com-mission’’).

§ 501.2 General.

(a) Statutory functions. The Commis-sion regulates common carriers bywater and other persons involved in theforeign and domestic offshore com-merce of the U.S. under provisions ofthe Shipping Act, 1916, (46 U.S.C. app.801–842); the Intercoastal Shipping Act,1933 (46 U.S.C. app. 843–848); the Ship-ping Act of 1984 (46 U.S.C. app. 1701–1720); section 19 of the Merchant Ma-rine Act, 1920 (46 U.S.C. app. 876); theForeign Shipping Practices Act of 1988(46 U.S.C. app. 1710a); sections 2 and 3,Public Law 89–777, Financial Respon-sibility for Death or Injury to Pas-sengers and for Non-Performance ofVoyages (46 U.S.C. app. 817d and 817e);and other applicable statutes.

(b) Establishment and composition ofthe Commission. The Commission wasestablished as an independent agencyby Reorganization Plan No. 7 of 1961,effective August 12, 1961, and is com-posed of five Commissioners (‘‘Commis-sioners’’ or ‘‘members’’), appointed bythe President, by and with the adviceand consent of the Senate. Not more

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46 CFR Ch. IV (10–1–96 Edition)§ 501.3

than three Commissioners may be ap-pointed from the same political party.The President designates one of theCommissioners to be the Chairman ofthe Commission (‘‘Chairman’’).

(c) Terms and vacancies. The term ofeach member of the Commission is 5years and begins when the term of thepredecessor of that member ends (i.e.,on June 30 of each successive year), ex-cept that, when the term of office of amember ends, the member may con-tinue to serve until a successor is ap-pointed and qualified. A vacancy in theoffice of any Commissioner shall befilled in the same manner as the origi-nal appointment, except that any per-son chosen to fill a vacancy shall be ap-pointed only for the unexpired term ofthe Commissioner whom he or she suc-ceeds. Each Commissioner shall be re-movable by the President for ineffi-ciency, neglect of duty, or malfeasancein office.

(d) Quorum. A vacancy in the Com-mission, so long as there shall be threeCommissioners in office, shall not im-pair the power of the Commission toexecute its functions. Any three Com-missioners in office constitute aquorum for the transaction of the busi-ness of the Commission, and the af-firmative votes of any three Commis-sioners shall be sufficient for the dis-position of any matter which maycome before the Commission. For pur-poses of holding a formal meeting forthe transaction of the business of theCommission, the actual presence of twoCommissioners shall be sufficient, withproxy votes of absent members per-mitted in order to obtain the requiredthree affirmative votes. See Commis-sion Order No. 84.

(e) Meetings; records; rules and regula-tions. The Commission shall, throughits Secretary, keep a true record of allits meetings and the yea-and-nay votestaken therein on every action andorder approved or disapproved by theCommission. In addition to or in aid ofits functions, the Commission adoptsrules and regulations in regard to itspowers, duties and functions under theshipping statutes it administers.

§ 501.3 Organizational components ofthe Federal Maritime Commission.

The major organizational compo-nents of the Commission are set forthin the Organization Chart attached asAppendix A to this part. An outlinetable of the components/functions fol-lows:(a) Office of the Chairman of the Fed-

eral Maritime Commission.(Chief Executive and Administrative Of-

ficer, and FOIA and Privacy Act Ap-peals Officer.)

(1) Information Security Officer.(2) Designated Agency Ethics Offi-

cial.(b) Offices of the Members of the Fed-

eral Maritime Commission. (Includethe Chairman, ADP Committee.)

(c) Office of the Secretary. (FOIA andPrivacy Act Officer; Federal RegisterLiaison; Alternative Disputes Resolu-tion Coordinator.)

(1) Office of Informal Inquiries, Com-plaints and Informal Dockets.

(2) [Reserved](d) Office of the General Counsel. (Eth-

ics Official.)(e) Office of Administrative Law

Judges.(f) Office of Equal Employment Oppor-

tunity.(g) Office of the Inspector General.

(h) Office of the Managing Director.(Chief Operating Officer; Designated Sen-ior IRM Official; Senior Procurement Ex-ecutive and ATFI Contracting Officer;Audit Followup and Management Con-trols.)

(1) Office of Information ResourcesManagement. (Senior IRM Manager;Computer Security; Forms Control;Records Management.)

(2) [Reserved](i) Bureau of Economics and Agree-

ment Analysis.(1) Office of Agreements and Informa-

tion Management.(2) Office of Monitoring I.(3) Office of Monitoring II.

(j) Bureau of Tariffs, Certification andLicensing.

(1) Office of Tariffs.(2) Tariff Control Center.(3) Office of Service Contracts and

Passenger Vessel Operations.(4) Office of Freight Forwarders.

(k) [Reserved]


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Federal Maritime Commission § 501.5

(l) Bureau of Enforcement.(1) New York District.(2) Miami District.(3) Los Angeles District.

(m) Bureau of Administration. (Com-petition Advocate; Information Secu-rity; Principal Management Officialon Small Agency Council.)

(1) Office of Administrative Services.(Physical Security; FMC ContractingOfficer.)

(2) Office of Budget and FinancialManagement. (Chief Financial Offi-cer.)

(3) Office of Personnel.(n) Boards and Committees.

(1) Executive Resources Board.(2) Committee on Automated Data

Processing.(3) Performance Review Board.(4) Incentive Awards Committee.

[59 FR 954, Jan. 7, 1994, as amended at 59 FR62329, Dec. 5, 1994; 59 FR 67227, Dec. 29, 1994;60 FR 57940, Nov. 24, 1995; 61 FR 51231, Oct. 1,1996]

§ 501.4 Lines of responsibility.(a) Chairman. The Office of the Sec-

retary, the Office of the General Coun-sel, the Office of Administrative LawJudges, the Office of Equal Employ-ment Opportunity, the Office of the In-spector General, the Office of the Man-aging Director, and officials perform-ing the functions of Information Secu-rity Officer and Designated AgencyEthics Official, report to the Chairmanof the Commission.

(b) Office of the Managing Director.The Bureau of Economics and Agree-ment Analysis; Bureau of Tariffs, Cer-tification and Licensing; Bureau of En-forcement; and Bureau of Administra-tion report to the Office of the Manag-ing Director. The Offices of Equal Em-ployment Opportunity and of the In-spector General receive administrativeassistance from the Managing Director.All other units of the Commission re-ceive administrative guidance from theManaging Director.

(c) Bureau of Enforcement and AreaRepresentatives. The Area Representa-tives report to the Director, Bureau ofEnforcement.

[59 FR 954, Jan. 7, 1994, as amended at 59 FR67227, Dec. 29, 1994; 60 FR 57941, Nov. 24, 1995;61 FR 51231, Oct. 1, 1996]

§ 501.5 Functions of the organizationalcomponents of the Federal Mari-time Commission.

As further provided in subpart C ofthis part, the functions, including thedelegated authority of the Commis-sion’s organizational components and/or officials to exercise their functionsand to take all actions necessary to di-rect and carry out their assigned dutiesand responsibilities under the lines ofresponsibility set forth in § 501.4, arebriefly set forth as follows:

(a) Chairman. As the chief executiveand administrative officer of the Com-mission, the Chairman presides atmeetings of the Commission, admin-isters the policies of the Commissionto its responsible officials, and assuresthe efficient discharge of their respon-sibilities. The Chairman provides man-agement direction to the Offices ofEqual Employment Opportunity, In-spector General, Secretary, GeneralCounsel, Administrative Law Judges,and Managing Director with respect toall matters concerning overall Com-mission workflow, resource allocation(both staff and budgetary), work prior-ities and similar managerial matters;and establishes, as necessary, variouscommittees and boards to address over-all operations of the agency. TheChairman serves as appeals officerunder both the Freedom of InformationAct and the Privacy Act. The Chair-man appoints the heads of major ad-ministrative units after consultationwith other Commissioners. In addition,the Chairman, as ‘‘head of the agency,’’has certain responsibilities under Fed-eral laws and directives not specifi-cally related to shipping. For example,the special offices or officers withinthe Commission, listed under para-graphs (a)(1) through (a)(4) of this sec-tion, are appointed or designated bythe Chairman, are under his or her di-rect supervision and report directly tothe Chairman:

(1) Under the direction and manage-ment of the Office Director, the Officeof Equal Employment Opportunity(‘‘EEO’’) ensures that statutory andregulatory prohibitions against dis-crimination in employment and the re-quirements for related programs arefully implemented. As such, the Office


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46 CFR Ch. IV (10–1–96 Edition)§ 501.5

administers and implements com-prehensive programs on discriminationcomplaints processing, affirmative ac-tion and special emphasis. The Direc-tor, EEO, advises the Chairman regard-ing EEO’s plans, procedures, regula-tions, reports and other matters per-taining to policy and the agency pro-grams. Additionally, the Director pro-vides leadership and advice to man-agers and supervisors in carrying outtheir respective responsibilities inequal employment opportunity. TheOffice administers and implementsthese program responsibilities in ac-cordance with Equal EmploymentCommission (‘‘EEOC’’) Regulations at29 CFR part 1614 and other relevantEEOC Directives and Bulletins.

(2) Under the direction and manage-ment of the Inspector General, the Of-fice of Inspector General conducts, su-pervises and coordinates audits and in-vestigations relating to the programsand operations of the Commission; re-views existing and proposed legislationand regulations pertaining to such pro-grams and operations; provides leader-ship and coordination and recommendspolicies for activities designed to pro-mote economy, efficiency, and effec-tiveness in the administration of, andto prevent and detect waste, fraud andabuse in, such programs and oper-ations; and advises the Chairman andthe Congress fully and currently aboutproblems and deficiencies relating tothe administration of such programsand operations and the necessity forand progress of corrective action.

(3) The Information Security Officeris a senior agency official designatedunder § 503.52 of this chapter to directand administer the Commission’s infor-mation security program, which in-cludes an active oversight and securityeducation program to ensure effectiveimplementation of Executive Order12356.

(4) The Designated Agency Ethics Of-ficial and Alternate are appropriateagency employees formally designatedunder 5 CFR 2638.202 and § 500.105 of thischapter to coordinate and manage theethics program as set forth in 5 CFR2638.203, which includes the functionsof advising on matters of employee re-sponsibilities and conduct under part500 of this chapter, and serving as the

Commission’s designee(s) to the Officeof Personnel Management on such mat-ters. They provide counseling and guid-ance to employees on conflicts of inter-est and other ethical matters.

(b) Commissioners. The members ofthe Commission, including the Chair-man, implement various shipping stat-utes and related directives by render-ing decisions, issuing orders, andadopting and enforcing rules and regu-lations governing persons subject tothe shipping statutes; and performother duties and functions as may beappropriate under reorganizationplans, statutes, executive orders, andregulations.

(c) Secretary. Under the direction andmanagement of the Secretary, the Of-fice of the Secretary:

(1) Is responsible for the preparation,maintenance and disposition of the of-ficial files and records documentingthe business of the Commission. In thisregard, the Office:

(i) Prepares and, as appropriate, pub-lishes agenda of matters for action bythe Commission, prepares and main-tains the minutes with respect to suchactions; signs, serves and issues, on be-half of the Commission, documents im-plementing such actions, and coordi-nates follow-up thereon.

(ii) Receives and processes formaland informal complaints involving al-leged statutory violations, petitionsfor relief, special dockets applications(including the issuance of decisionstherein), applications to correct cleri-cal or administrative errors in servicecontracts, requests for conciliationservice, staff recommendations for in-vestigation and rulemaking proceed-ings, and motions and filings relatingthereto.

(iii) Disseminates information re-garding the proceedings, activities,functions, and responsibilities of theCommission to the maritime industry,news media, general public, and othergovernment agencies. In this capacitythe Office also:

(A) Administers the Commission’sFreedom of Information Act, PrivacyAct and Government in the SunshineAct responsibilities; the Secretaryserves as the Freedom of InformationAct and Privacy Act Officer.


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(B) Authenticates records of theCommission.

(C) Receives and responds to subpoe-nas directed to Commission personneland/or records.

(D) Compiles and publishes the boundvolumes of Commission decisions.

(E) Coordinates publication of docu-ments, including rules and modifica-tions thereto with the Office of theFederal Register; the Secretary servesas the Federal Register Liaison Officerand Certifying Officer.

(2) Through the Secretary and, in theabsence or preoccupation of the Sec-retary, through the Assistant Sec-retary, administers oaths pursuant to 5U.S.C. 2903(b).

(3) Coordinates Alternative DisputeResolution activities within the Com-mission.

(4) Through the Office of Informal In-quiries, Complaints and InformalDockets:

(i) Advises the Commission on sig-nificant public interest issues in cur-rent and proposed policies, programs,and decisions;

(ii) Receives, coordinates, and re-sponds to informal inquiries, com-plaints, suggestions, and expressions ofconcern from the public and contactscarriers, conferences, and other personsto effect solutions;

(iii) Publicizes Commission policies,programs, and activities of interest tothe Commission’s shipping public; and

(iv) Adjudicates small claims ($10,000or less) arising from alleged violationsof the shipping statutes.

(d) General Counsel. Under the direc-tion and management of the GeneralCounsel, the Office of the GeneralCounsel:

(1) Reviews for legal sufficiency allstaff memoranda and recommendationsthat are presented for Commission ac-tion and staff actions acted upon pur-suant to delegated authority under§§ 501.26(i) and 501.26(k).

(2) Provides written or oral legalopinions to the Commission, to thestaff, and to the general public in ap-propriate cases.

(3) Prepares and/or reviews for legalsufficiency, before service, all finalCommission decisions, orders, and reg-ulations.

(4) Monitors, reviews and, as re-quested by the Committees of the Con-gress, the Office of Management andBudget, or the Chairman, preparescomments on all legislation introducedin the Congress affecting the Commis-sion’s programs or activities, and pre-pares draft legislation or amendmentsto legislation; coordinates such mat-ters with the appropriate Bureau, Of-fice or official and advises appropriateCommission officials of legislationwhich may impact the programs andactivities of the Commission. Also pre-pares testimony for Congressionalhearings and responses to requestsfrom Congressional offices.

(5) Serves as the legal representativeof the Commission in courts and in ad-ministrative proceedings before otherGovernment agencies.

(6) Monitors and reports on inter-national maritime developments, in-cluding laws and practices of foreigngovernments which affect ocean ship-ping; and identifies potential state-controlled carriers within the meaningof section 3(8) of the Shipping Act of1984, researches their status, andmakes recommendations to the Com-mission concerning their classification.

(7) Represents the Commission inU.S. Government interagency groupsdealing with international maritime is-sues; serves as a technical advisor onregulatory matters in bilateral andmultilateral maritime discussions; andcoordinates Commission activitiesthrough liaison with other Governmentagencies and programs and inter-national organizations.

(8) Screens, routes, and maintainscustody of U.S. Government and inter-national organization documents, sub-ject to the classification and safekeep-ing controls administered by the Com-mission’s Information Security Officer.

(9) Reviews for legal sufficiency alladverse personnel actions, procurementactivities, Freedom of Information Actand Privacy Act matters and other ad-ministrative actions.

(10) Manages the Commission’s li-brary and related services.

(e) Administrative Law Judges. Underthe direction and management of theChief Administrative Law Judge, theOffice of Administrative Law Judgesholds hearings and renders initial or


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46 CFR Ch. IV (10–1–96 Edition)§ 501.5

recommended decisions in formal rule-making and adjudicatory proceedingsas provided in the Shipping Act, 1916,Shipping Act of 1984, and other applica-ble laws and other matters assigned bythe Commission, in accordance withthe Administrative Procedure Act andthe Commission’s Rules of Practice andProcedure.

(f) The Office of the Managing Director.(1) The Managing Director:

(i) As senior staff official, is respon-sible to the Chairman for the manage-ment and coordination of Commissionprograms managed by the operatingBureaus of Enforcement; Administra-tion; Economics and Agreement Analy-sis; and Tariffs, Certification and Li-censing, as more fully described inparagraphs (g) through (k) of this sec-tion, and thereby implements the regu-latory policies of the Commission andthe administrative policies and direc-tives of the Chairman;

(ii) Provides administrative guidanceto all units of the Commission otherthan the operating bureaus listed inparagraph (f)(1) of this section, exceptthe Offices of Equal Employment Op-portunity and the Inspector General,which are provided administrative as-sistance;

(iii) Is the agency’s Senior Procure-ment Executive under 41 U.S.C. 414(3)and Commission Order No. 112;

(iv) As the Designated Senior Infor-mation Resources Management Officialunder 44 U.S.C. 501–520 and 3501–3520and Commission Order No. 117, reviewsrecommendations of the Commission’sCommittee on Automated Data Proc-essing and submits them to the Chair-man under Commission Orders Nos. 98and 117;

(v) Is the Audit Follow-up and Man-agement (Internal) Controls Official forthe Commission under Commission Or-ders Nos. 103 and 106; and

(vi) Is the agency’s Chief OperatingOfficer, as appointed by the Chairmanin response to the President’s October1, 1993, memorandum on managementreform.

(2) The Office of Managing Directorensures the periodic review and updat-ing of Commission orders.

(3) A Deputy Managing Director, re-porting directly to the Managing Di-rector, supervises the development of,

and serves as Contracting Officer for,the Commission’s Automated TariffFiling and Information (‘‘ATFI’’) Sys-tem.

(4) Is responsible for the administra-tion and coordination of the Office ofInformation Resources Management.The Office of Information ResourcesManagement, under the direction andmanagement of the Office Director,provides administrative support withrespect to information resources man-agement to the program operations ofthe Commission. The Office interpretsgovernmental policies and programsfor information management and ad-ministers these in a manner consistentwith Federal guidelines. The Office ini-tiates recommendations, collaboratingwith other elements of the Commissionas warranted, for long-range plans, newor revised policies and standards, andrules and regulations, with respect toits program activities. The Office’smajor functions include: administra-tion of the information resources man-agement program under the PaperworkReduction Act; management studiesand surveys; data telecommunications/database management and applicationdevelopment; records management;IRM contract administration; develop-ment of Paperwork Reduction Actclearances for submission to the Officeof Management and Budget; computersecurity; and forms management. TheDirector of the Office serves as SeniorIRM Manager, Forms Control Officer,Computer Security Officer, RecordsManagement Officer, and ADP Coordi-nator for the Committee on AutomatedData Processing.

(g) Under the direction and manage-ment of the Bureau Director, the Bu-reau of Economics and Agreement Analy-sis develops and administers programsin connection with the anticompetitiveand cooperative arrangements andpractices of common carriers by water,freight forwarders and terminal opera-tors in the foreign and domestic com-merce of the U.S., including the filingof common carrier agreements undersection 15 of the Shipping Act, 1916,ocean common carrier agreementsunder section 5 of the Shipping Act of1984, the financial reporting by ocean


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common carriers in the domestic off-shore trades, and the filing of agree-ments by marine terminal operatorsunder section 15 of the Shipping Act,1916, and section 5 of the Shipping Actof 1984. The Bureau provides experteconomic testimony and support in for-mal proceedings, particularly regard-ing unfair foreign shipping practicesunder section 19 of the Merchant Ma-rine Act, 1920, the Foreign ShippingPractices Act of 1988, and domestic off-shore rate-of-return cases under theIntercoastal Shipping Act, 1933.

(h) Bureau of Tariffs, Certification andLicensing. Under the direction andmanagement of the Bureau Director,the Bureau of Tariffs, Certification andLicensing plans, develops and admin-isters programs in connection with tar-iffs filed by common carriers and ma-rine terminal operators; ocean commoncarrier service contracts; financial re-sponsibility of non-vessel operatingcommon carriers; licensing oceanfreight forwarders; certifying the fi-nancial responsibility of passenger ves-sel owners and operators. These pro-grams carry out the provisions of theShipping Act, 1916, the IntercoastalShipping Act, 1933; the Shipping Act of1984; and Pub. L. 89-777, as implementedunder Parts 510, 514, 540, 552, 582, and583 of this chapter. The Bureau main-tains tariff data filed in electronicform on the Commission’s AutomatedTariff Filing and Information System(‘‘ATFI’’). The Bureau develops long-range plans, new or revised policies andstandards, and rules and regulationswith respect to these programs. It alsocooperates with other Commissioncomponents with regard to the enforce-ment of the Commission’s regulatoryrequirements, and provides expert tes-timony and support in formal proceed-ings. The Bureau’s program activitiesare carried out by the Office of Tariffs,the Office of Service Contracts andPassenger Vessel Operations and theOffice of Freight Forwarders.

(i) Bureau of Enforcement; Area Rep-resentatives. Under the direction andmanagement of the Bureau Director,the Bureau of Enforcement:

(1) Participates as trial counsel informal Commission proceedings whendesignated by Commission order, orwhen intervention is granted;

(2) Initiates, processes and negotiatesthe informal compromise of civil pen-alties under § 501.28 of this part and§ 502.604 of this chapter, and representsthe Commission in proceedings and cir-cumstances as designated;

(3) Acts as staff counsel to the Man-aging Director and other bureaus andoffices;

(4) Coordinates with other bureausand offices to provide legal advice, at-torney liaison, and prosecution, as war-ranted, in connection with enforcementmatters; and

(5) Conducts investigations leading toenforcement action, advises the Fed-eral Maritime Commission of evolvingcompetitive practices in internationaland domestic offshore commerce, as-sesses the practical repercussions ofCommission regulations, educates theindustry regarding policy and statu-tory requirements, assists in the reso-lution of disputes within the industry,and provides liaison, cooperation, andother coordination between the Com-mission and the maritime industry,shippers, and other government agen-cies.

(6) Maintains a presence in locationsother than Washington, D.C. throughArea Representatives whose activitiesinclude the following:

(i) Representing the Commissionwithin their respective geographicareas;

(ii) Providing liaison between theCommission and the shipping industryand interested public; conveying perti-nent information regarding regulatoryactivities and problems; and rec-ommending courses of action and solu-tions to problems as they relate to theshipping public, the affected industry,and the Commission;

(iii) Furnishing to interested personsinformation, advice, and access toCommission public documents;

(iv) Receiving and resolving informalcomplaints, in coordination with theDirector, Office of Informal Inquiries,Complaints and Informal Dockets;

(v) Investigating potential violationsof the shipping statutes and the Com-mission’s regulations;

(vi) Conducting shipping industrysurveillance programs to ensure com-pliance with the shipping statutes and


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46 CFR Ch. IV (10–1–96 Edition)§ 501.5

Commission regulations. Such pro-grams include common carrier audits,service contract audits and compliancechecks of ocean freight forwarders;

(vii) Upon request of the Bureau ofTariffs, Certification and Licensing,auditing passenger vessel operators todetermine the adequacy of performancebonds and the availability of funds topay liability claims for death or injury,and assisting in the background sur-veys of ocean freight forwarder appli-cants;

(viii) Conducting special surveys andstudies, and recommending policies tostrengthen enforcement of the shippinglaws;

(ix) Maintaining liaison with Federaland State agencies with respect toareas of mutual concern; and

(x) Providing assistance to the var-ious bureaus and offices of the Commis-sion as appropriate and when re-quested.

(j) [Reserved](k) Under the direction and manage-

ment of the Bureau Director, the Bu-reau of Administration is responsiblefor the administration and coordina-tion of the Offices of: AdministrativeServices; Budget and Financial Man-agement; and Personnel. The Bureauprovides administrative support to theprogram operations of the Commission.The Bureau interprets governmentalpolicies and programs and administersthese is a manner consistent with Fed-eral guidelines, including those involv-ing procurement, financial manage-ment and personnel. The Bureau initi-ates recommendations, collaboratingwith other elements of the Commissionas warranted, for long-range plans, newor revised policies and standards, andrules and regulations, with respect toits program activities. The Office ofthe Bureau Director is responsible fordirecting and administering the Com-mission’s training and developmentfunction. The Bureau Director is theCommission’s Competition Advocateunder 41 U.S.C. 418(a) and CommissionOrder No. 112, as well as the Commis-sion’s representative, as PrincipalManagement Official, to the SmallAgency Council. Other Bureau pro-grams are carried out by its Offices, asfollows:

(1) The Office of Administrative Serv-ices, under the direction and manage-ment of the Office Director, directs andadministers a wide variety of manage-ment support service functions of theCommission. The Director of the Officeis the Commission’s principal Con-tracting Officer under Commissionorder No. 112. Programs include com-munications; audio and voice tele-communications; procurement of andcontracting for administrative goodsand services, including the utilizationof small and disadvantaged businesses;management of property, space, print-ing and copying; mail and records serv-ices; Forms and graphic designs; facili-ties; and equipment maintenance; andtransportation.

(2) The Office of Budget and Finan-cial Management, under the directionand management of the Office Direc-tor, administers the Commission’s fi-nancial management program, includ-ing fiscal accounting activities, fee andforfeiture collections, and payments,and ensures that Commission obliga-tions and expenditures of appropriatedfunds are proper; develops annual budg-et justifications for submission to theCongress and the Office of Managementand Budget; develops and administersinternal controls systems that provideaccountability for agency funds; ad-ministers the Commission’s travel andcash management programs, as well asthe Commission’s Imprest Funds; en-sures accountability for official pass-ports; and assists in the development ofproper levels of user fees. The Directorof the Office is the Commission’s ChiefFinancial Officer.

(3) The Office of Personnel, under thedirection and management of the Of-fice Director, plans and administers acomplete personnel management pro-gram including: Recruitment andplacement; position classification andpay administration; occupational safe-ty and health; employee counselingservices; employee relations; workforcediscipline; performance appraisal; in-centive awards; retirement; and per-sonnel security. The Director of the Of-fice is the Chairman of the IncentiveAwards Committee.

(l) Boards and Committees. The follow-ing boards and committees are estab-lished by separate Commission orders


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(‘‘C.O.’’) to address matters relating tothe overall operations of the Commis-sion:

(1) The Executive Resources Board iscomprised of three voting members,chosen from the ranks of those abovethe grade 15 level, with the majoritybeing career members of the Senior Ex-ecutive Service. The members servestaggered terms of three years, begin-ning October 1 of each year; the mem-ber serving in the last year of his/herterm serves as Chairman. The boardmeets on an ad hoc basis to discuss, de-velop and submit recommendations tothe Chairman on matters related to themerit staffing process for career ap-pointments in the Senior ExecutiveService, including the executive quali-fications of candidates for career ap-pointment. The board also plans andmanages the Commission’s executivedevelopment programs. Serving theboard in a non-voting advisory capac-ity are the Director, Office of EqualEmployment Opportunity, the Train-ing Officer, and the Director, Office ofPersonnel, who also serves as theboard’s secretary. C.O. No. 95.

(2) The Committee on AutomatedData Processing is chaired by a Com-missioner designated by the Chairman,and is comprised of the Directors of theBureaus of Economics and AgreementAnalysis; Tariffs, Certification and Li-censing; Administration; and Enforce-ment; the General Counsel; the Sec-retary; the Inspector General; the Di-rector, Office of Equal EmploymentOpportunity; the Chief AdministrativeLaw Judge; a representative of theChairman’s office; the Deputy Manag-ing Director in charge of the Commis-sion’s Automated Tariff Filing and In-formation System; and the Director,Office of Information Resources Man-agement, who serves as Committee Co-ordinator for the Committee Chair-person. The Committee meets on an adhoc basis to review, evaluate, and rec-ommend to the Chairman, through theManaging Director, policies and ac-tions on the acquisition, management,and use of ADP equipment and serv-ices. C.O. No. 98.

(3) The Performance Review Board ischaired by a Commissioner designatedby the Chairman, and is composed of astanding register of members which is

published in the FEDERAL REGISTER.Once a year, the PRB Chairman ap-points performance review panels fromthe membership to review individualperformance appraisals and other rel-evant information pertaining to SeniorExecutives at the Commission, and torecommend final performance ratingsto the Chairman. C.O. No. 115.

(4) The Incentive Awards Committeeis composed of two permanent votingmembers: The Director of Personnel,who serves as Chairman; and the Direc-tor of Equal Employment Opportunity;and two other voting members ap-proved by the Chairman upon the rec-ommendation of the Managing Direc-tor. The committee meets on an ad hocbasis to determine if incentive awardnominations meet established criteria,and to review suggestions. C.O. No. 62.

[59 FR 954, Jan. 7, 1994, as amended at 59 FR54396, Oct. 31, 1994; 59 FR 62329, Dec. 5, 1994;59 FR 67227, Dec. 29, 1994; 60 FR 5322, Jan. 27,1995; 60 FR 30791, June 12, 1995; 60 FR 57941,Nov. 24, 1995; 61 FR 51231, Oct. 1, 1996]

Subpart B—Official Seal§ 501.11 Official seal.

(a) Description. Pursuant to section201 (c) of the Merchant Marine Act,1936, as amended (46 U.S.C. app.1111(c)), the Commission prescribes itsofficial seal, as adopted by the Com-mission on August 14, 1961, which shallbe judicially noticed. The design of theofficial seal is described as follows:

(1) A shield argent paly of six gules,a chief azure charged with a fouled an-chor or; shield and anchor outlined ofthe third; on a wreath argent andgules, an eagle displayed proper; all ona gold disc within a blue border, encir-cled by a gold rope outlined in blue,and bearing in white letters the in-scription ‘‘Federal Maritime Commis-sion’’ in upper portion and ‘‘1961’’ inlower portion.

(2) The shield and eagle above it areassociated with the United States ofAmerica and denote the national scopeof maritime affairs. The outer rope andfouled anchor are symbolic of seamenand waterborne transportation. Thedate ‘‘1961’’ has historical significance,indicating the year in which the Com-mission was created.

(b) Design.


14

46 CFR Ch. IV (10–1–96 Edition)§ 501.21

Subpart C—Delegation andRedelegation of Authorities

§ 501.21 Delegation of authorities.(a) Authority and delegation. Section

105 of Reorganization Plan No. 7 of 1961,August 12, 1961, authorizes the Commis-sion to delegate, by published order orrule, any of its functions to a divisionof the Commission, an individual Com-missioner, an administrative law judge,or an employee or employee board, in-cluding functions with respect to hear-ing, determining, ordering, certifying,reporting or otherwise acting as to anywork, business or matter. In subpart Aof this part, the Commission has dele-gated general functions, and in thissubpart C, it is delegating miscellane-ous, specific authorities set forth in§§ 501.23, et seq., to the delegatees des-ignated therein, subject to the limita-tions prescribed in subsequent sub-sections of this section.

(b) Deputies. Where bureau or officedeputies are officially appointed, theyare hereby delegated all necessary au-thority to act in the absence or inca-pacity of the director or chief.

(c) Redelegation. Subject to the limi-tations in this section, the delegateesmay redelegate their authorities tosubordinate personnel under their su-pervision and direction; but only if thissubpart is amended to reflect such re-delegation and notice thereof is pub-

lished in the FEDERAL REGISTER. Underany redelegated authority, theredelegator assumes full responsibilityfor actions taken by subordinateredelegatees.

(d) Exercise of authority; policy andprocedure. The delegatees andredelegatees shall exercise the authori-ties delegated or redelegated in a man-ner consistent with applicable laws andthe established policies of the Commis-sion, and shall consult with the Gen-eral Counsel where appropriate.

(e) Exercise of delegated authority bydelegator. Under any authority dele-gated or redelegated, the delegator(Commission), or the redelegator, re-spectively, shall retain full rights toexercise the authority in the first in-stance.

(f) Review of delegatee’s action. Thedelegator (Commission) or redelegatorof authority shall retain a discre-tionary right to review an action takenunder delegated authority by a subor-dinate delegatee, either upon the filingof a written petition of a party to, oran intervenor in, such action; or uponthe delegator’s or redelegator’s owninitiative.

(1) Petitions for review of actionstaken under delegated authority shallbe filed within ten (10) calendar days ofthe action taken:


15


(i) If the action for which review issought is taken by a delegatee, the pe-tition shall be addressed to the Com-mission pursuant to § 502.69 of thischapter.

(ii) If the action for which review issought is taken by a redelegatee, thepetition shall be addressed to theredelegator whose decision can be fur-ther reviewed by the Commission underparagraph (f)(1)(i) of this section, un-less the Commission decides to reviewthe matter directly, such as, for exam-ple, in the incapacity of theredelegator.

(2) The vote of a majority of theCommission less one member thereofshall be sufficient to bring any dele-gated action before the Commission forreview under this paragraph.

(g) Action—when final. Should theright to exercise discretionary reviewbe declined or should no such review besought under paragraph (f) of this sec-tion, then the action taken under dele-gated authority shall, for all purposes,including appeal or review thereof, bedeemed to be the action of the Com-mission.

(h) Conflicts. Where the proceduresset forth in this section conflict withlaw or any regulation of this chapter,the conflict shall be resolved in favorof the law or other regulation.

§ 501.22 [Reserved]

§ 501.23 Delegation to the GeneralCounsel.

The authority listed in this section isdelegated to the General Counsel: Au-thority to classify carriers as state-controlled carriers within the meaningof section 3(8) of the Shipping Act of1984, except where a carrier submits arebuttal statement pursuant to§ 514.4(c)(2)(ii) of this chapter.

[60 FR 27229, May 23, 1995]

§ 501.24 Delegation to the Secretary.

The authorities listed in this sectionare delegated to the Secretary (and, inthe absence or preoccupation of theSecretary, to the Assistant Secretary).

(a) Authority to approve applicationsfor permission to practice before theCommission and to issue admissioncertificates to approved applicants.

(b) Authority to extend the time tofile exceptions or replies to exceptions,and the time for Commission review,relative to initial decisions of adminis-trative law judges and decisions of Spe-cial Dockets Officers.

(c) Authority to extend the time tofile appeals or replies to appeals, andthe time for Commission review, rel-ative to dismissals of proceedings, inwhole or in part, issued by administra-tive law judges.

(d) Authority to establish and extendor reduce the time:

(1) To file documents either in dock-eted proceedings or relative to peti-tions filed under part 502 of this chap-ter, which are pending before the Com-mission itself; and

(2) To issue initial and final decisionsunder § 502.61 of this chapter.

(e) Authority to prescribe a timelimit less than twenty days from datepublished in the FEDERAL REGISTER, forthe submission of written commentswith reference to agreements filed pur-suant to section 15 of the Shipping Act,1916, and to prescribe a time limit forthe submission of written commentswith reference to agreements filed pur-suant to section 5 of the Shipping Actof 1984.

(f) Authority, in appropriate cases, topublish in the FEDERAL REGISTER no-tices of intent to prepare an environ-mental assessment and notices of find-ing of no significant impact.

(g) Authority to prescribe a timelimit less than ten days from date pub-lished in the FEDERAL REGISTER for fil-ing comments on notices of intent toprepare an environmental assessmentand notice of finding of no significantimpact and authority to prepare envi-ronmental assessments of No Signifi-cant Impact.

(h) Authority, after consultationwith the Director, Bureau of Economicand Agreement Analysis, to rule on re-quests to file amendments or supple-ments to documents concerning pend-ing section 15 agreements, which arefiled pursuant to § 560.602(e) of thischapter.

(i) Authority, in the absence or pre-occupation of the Managing Directorand Deputy Managing Directors, tosign travel orders, nondocketed rec-ommendations to the Commission, and


16

46 CFR Ch. IV (10–1–96 Edition)§ 501.25

other routine documents for the Man-aging Director, consistent with theprograms, policies, and precedents es-tablished by the Commission or theManaging Director.

[59 FR 954, Jan. 7, 1994, as amended at 59 FR67227, Dec. 29, 1994]

§ 501.25 Delegation to and redelega-tion by the Managing Director.

Except where specifically redelegatedin this section, the authorities listed inthis section are delegated to the Man-aging Director.

(a) Authority to adjudicate, with theconcurrence of the General Counsel,and authorize payment of, employeeclaims for not more than $1,000.00, aris-ing under the Military and CivilianPersonnel Property Act of 1964, 31U.S.C. 3721.

(b) Authority to determine that anexigency of the public business is ofsuch importance that annual leavemay not be used by employees to avoidforfeiture before annual leave may berestored under 5 U.S.C. 6304.

(c)(1) Authority under part 514 of thischapter, after consultation with theBureau of Tariffs, Certification and Li-censing, to issue letters notifying ap-plicants for certification of ATFI batchfiling capability that their applicationshave or have not been granted.

(2) The authority under this para-graph is redelegated to the Director,Office of Information Resources Man-agement.

(d)(1) Authority under § 514.21(m)(2) ofthis chapter, after consultation withthe Bureau of Tariffs, Certification andLicensing, to evaluate and approve ordisapprove by letter the accounting orcharging system the applicant intendsto use for charging users and remittingto the Commission indirect (subse-quent) access user fees under 46 U.S.C.app. 1107a(d)(1)(B)(ii), and by letter todeny access to ATFI data tapes for fail-ure to operate under an approved ac-counting or charging system or for fail-ure to remit user fees to the Commis-sion.

(2) The authority under this para-graph is redelegated to the Director,Office of Information Resources Man-agement.

[59 FR 954, Jan. 7, 1994, as amended at 59 FR62330, Dec. 5, 1994]

§ 501.26 Delegation to the Director, Bu-reau of Economics and AgreementAnalysis.

The authorities listed in this sectionare delegated to the Director, Bureauof Economics and Agreement Analysis.

(a) Authority to approve, pursuant tosection 15 of the Shipping Act, 1916,unprotested passenger agency agree-ments and modifications thereto, andcontainer interchange agreements andmodifications thereto between commoncarriers by water.

(b) Authority to approve modifica-tions to agreements filed under section15 of the Shipping Act, 1916, when suchmodifications are filed in accordancewith regulations and are clearly incompliance with the criteria and/or in-tent of such regulations, and requiremodification of the filed amendment tothe extent necessary to conform tosuch regulations.

(c) Authority to approve those class-es of unprotested section 15 agree-ments, and modifications thereto,which, pursuant to section 35 of theShipping Act, 1916, are specifically ex-empted from the approval require-ments of that Act, but which, notwith-standing the exemption, have beenfiled for approval.

(d) Authority to approve, pursuant tosection 15 of the Shipping Act, 1916, asamended, unprotested modifications tomarine terminal conference agree-ments and unprotested marine termi-nal leases, licenses, assignments, orother agreements of a similar char-acter for the use of terminal propertyor facilities between persons subject tothe Shipping Act, 1916, as amended. Ininstances where an agreement for theuse of terminal property or facilities ofthat character defined herein grantsrenewal options without providing thatthe Commission be notified in theevent that such options are exercised,this authority extends to the issuanceof conditional approval, the conditionof approval being that the agreementbe modified to provide for notificationto the Commission in the event thatsuch options are exercised and refiledwith the Commission.

(e) Authority to determine that noaction should be taken to prevent anagreement or modification to an agree-ment from becoming effective under


17


section 6(c)(1), and to shorten the re-view period under section 6(e), of theShipping Act of 1984, when the agree-ment or modification involves solely arestatement, clarification or change inan agreement which adds no new sub-stantive authority beyond that alreadycontained in an effective agreement.This category of agreement or modi-fication includes, for example, the fol-lowing: a restatement filed to conforman agreement to the format and orga-nization requirements of part 572 ofthis chapter; a clarification to reflect achange in the name of a country orport or a change in the name of a partyto the agreement; a correction of typo-graphical or grammatical errors in thetext of an agreement; a change in thetitle of persons or committees des-ignated in an agreement; or a transferof functions from one person or com-mittee to another.

(f) Authority to grant or deny appli-cations filed under § 572.406 of thischapter for waiver of the form, organi-zation and content requirements of§§ 572.401, 572.402, 572.403, 572.404 and572.405 of this chapter.

(g) Authority to grant or deny appli-cations filed under § 572.505 of thischapter for waiver of the informationform requirements of §§ 572.503 and572.504 of this chapter.

(h) Authority to grant or deny appli-cations filed under § 572.709 of thischapter for waiver of the reporting andrecord retention requirements of§§ 572.701, 572.702, 572.703, 572.704, 572.705,572.706, 572.707 and 572.708 of this chap-ter.

(i) Authority to determine that noaction should be taken to prevent anagreement or modification of an agree-ment from becoming effective undersection 6(c)(1) of the Shipping Act of1984 for all unopposed agreements andmodifications to agreements which willnot result in a significant reduction incompetition. Agreements which aredeemed to have the potential to resultin a significant reduction in competi-tion and which, therefore, are not cov-ered by this delegation include but arenot limited to:

(1) New agreements authorizing theparties to collectively discuss or fixrates (including terminal rates).

(2) New agreements authorizing theparties to pool cargoes or revenues.

(3) New agreements authorizing theparties to establish a joint service orconsortium.

(4) New sailing agreements.(5) New equal access agreements.(j) Authority to grant or deny short-

ened review pursuant to § 572.605 of thischapter for agreements for which au-thority is delegated in paragraph (i) ofthis section.

(k) Subject to review by the GeneralCounsel, authority to deny, but not ap-prove, requests filed pursuant to§ 572.605 of this chapter for a shortenedreview period for agreements for whichauthority is not delegated under para-graph (i) of this section.

(l) Authority to issue notices of ter-mination of agreements which are oth-erwise effective under the ShippingAct, 1916, or the Shipping Act of 1984,after publication of notice of intent toterminate in the FEDERAL REGISTER,when such terminations are:

(1) Requested by the parties to theagreement;

(2) Deemed to have occurred when itis determined that the parties are nolonger engaged in activity under theagreement and official inquiries andcorrespondence cannot be delivered tothe parties; or

(3) Deemed to have occurred by noti-fication of the withdrawal of the nextto last party to an agreement withoutnotification of the addition of anotherparty prior to the effective date of thenext to last party’s withdrawal.

(m) Authority to determine whetheragreements for the use or operation ofterminal property or facilities, or thefurnishing of terminal services, arewithin the purview of section 15 of theShipping Act, 1916, or section 5 of theShipping Act of 1984.

(n) Authority to request controlledcarriers to file justifications for exist-ing or proposed rates, charges classi-fications, rules or regulations, and re-view responses to such requests for thepurpose of recommending to the Com-mission that a rate, charge, classifica-tion, rule or regulation be found unlaw-ful and, therefore, requires Commissionaction under section 9(d) of the Ship-ping Act of 1984.


18

46 CFR Ch. IV (10–1–96 Edition)§ 501.27

(o) Authority to recommend to theCommission the initiation of formalproceedings or other actions with re-spect to suspected violations of theshipping statutes and rules and regula-tions of the Commission.

(p) Authority to approve or dis-approve applications as specified inPart 552 of this chapter for extensionsof time for filing (§ 552.2(c)), alternativedata (§ 552.2(d)) and waiver of detailedfiling requirements (§ 552.2(e)).

[59 FR 954, Jan. 7, 1994, as amended at 59 FR54396, Oct. 31, 1994; 59 FR 67228, Dec. 29, 1994;61 FR 9944, Mar. 12, 1996; 61 FR 14032, Mar. 29,1996]

§ 501.27 Delegation to and redelega-tion by the Director, Bureau of Tar-iffs, Certification and Licensing.

Except where specifically redelegatedin this section, the authorities listed inthis section are delegated to the Direc-tor, Bureau of Tariffs, Certificationand Licensing.

(a)(1) Authority to approve for goodcause or disapprove special permissionapplications submitted by commoncarriers, or conferences of such car-riers, subject to the provisions of sec-tion 8 of the Shipping Act, 1984, section18 of the Shipping Act, 1916, or section2 of the Intercoastal Shipping Act of1933, for relief from statutory and/orCommission tariff requirements.

(2) The authority under this para-graph is redelegated to the Chief, Of-fice of Tariffs, in the Bureau of Tariffs,Certification and Licensing.

(b)(1) Authority to approve or dis-approve special permission applica-tions submitted by a controlled carriersubject to the provisions of section 9 ofthe Shipping Act of 1984 for relief fromstatutory and/or Commission tariff re-quirements.


(c)(1) Authority contained in Supple-mental Report No. 4 and Order inDocket No. 90–23, Notice of Inquiry onOcean Freight Tariffs in Foreign andDomestic Offshore Commerce—Tariffsand Service Contracts, to grant specialpermission to deviate from the require-ment that electronically-filed tariffsbecome effective no later than 90 days

from the last day of the applicable fil-ing window.


(d) Authority contained in Part 514 ofthis chapter to temporarily exemptcommon carriers from the electronictariff filing requirements of that partfor a period not to exceed 90 days fromthe filing dates set forth in Supple-mental Report No. 4 and Order, servedin Docket No. 90–23 on May 28, 1993.

(e)(1) Authority to reject tariff fil-ings of common carriers in the foreignand domestic offshore commerce of theU.S. or conferences of such carriers forfailure to meet the requirements ofpertinent statutes or the Commission’sregulations, for lack of completenessor clarity, or for noncompliance withspecial permission or other orders ofthe Commission.

(2) The authority under this para-graph is redelegated to the Chief, Of-fice of Tariffs; Chief, Tariff ControlCenter and Senior Transportation Spe-cialists in the Bureau of Tariffs, Cer-tification and Licensing.

(f) Authority to issue notices of in-tent to cancel inactive tariffs of com-mon carriers in the foreign and domes-tic offshore commerce and marine ter-minal operators, after a diligent efforthas been made to locate the carrier/ter-minal operator without success, or ifthe carrier/terminal operator has ad-vised the Commission that it no longeroffers a carrier/terminal operator serv-ice but refuses to cancel its tariff uponwritten request; and to cancel such tar-iff if, within 30 days after publication,the carrier/terminal operator does notfurnish reasons why such tariff shouldnot be canceled.

(g)(1) Authority to:(i) Approve or disapprove applica-

tions for ocean freight forwarder li-censes; issue or reissue or transfer suchlicenses; and approve extensions oftime in which to furnish the name(s)and ocean freight forwarding experi-ence of the managing partner(s) or offi-cer(s) who will replace the qualifiedpartner or officer upon whose qualifica-tions the original licensing was ap-proved;


19


(ii) Issue a letter stating that theCommission intends to deny an appli-cation, unless within 20 days, applicantrequests a hearing to show that denialof the application is unwarranted; denyapplications where an applicant has re-ceived such a letter and has not re-quested a hearing within the notice pe-riod; and rescind, or grant extensionsof, the time specified in such letters;

(iii) Revoke the license of an oceanfreight forwarder upon the request ofthe licensee;

(iv) Upon receipt of notice of can-cellation of any bond, notify the li-censee in writing that its license willautomatically be suspended or re-voked, effective on the bond cancella-tion date, unless a new or reinstatedbond is submitted and approved priorto such date, and subsequently ordersuch suspension or revocation for fail-ure to maintain a bond;

(v) Approve changes in an existing li-censee’s organization; and

(vi) Return any application which onits face fails to meet the requirementsof the Commission’s regulations, ac-companied by an explanation of thereasons for rejection.

(2) The authorities contained in para-graphs (g)(1)(iii) and (g)(1)(iv) of thissection are redelegated to the Chief,Office of Freight Forwarders, in theBureau of Tariffs, Certification and Li-censing.

(h) Authority to:(1) Approve applications for Certifi-

cates (Performance) and Certificates(Casualty) evidenced by a surety, in-surance or guaranty issued by an ap-proved entity, and issue, reissue, oramend such Certificates;

(2) Issue a written notice to an appli-cant stating intent to deny an applica-tion for a Certificate (Performance)and/or (Casualty), indicating the rea-son therefor, and advising applicant ofthe time for requesting a hearing asprovided for under § 540.26(c) of thischapter; deny any application wherethe applicant has not submitted atimely request for a hearing; and re-scind such notices and grant extensionsof the time within which a request forhearing may be filed;

(3) Issue a written notice to acertificant stating that the Commis-sion intends to revoke, suspend, or

modify a Certificate (Performance)and/or (Casualty), indicating the rea-son therefor, and advising of the timefor requesting a hearing as provided forunder § 540.26(c) of this chapter; revoke,suspend or modify a Certificate (Per-formance) and/or (Casualty) where thecertificant has not submitted a timelyrequest for hearing; and rescind suchnotices and grant extensions of timewithin which a request for hearing maybe filed;

(4) Revoke a Certificate (Perform-ance) and/or (Casualty) which has ex-pired, and/or upon request of, or acqui-escence by, the certificant; and

(5) Notify a certificant when a Cer-tificate (Performance) and/or (Cas-ualty) has become null and void in ac-cordance with §§ 540.8(a) and 540.26(a) ofthis chapter.

(i) Authority contained in § 514.7(j) ofthis chapter to notify filing parties ofthe Commission’s intent to reject aservice contract and/or statement ofessential terms and subsequently rejectand return such contracts.

(j) Authority contained in part 514 ofthis chapter to approve, but not deny,requests for permission to correct cler-ical or administrative errors in the es-sential terms of filed service contracts.

(k) Authority contained in parts 514and 583 of this chapter to cancel thetariffs of NVOCCs who fail to file a sur-ety bond, guaranty or insurance policyor, if required, designate an agent forreceipt of process, or whose suretybond or agent designation is canceled.

(l) Authority contained in Parts 514and 582 of this chapter to cancel thetariff or tariffs of any common carrier,and suspend the license of any oceanfreight forwarder, who fails to file ananti-rebate certification.

(m) Authority to approve or dis-approve applications as specified inPart 552 of this chapter for extensionsof time for filing (§ 552.2(c)), alternativedata (§ 552.2(d)) and waiver of detailedfiling requirements (§ 552.2(e)).

(n) Authority contained in§ 514.8(d)(4)(ii) of this chapter to ap-prove minor changes and additions totransaction set data for the ATFI sys-tem. Such minor changes include addi-tions to any of the following term andreference lists: Cities; States and Prov-inces; Countries; Ports; Container


20

46 CFR Ch. IV (10–1–96 Edition)§ 501.28

sizes; Container types; Container tem-peratures; Hazard codes; Inland modes,Packaging types, Rate bases; Servicetypes; Stuffing mode; Stripping mode;and Currencies.

(o) [Reserved](p) Authority to review and deter-

mine the validity of alleged or sus-pected violations, exclusive of formalcomplaints, of the shipping statutesand rules and regulations of the Com-mission by freight forwarders; author-ity to determine corrective action nec-essary with respect to violations ex-cept where violations involve majorquestions of policy or major interpreta-tions of statutes, or orders, rules, andregulations of the Commission, or actshaving material effect upon the com-merce of the U.S.; and authority to rec-ommend to the Commission the initi-ation of formal proceedings or otheractions with respect to such alleged orsuspected violations.

[59 FR 954, Jan. 7, 1994, as amended at 59 FR54396, Oct. 31, 1994; 60 FR 27229, May 23, 1995;60 FR 27698, May 25, 1995]

§ 501.28 Delegation to the Director, Bu-reau of Enforcement.

The authorities listed in this sectionare delegated to the Director, Bureauof Enforcement. Notwithstanding theprovisions of § 501.21, the Director maydelegate or redelegate, in writing, spe-cific authority to individuals withinthe Bureau of Enforcement other thanthe Deputy Director.

(a) Authority to compromise civilpenalty claims has been delegated tothe Director, Bureau of Enforcement,by § 502.604(g) of this chapter. This dele-gation shall include the authority tocompromise issues relating to the re-tention, suspension or revocation ofocean freight forwarder licenses. Seealso §§ 501.5(i) and 501.21.

(b) Authority to approve administra-tive leave for Area Representatives.

[60 FR 57941, Nov. 24, 1995, as amended at 61FR 51231, Oct. 1, 1996]


§ 501.30 Delegation to and redelega-tion by Director, Bureau of Admin-istration.

Except where specifically redelegatedin this section, the authorities listed in

this section are delegated to the Direc-tor, Bureau of Administration, and, inthe absence or preoccupation of the Di-rector, to the Deputy Director of thatBureau.

(a)(1) Authority is delegated to theDirector, Bureau of Administration, toapprove, certify, or otherwise authorizethose actions dealing with appropria-tions of funds made available to theCommission including allotments, fis-cal matters, and contracts relating tothe operation of the Commission with-in the laws, rules, and regulations setforth by the Federal Government.

(2) The authority under this para-graph is redelegated to the Director,Office of Budget and Financial Manage-ment.

(b)(1) Authority is delegated to theDirector, Bureau of Administration, toclassify all positions GS–1 through GS–15 and wage grade positions.

(2) The authority under this para-graph is redelegated to the Director,Office of Personnel.

[59 FR 954, Jan. 7, 1994, as amended at 59 FR44641, Aug. 30, 1994. Redesignated and amend-ed at 59 FR 62330, Dec. 5, 1994]

Subpart D—Public Requests forInformation

§ 501.41 Public requests for informa-tion and decisions.

(a) General. Pursuant to 5 U.S.C.552(a)(1)(A), there is hereby stated andpublished for the guidance of the publicthe established places at which, the of-ficers from whom, and the methodswhereby, the public may secure infor-mation, make submittals or requests,or obtain decisions, principally by con-tacting by telephone, in writing, or inperson, either the Secretary of theCommission at the Federal MaritimeCommission, 800 North Capitol Street,NW., Washington, DC 20573, or the AreaRepresentatives listed in paragraph (d)of this section. See also part 503 of thischapter.

(b) The Secretary will provide infor-mation and decisions, and will acceptand respond to requests, relating to theprogram activities of the Office of theSecretary and of the Commission, gen-erally. Unless otherwise provided inthis chapter, any document, report, orother submission required to be filed


21


with the Commission by statute or theCommission’s rules and regulations re-lating to the functions of the Commis-sion or of the Office of the Secretaryshall be filed with or submitted to theSecretary.

(c) The Directors of the following bu-reaus and offices will provide informa-tion and decisions, and will accept andrespond to requests, relating to thespecific functions or program activitiesof their respective bureaus and officesas set forth in this chapter; but only ifthe dissemination of such informationor decisions is not prohibited by stat-ute or the Commission’s Rules of Prac-tice and Procedure:

(1) Office of the General Counsel;(2) Office of the Administrative Law

Judges;(3) Office of the Managing Director;(4) Office of the Inspector General ;(5) Office of Equal Employment Op-

portunity;(6) Bureau of Enforcement;(7) Bureau of Economics and Agree-

ment Analysis;(8) Bureau of Tariffs, Certification

and Licensing;(9) [Reserved];(10) Bureau of Administration;(11) Office of Personnel;(12) Office of Budget and Financial

Management;(13) Office of Information Resources

Management;(14) Office of Administrative Serv-

ices; and(15) Office of Informal Inquiries,

Complaints and Informal Dockets.(d) The Area Representatives will

provide information and decisions tothe public within their geographicareas, or will expedite the obtaining ofinformation and decisions from head-quarters. The addresses of these AreaRepresentatives are as follows. Further

information on Area Representatives,including Internet E-mail addresses,can be obtained on the Commission’shome page on the World Wide Web at‘‘www.fmc.gov.’’

Los Angeles

Los Angeles Area Representative, U.S.Customs House Building, P.O. Box3164, 300 S. Ferry Street, Room 1018,Terminal Island Station, San Pedro,CA 90731

Miami

Miami Area Representative, CustomsManagement Center, 909 SE, 1st Ave.,Room 736, Miami, FL 33131

New Orleans

New Orleans Area Representative, U.S.Customs House, 423 Canal Street,Room 303, New Orleans, LA 70130

Seattle

Seattle Area Representative, U.S. Cus-toms, 3236 16th Ave., SW, Seattle, WA98134

North Atlantic

North Atlantic Area Representative,Federal Maritime Commission, 800North Capitol Street, NW., Suite 928,Washington, DC 20573

(e) Any document, report or othersubmission required to be filed withthe Commission by statute or the Com-mission’s rules and regulations relat-ing to the specific functions of the bu-reaus and offices shall be filed with orsubmitted to the Director of such Bu-reau or Office.

[59 FR 954, Jan. 7, 1994, as amended at 59 FR67228, Dec. 29, 1994; 60 FR 57941, Nov. 24, 1995;61 FR 51231, Oct. 1, 1996]


22

46 CFR Ch. IV (10–1–96 Edition)Pt. 501, App. A

[61 FR 51232, Oct. 1, 1996]


23

Federal Maritime Commission Pt. 502

PART 502—RULES OF PRACTICEAND PROCEDURE

Subpart A—General Information

Sec.502.1 Scope of rules in this part.502.2 Filing of documents; hours; mailing

address.502.3 Compliance with rules or orders of

Commission.502.4 Authentication of rules or orders of

Commission.502.5—502.6 [Reserved]502.7 Documents in foreign languages.502.8 Denial of applications and notice

thereof.502.9 Suspension, amendment, etc., of rules

in this part.502.10 Waiver of rules in this part.502.11 Disposition of improperly filed docu-

ments and ex parte communications.502.12 Applicability of Federal Rules of

Civil Procedure.

Subpart B—Appearance and PracticeBefore the Commission

502.21 Appearance.502.22 Authority for representation.502.23 Notice of appearance; written appear-

ance; substitutions.502.24 Practice before the Commission de-

fined.502.25 Presiding officer defined.502.26 Attorneys at law.502.27 Persons not attorneys at law.502.29 Hearings.502.30 Suspension or disbarment.502.31 Statement of interest.502.32 Former employees.EXHIBIT NO. 1 TO SUBPART B [§§ 502.23, 502.26,

502.27]—NOTICE OF APPEARANCE

Subpart C—Parties

502.41 Parties; how designated.502.42 Bureau of Enforcement.502.43 Substitution of parties.502.44 Necessary and proper parties in cer-

tain complaint proceedings.

Subpart D—Rulemaking

502.51 Petition for issuance, amendment, orrepeal of rule.

502.52 Notice of proposed rulemaking.502.53 Participation in rulemaking.502.54 Contents of rules.502.55 Effective date of rules.502.56 Negotiated rulemaking.

Subpart E—Proceedings; Pleadings;Motions; Replies

502.61 Proceedings.502.62 Complaints and fee.

502.63 Reparation; statute of limitations.502.64 Answer to complaint; counter-com-

plaint.502.65 Replies to answers not permitted.502.66 Order to show cause.502.67 Proceedings under section 3(a) of the

Intercoastal Shipping Act, 1933.502.68 Declaratory orders and fee.502.69 Petitions—general and fee.502.70 Amendments or supplements to

pleadings.502.71 Motions for more definite statement.502.72 Petition for leave to intervene.502.73 Motions.502.74 Replies to pleadings, motions, appli-

cations, etc.502.75 Proceedings involving assessment

agreements.502.76 Brief of an amicus curiae.

EXHIBIT NO. 1 TO SUBPART E [§ 502.62]—COM-PLAINT FORM AND INFORMATION CHECKLIST

EXHIBIT NO. 2 TO SUBPART E [§ 502.64]—AN-SWER TO COMPLAINT

EXHIBIT NO. 3 TO SUBPART E [§ 502.72]—PETI-TION FOR LEAVE TO INTERVENE

Subpart F—Settlement; PrehearingProcedure

502.91 Opportunity for informal settlement.502.92 Special docket applications and fee.502.94 Prehearing conference.502.95 Prehearing statements.

EXHIBIT NO. 1 TO SUBPART F [§ 502.92]—APPLI-CATION FOR REFUND OF OR WAIVER FORFREIGHT CHARGES DUE TO TARIFF ERROR

Subpart G—Time

502.101 Computation.502.102 Enlargement of time to file docu-

ments.502.103 Reduction of time to file documents.502.104 Postponement of hearing.502.105 Waiver of rules governing enlarge-

ments of time and postponements ofhearings.

Subpart H—Form, Execution, and Serviceof Documents

502.111 Form and appearance of documentsfiled with Commission.

502.112 Subscription and verification of doc-uments.

502.113 Service by the Commission.502.114 Service and filing by parties.502.115 Service on attorney or other rep-

resentative.502.116 Date of service.502.117 Certificate of service.502.118 Copies of documents for use of the

Commission.502.119 Documents containing confidential

materials.


24

46 CFR Ch. IV (10–1–96 Edition)Pt. 502

Subpart I—Subpenas

502.131 Requests; issuance.502.132 Motions to quash or modify.502.133 Attendance and mileage fees.502.134 Service of subpenas.502.135 Subpena of Commission staff person-

nel, documents or things.502.136 Enforcement.

Subpart J—Hearings; Presiding Officers;Evidence

502.141 Hearings not required by statute.502.142 Hearings required by statute.502.143 Notice of nature of hearing, jurisdic-

tion and issues.502.144 Notice of time and place of hearing.502.145 Presiding officer.502.146 Commencement of functions of Of-

fice of Administrative Law Judges.502.147 Functions and powers.502.148 Consolidation of proceedings.502.149 Disqualification of presiding or par-

ticipating officer.502.150 Further evidence required by presid-

ing officer during hearing.502.151 Exceptions to rulings of presiding of-

ficer unnecessary.502.152 Offer of proof.502.153 Appeal from ruling of presiding offi-

cer other than orders of dismissal inwhole or in part.

502.154 Rights of parties as to presentationof evidence.

502.155 Burden of proof.502.156 Evidence admissible.502.157 Written evidence.502.158 Documents containing matter not

material.502.159 [Reserved]502.160 Records in other proceedings.502.161 Commission’s files.502.162 Stipulations.502.163 Receipt of documents after hearing.502.164 Oral argument at hearings.502.165 Official transcript.502.166 Corrections of transcript.502.167 Objection to public disclosure of in-

formation.502.168 Copies of data or evidence.502.169 Record of decision.

Subpart K—Shortened Procedure

502.181 Selection of cases for shortened pro-cedure; consent required.

502.182 Complaint and memorandum of factsand arguments and filing fee.

502.183 Respondent’s answering memoran-dum.

502.184 Complainant’s memorandum inreply.

502.185 Service of memoranda upon and byinterveners.

502.186 Contents of memoranda.502.187 Procedure after filing of memoranda.

Subpart L—Depositions, WrittenInterrogatories, and Discovery

502.201 General provisions governing discov-ery.

502.202 Persons before whom depositionsmay be taken.

502.203 Depositions upon oral examination.502.204 Depositions upon written interrog-

atories.502.205 Interrogatories to parties.502.206 Production of documents and things

and entry upon land for inspection andother purposes.

502.207 Requests for admission.502.208 Use of discovery procedures directed

to Commission staff personnel.502.209 Use of depositions at hearings.502.210 Refusal to comply with orders to an-

swer or produce documents; sanctions;enforcement.

Subpart M—Briefs; Requests for Findings;Decisions; Exceptions

502.221 Briefs; requests for findings.502.222 Requests for enlargement of time for

filing briefs.502.223 Decisions—administrative law

judges.502.224 Separation of functions.502.225 Decisions—contents and service.502.226 Decision based on official notice;

public documents.502.227 Exceptions to decisions or orders of

dismissal of administrative law judges;replies thereto; and review of decisionsor orders of dismissal by Commission.

502.228 Request for enlargement of time forfiling exceptions and replies thereto.

502.229 Certification of record by presidingor other officer.

502.230 Reopening by presiding officer orCommission.

Subpart N—Oral Argument; Submission forFinal Decision

502.241 Oral argument.502.242 Submission to Commission for final

decision.502.243 Participation of absent Commis-

sioner.

Subpart O—Reparation

502.251 Proof on award of reparation.502.252 Reparation statements.502.253 Interest in reparation proceedings.502.254 Attorney’s fees in reparation pro-

ceedings.

EXHIBIT NO. 1 TO SUBPART O [§ 502.252]—REP-ARATION STATEMENT TO BE FILED PURSU-ANT TO RULE 252


25


Subpart P—Reconsideration ofProceedings

502.261 Petitions for reconsideration andstay.

502.262 Reply to petition for reconsiderationor stay.

Subpart Q—Schedules and Forms

502.271 Schedule of information for presen-tation in regulatory cases.

Subpart R—Nonadjudicatory Investigations

502.281 Investigational policy.502.282 Initiation of investigations.502.283 Order of investigation.502.284 By whom conducted.502.285 Investigational hearings.502.286 Compulsory process.502.287 Depositions.502.288 Reports.502.289 Noncompliance with investigational

process.502.290 Rights of witness.502.291 Nonpublic proceedings.

Subpart S—Informal Procedure forAdjudication of Small Claims

502.301 Statement of policy.502.302 Limitations of actions.502.303 [Reserved]502.304 Procedure and filing fee.502.305 Applicability of other rules of this

part.EXHIBIT NO. 1 TO SUBPART S [§ 502.304(a)]—

SMALL CLAIM FORM FOR INFORMAL ADJU-DICATION AND INFORMATION CHECKLIST

EXHIBIT NO. 2 TO SUBPART S [§ 502.304(e)]—RE-SPONDENT’S CONSENT FORM FOR INFORMALADJUDICATION

Subpart T—Formal Procedure forAdjudication of Small Claims

502.311 Applicability.502.312 Answer to complaint.502.313 Reply of complainant.502.314 Additional information.502.315 Request for oral hearing.502.316 Intervention.502.317 Oral argument.502.318 Decision.502.319 Date of service and computation of

time.502.320 Service.502.321 Applicability of other rules of this

part.

Subpart U—Conciliation Service

502.401 Definitions.502.402 Policy.502.403 Persons eligible for service.502.404 Procedure and fee.502.405 Assignment of conciliator.

502.406 Advisory opinion.

Subpart V—Implementation of the EqualAccess to Justice Act in CommissionProceedings

502.501 General provisions.502.502 Information required from appli-

cants.502.503 Procedures for considering petitions.

Subpart W—Compromise, Assessment,Mitigation, Settlement, and Collectionof Civil Penalties

502.601 Purpose and scope.502.602 Definitions.502.603 Assessment of civil penalties: Proce-

dure; criteria for determining amount;limitations; relation to compromise.

502.604 Compromise of penalties: Relationto assessment proceedings.

502.605 Payment of penalty: Method; de-fault.

APPENDIX A TO SUBPART W—EXAMPLE OFCOMPROMISE AGREEMENT TO BE USEDUNDER 46 CFR 502.604

Subpart X—Paperwork Reduction Act

502.991 OMB control numbers assigned pur-suant to the Paperwork Reduction Act.

AUTHORITY: 5 U.S.C. 504, 551, 552, 553, 556(c),559, 561–569, 571–596; 12 U.S.C. 1141j(a); 18U.S.C. 207; 26 U.S.C. 501(c)(3); 28 U.S.C.2112(a); 31 U.S.C. 9701; 46 U.S.C. app. 817, 820,821, 826, 841a, 1114(b), 1705, 1707–1711, 1713–1716;E.O. 11222 of May 8, 1965 (30 FR 6469); 21U.S.C. 853a; and Pub. L. 88–777 (46 U.S.C. app.817d, 817e).

SOURCE: 49 FR 44369, Nov. 6, 1984, unlessotherwise noted.

Subpart A—General Information§ 502.1 Scope of rules in this part.

The rules in this part govern proce-dure before the Federal Maritime Com-mission, hereinafter referred to as theCommission, under the Shipping Act,1916, Merchant Marine Act, 1920, Inter-coastal Shipping Act, 1933, MerchantMarine Act, 1936, Shipping Act of 1984,Administrative Procedure Act, and re-lated acts, except that subpart R ofthis part does not apply to proceedingssubject to sections 7 and 8 of the Ad-ministrative Procedure Act, which areto be governed only by subparts A to Qinclusive, of this part. They shall beconstrued to secure the just, speedy,and inexpensive determination of everyproceeding. [Rule 1.] To this end, all


26

46 CFR Ch. IV (10–1–96 Edition)§ 502.2

persons involved in proceedings con-ducted under the rules of this partshall be required to consider at anearly stage of the proceeding whetherresort to alternative dispute resolutiontechniques would be appropriate oruseful.

[49 FR 44369, Nov. 6, 1984, as amended at 58FR 38649, July 19, 1993]

§ 502.2 Filing of documents; hours;mailing address.

(a) For purposes of filing of docu-ments with the Commission, the hoursof the Commission are from 8:30 a.m. to5:00 p.m., Monday to Friday, inclusive.

(b) Except for exhibits filed pursuantto § 502.118(b)(4) and petitions for re-view of final agency orders served onthe Commission pursuant to 28 U.S.C.2112(a), all documents required to befiled in, and correspondence relating toproceedings governed by this partshould be addressed to Secretary, Fed-eral Maritime Commission, Washington,DC 20573–0001. Petitions for review offinal agency orders served on the Com-mission pursuant to 28 U.S.C. 2112(a)shall be addressed to General Counsel,Office of the General Counsel, FederalMaritime Commission, Washington, DC20573–0001.

(c) Documents relating to any matterpending before the Commissioners fordecision or to any matter pending be-fore the Commission which is likely tocome before the Commissioners for de-cision, whether or not relating to pro-ceedings governed by this part, shallsimilarly be filed with the Secretary,Federal Maritime Commission. Suchdocuments should not be filed with orseparately submitted to the offices ofindividual Commissioners. Distributionto Commissioners and other agencypersonnel is handled by the Office ofthe Secretary, to ensure that personsin decision-making and advisory posi-tions receive in a uniform and imper-sonal manner identical copies of sub-missions, and to avoid the possibilityof ex parte communications within themeaning of § 502.11(b). These consider-ations apply to informal and oral com-munications as well, such as requestsfor expedited consideration.

(d) No filings relating to mattersscheduled for a Commission meetingwill be accepted by the Secretary if

submitted subsequent to public an-nouncement of the particular meeting,except that the Commission, on its owninitiative, or pursuant to a written re-quest, may in its discretion, permit adeparture from this limitation for ex-ceptional circumstances. (See § 503.82(e)of this chapter.) [Rule 2.]

[52 FR 27002, July 17, 1987, as amended at 53FR 13270, Apr. 22, 1988]

§ 502.3 Compliance with rules or or-ders of Commission.

Persons named in a rule or ordershall notify the Commission duringbusiness hours on or before the day onwhich such rule or order becomes effec-tive whether they have complied there-with, and if so, the manner in whichcompliance has been made. If a changein rates is required, the notificationshall specify the tariffs which effectthe changes. [Rule 3.]

§ 502.4 Authentication of rules or or-ders of Commission.

All rules or orders issued by the Com-mission in any proceeding covered bythis part shall, unless otherwise spe-cifically provided, be signed and au-thenticated by seal by the Secretary ofthe Commission in the name of theCommission. [Rule 4.]

§§ 502.5—502.6 [Reserved]

§ 502.7 Documents in foreign lan-guages.

Every document, exhibit, or otherpaper written in a language other thanEnglish and filed with the Commissionor offered in evidence in any proceed-ing before the Commission under thispart or in response to any rule or orderof the Commission pursuant to thispart, shall be filed or offered in the lan-guage in which it is written and shallbe accompanied by an English trans-lation thereof duly verified under oathto be an accurate translation. [Rule 7.]

§ 502.8 Denial of applications and no-tice thereof.

Except in affirming a prior denial orwhere the denial is self-explanatory,prompt written notice will be given ofthe denial in whole or in part of anywritten application, petition, or otherrequest made in connection with any


27


proceeding under this part, such noticeto be accompanied by a simple state-ment of procedural or other groundsfor the denial, and of any other or fur-ther administrative remedies or re-course applicant may have where thedenial is based on procedural grounds.[Rule 8.]

§ 502.9 Suspension, amendment, etc., ofrules in this part.

The rules in this part may, from timeto time, be suspended, amended, or re-voked, in whole or in part. Notice ofany such action will be published inthe FEDERAL REGISTER. [Rule 9.]

§ 502.10 Waiver of rules in this part.Except to the extent that such waiv-

er would be inconsistent with any stat-ute, any of the rules in this part, ex-cept §§ 502.11 and 502.153, may be waivedby the Commission or the presiding of-ficer in any particular case to preventundue hardship, manifest injustice, orif the expeditious conduct of businessso requires. [Rule 10.]

§ 502.11 Disposition of improperly fileddocuments and ex parte commu-nications.

(a) Documents not conforming to rules.Any pleading, document, writing orother paper submitted for filing whichis rejected because it does not conformto the rules in this part shall be re-turned to the sender;

(b) Ex parte communications. (1) Noperson who is a party to or an agent ofa party to any proceeding as defined in§ 502.61 or who directly participates inany such proceeding and no interestedperson outside the Commission shallmake or knowingly cause to be madeto any Commission member, adminis-trative law judge, or Commission em-ployee who is or may reasonably be ex-pected to be involved in the decisionalprocess of any such proceeding, an exparte communication relevant to themerits of the proceeding;

(2) No Commission member, adminis-trative law judge, or Commission em-ployee who is or may reasonably be ex-pected to be involved in the decisionalprocess of any agency proceeding, shallmake or knowingly cause to be madeto any interested persons outside theCommission or to any party to the pro-

ceeding or its agent or to any directparticipant in a proceeding, an ex partecommunication relevant to the meritsof the proceeding. This prohibitionshall not be construed to prevent anyaction authorized by paragraphs (b) (5),(6) and (7) of this section;

(3) ‘‘Ex parte communication’’ meansan oral or written communication noton the public record with respect towhich reasonable prior notice to allparties is not given, but it shall not in-clude requests for status reports orcommunications regarding purely pro-cedural matters or matters which theCommission or member thereof, admin-istrative law judge, or Commission em-ployee is authorized by law or theserules to dispose of on an ex parte basis;

(4) Any Commission member, admin-istrative law judge, or Commission em-ployee who is or may reasonably be ex-pected to be involved in the decisionalprocess of any proceeding who receives,or who makes or knowingly causes tobe made, an ex parte communicationshall promptly transmit to the Sec-retary of the Commission:

(i) All such written communications;(ii) Memoranda stating the substance

of all such oral communications; and(iii) All written responses and memo-

randa stating the substance of all oralresponses to the materials described inparagraphs (b)(4)(i) and (b)(4)(ii) of thissection;

(5) The Secretary shall place the ma-terials described in paragraph (b)(4) ofthis section in the correspondence partof the public docket of the proceedingand may take such other action as maybe appropriate under the cir-cumstances;

(6) Upon receipt of an ex parte com-munication knowingly made or know-ingly caused to be made by a party toa proceeding, the Commission or thepresiding officer may, to the extentconsistent with the interests of justiceand the policy of the statutes adminis-tered by the Commission, require theparty to show cause why his or herclaim or interest in the proceedingshould not be dismissed, denied, dis-regarded, or otherwise adversely af-fected on account of the making ofsuch communication;

(7) An ex parte communication shallnot constitute a part of the record for


28

46 CFR Ch. IV (10–1–96 Edition)§ 502.12

decision. The Commission or the pre-siding officer may, to the extent con-sistent with the interests of justice andthe policy of the statutes administeredby the Commission, consider a viola-tion of paragraph (b) of this sectionsufficient grounds for a decision ad-verse to a party who has knowinglycaused such violation to occur and maytake such other action as may be ap-propriate under the circumstances.[Rule 11.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

§ 502.12 Applicability of Federal Rulesof Civil Procedure.

In proceedings under this part, forsituations which are not covered by aspecific Commission rule, the FederalRules of Civil Procedure will be fol-lowed to the extent that they are con-sistent with sound administrative prac-tice.

[58 FR 27210, May 7, 1993]

Subpart B—Appearance andPractice Before the Commission

§ 502.21 Appearance.

(a) Parties. A party may appear inperson or by an officer, partner, or reg-ular employee of the party, or by orwith counsel or other duly qualifiedrepresentative, in any proceedingunder the rules in this part. Any partyor his or her representative may tes-tify, produce and examine witnesses,and be heard upon brief and at oral ar-gument if oral argument is granted.

(b) Persons not parties. One who ap-pears in person before the Commissionor a representative thereof, either bycompulsion from, or request or permis-sion of the Commission, shall be ac-corded the right to be accompanied,represented, and advised by counsel.

(c) Special requirement. An appearancemay be either general, that is, withoutreservation, or it may be special, thatis, confined to a particular issue orquestion. If a person desires to appearspecially, he or she must expressly sostate when entering the appearanceand, at that time, shall also state thequestions or issues to which he or sheis confining the appearance; otherwise

his or her appearance will be consid-ered as general. [Rule 21.]

§ 502.22 Authority for representation.

Any individual acting in a represent-ative capacity in any proceeding beforethe Commission may be required toshow his or her authority to act insuch capacity. [Rule 22.]

§ 502.23 Notice of appearance; writtenappearance; substitutions.

(a) Within twenty (20) days afterservice of an order or complaint insti-tuting a proceeding, complainants, re-spondents, and/or petitioners namedtherein shall notify the Commission ofthe name(s) and address(es) of the per-son or persons who will represent themin the pending proceeding. Each personwho appears at a hearing shall delivera written notice of appearance to thereporter, stating for whom the appear-ance is made. All appearances shall benoted in the record. Petitions for leaveto intervene shall indicate the name(s)and address(es) of the person or personswho will represent the intervenor inthe pending proceeding if the petitionis granted. If an attorney or other rep-resentative of record is superseded,there shall be filed a stipulation of sub-stitution signed both by the attor-ney(s) or representative(s) and by theparty, or a written notice from the cli-ent to the Commission.

(b) A form of Notice of Appearance isset forth in Exhibit No. 1 to this sub-part. This form also contains a requestand authorization for counsel to be no-tified immediately of the service of de-cisions of the presiding officer and theCommission by collect telephone callor telegram. Copies of this form may beobtained from the Office of the Sec-retary. [Rule 23.]

§ 502.24 Practice before the Commis-sion defined.

(a) Practice before the Commissionshall be deemed to comprehend allmatters connected with the presen-tation of any matter to the Commis-sion, including the preparation and fil-ing of necessary documents, and cor-respondence with and communicationsto the Commission, on one’s own behalfor representing another. (See § 502.32).


29


(b) The term ‘‘Commission’’ as usedin this subpart includes any bureau, di-vision, office, branch, section, unit, orfield office of the Federal MaritimeCommission and any officer or em-ployee of such bureau, division, office,branch, section, unit, or field office.[Rule 24.]

§ 502.25 Presiding officer defined.

‘‘Presiding officer’’ means and shallinclude (a) any one or more of themembers of the Commission (not in-cluding the Commission when sittingas such), (b) one or more administra-tive law judges or (c) one or more offi-cers authorized by the Commission toconduct nonadjudicatory proceedingswhen duly designated to preside atsuch proceedings. (See subpart J of thispart.) [Rule 25.]

§ 502.26 Attorneys at law.

Attorneys at law who are admittedto practice before the Federal courts orbefore the courts of any State or Terri-tory of the United States may practicebefore the Commission. An attorney’sown representation that he is such ingood standing before any of the courtsherein referred to will be sufficientproof thereof, if made in writing andfiled with the Secretary. [Rule 26.]

§ 502.27 Persons not attorneys at law.

(a)(1) Any person who is not an attor-ney at law may be admitted to practicebefore the Commission if he or she is acitizen of the United States and filesproof to the satisfaction of the Com-mission that he or she possesses thenecessary legal, technical, or otherqualifications to render valuable serv-ice before the Commission and is other-wise competent to advise and assist inthe presentation of matters before theCommission. Applications by personsnot attorneys at law for admission topractice before the Commission shallbe made on the forms prescribed there-for, which may be obtained from theSecretary of the Commission, and shallbe addressed to the Federal MaritimeCommission, Washington, DC, 20573,and shall be accompanied by a fee asrequired by § 503.43(h) of this chapter.

(2) All applicants must complete thefollowing certification:

I. lll (Name lll, certify under pen-alty of perjury under the laws of the UnitedStates, that I have not been convicted, afterSeptember 1, 1989, of any Federal or State of-fense involving the distribution or possessionof a controlled substance, or that if I havebeen so convicted, I am not ineligible to re-ceive Federal benefits, either by court orderor operation of law, pursuant to 21 U.S.C.853a.

(b) No person who is not an attorneyat law and whose application has notbeen approved shall be permitted topractice before the Commission.

(c) Paragraph (b) of this section andthe provisions of §§ 502.29 and 502.30shall not apply, however, to any personwho appears before the Commission onhis or her own behalf or on behalf ofany corporation, partnership, or asso-ciation of which he or she is a partner,officer, or regular employee. [Rule 27.]

[49 FR 44369, Nov. 6, 1984, as amended at 55FR 42194, Oct. 18, 1990; 58 FR 58976, Nov. 5,1993]

§ 502.29 Hearings.

The Commission, in its discretion,may call upon the applicant for a fullstatement of the nature and extent ofhis or her qualifications. If the Com-mission is not satisfied as to the suffi-ciency of the applicant’s qualifications,it will so notify him or her by reg-istered mail, whereupon he or she shallbe granted a hearing upon request forthe purpose of showing his or her quali-fications. If the applicant presents tothe Commission no request for suchhearing within twenty (20) days afterreceiving the notification above re-ferred to, his or her application shallbe acted upon without further notice.[Rule 29.]

§ 502.30 Suspension or disbarment.

The Commission may deny admissionto, suspend, or disbar any person frompractice before the Commission who itfinds does not possess the requisitequalifications to represent others or islacking in character, integrity, orproper professional conduct. Any per-son who has been admitted to practicebefore the Commission may be dis-barred from such practice only afterbeing afforded an opportunity to beheard. [Rule 30.]


30

46 CFR Ch. IV (10–1–96 Edition)§ 502.31

§ 502.31 Statement of interest.The Commission may call upon any

practitioner for a full statement of thenature and extent of his or her interestin the subject matter presented by himor her before the Commission. [Rule31.]

§ 502.32 Former employees.Title V of the Ethics in Government

Act proscribes certain activities bycertain former Federal employees (18U.S.C. 207). In summary, as applied toformer Commission employees, the re-strictions and basic procedures are asfollows:

(a) Restrictions. (1) No former Com-mission employee may represent in anyformal or informal appearance or makeany oral or written communicationwith intent to influence a U.S. Govern-ment agency in a particular matter in-volving a specific party or parties inwhich the employee participated per-sonally and substantially while withthe Commission.

(2) No former Commission employeemay, within two years of terminatingCommission employment, act as a rep-resentative in the manner described inparagraph (a)(1) of this section, as to aparticular matter which was actuallypending under the employee’s officialresponsibility within one year prior totermination of the employment.

(3) Former senior Commission em-ployees (defined as Commissioners andmembers of the Senior Executive Serv-ice as designated by the Office of Gov-ernment Ethics under 18 U.S.C.207(d)(1)) may not, for two years afterterminating Commission employment,assist in representing a person by per-sonal presence at an appearance beforethe Government on a matter in whichthe former employee had participatedpersonally and substantially while atthe Commission.

(4) Former senior Commission em-ployees, as defined in paragraph (a)(3)of this section, are barred for one yearfrom representing parties before theCommission or communicating withintent to influence the Commission, re-gardless of prior involvement in theparticular proceeding.

(b) Prior consent for appearance. (1)Prior to making any appearance, rep-resentation or communication de-

scribed in paragraph (a) of this section,and, in addition to other requirementsof this subpart, every former employeemust apply for and obtain prior writtenconsent of the Commission for eachproceeding or matter in which such ap-pearance, representation, or commu-nication is contemplated. Such consentwill be given only if the Commissiondetermines that the appearance, rep-resentation or communication is notprohibited by the Act, this section orother provisions of this chapter.

(2) To facilitate the Commission’s de-termination that the intended activityis not prohibited, applications for writ-ten consent shall:

(i) Be directed to the Commission,state the former connection of the ap-plicant with the Commission and dateof termination of employment, andidentify the matter in which the appli-cant desires to appear; and

(ii) Be accompanied by an affidavit tothe effect that the matter for whichconsent is requested is not a matter inwhich the applicant participated per-sonally and substantially while at theCommission and, as made applicable byparagraph (a) of this section, that theparticular matter as to which consentis requested was not pending under theapplicant’s official responsibility with-in one year prior to termination of em-ployment and that the matter was notone in which the former employee hadparticipated personally and substan-tially while at the Commission. Thestatements contained in the affidavitshall not be sufficient if disproved byan examination of the files and recordsof the case.

(3) The applicant shall be promptlyadvised as to his or her privilege to ap-pear, represent or communicate in theparticular matter, and the application,affidavit and consent, or refusal to con-sent, shall be filed by the Commissionin its records relative thereto.

(c) Basic procedures for possible viola-tions. The following basic guidelines foradministrative enforcement restric-tions on post employment activitiesare designed to expedite consultationwith the Director of the Office of Gov-ernment Ethics as required pursuant tosection 207(j) of Title 18, United StatesCode.


31


(1) Delegation. The Chairman maydelegate his or her authority underthis subpart.

(2) Initiation of administrative discipli-nary hearing. (i) On receipt of informa-tion regarding a possible violation of 18U.S.C. 207, and after determining thatsuch information appears substan-tiated, the Chairman shall expedi-tiously provide such information, alongwith any comments or agency regula-tions, to the Director of the Office ofGovernment Ethics and to the Crimi-nal Division, Department of Justice.The Commission shall coordinate anyinvestigation or administrative actionwith the Department of Justice toavoid prejudicing criminal proceedings,unless the Department of Justice com-municates to the Commission that itdoes not intend to initiate criminalprosecution.

(ii) Whenever the Commission has de-termined after appropriate review thatthere is reasonable cause to believethat a former Commission employeehas violated any provision of paragraph(a) of this section or 18 U.S.C. 207 (a),(b), or (c), it may initiate an adminis-trative disciplinary proceeding by pro-viding the former Commission em-ployee with notice as defined in para-graph (c)(3) of this section.

(3) Adequate notice. (i) The Commis-sion shall provide a former Commissionemployee with adequate notice of anintention to institute a proceeding andan opportunity for a hearing.

(ii) Notice to the former Commissionemployee must include:

(A) A statement of allegations (andthe basis thereof) sufficiently detailedto enable the former Commission em-ployee to prepare an adequate defense;

(B) Notification of the right to ahearing; and

(C) An explanation of the method bywhich a hearing may be requested.

(4) Presiding official. (i) The presidingofficial at a proceeding under this sec-tion shall be an individual to whom theChairman has delegated authority tomake an initial decision (hereinafterreferred to as ‘‘examiner’’).

(ii) The examiner must be a Commis-sioner (other than the Chairman), anadministrative law judge, or an attor-ney employed by the Commission andshall be provided with appropriate ad-

ministrative and secretarial support bythe Commission.

(iii) The presiding official shall beimpartial. No individual who has par-ticipated in any manner in the decisionto initiate a proceeding may serve asan examiner in that proceeding.

(5) Time, date and place. (i) The hear-ing shall be conducted at a reasonabletime, date and place.

(ii) In setting a hearing date, the pre-siding official shall give due regard tothe former Commission employee’sneed for:

(A) Adequate time to prepare a de-fense properly, and

(B) An expeditious resolution of alle-gations that may be damaging to his orher reputation.

(6) Hearing rights. A hearing shall in-clude, at a minimum, the followingrights:

(i) To represent oneself or to be rep-resented by counsel;

(ii) To introduce and examine wit-nesses and to submit physical evidence;

(iii) To confront and cross-examineadverse witnesses;

(iv) To receive a transcript or record-ing of the proceedings, on request.

(7) Burden of proof. In any hearingunder this subpart, the Commissionhas the burden of proof and must estab-lish substantial evidence of a violation.

(8) Initial decision. (i) The examinershall make a determination on mattersexclusively of record in a proceeding,and shall set forth in the decision allfindings of fact and conclusions of lawrelevant to the matters at issue.

(ii) Within a reasonable period of thedate of an initial decision, as set by theCommission, either party may appealthe decision solely on the record to theChairman. The Chairman shall base hisor her decision solely on the record ofthe proceedings or those portionsthereof cited by the parties to limit theissues.

(iii) If the Chairman modifies or re-verses the initial decision, he or sheshall specify such findings of facts andconclusions of law as are different fromthose of the examiner.

(9) Administrative sanctions. TheChairman may take appropriate actionin the case of any individual who wasfound in violation of 18 U.S.C. 207 (a),


32

46 CFR Ch. IV (10–1–96 Edition)Pt. 502, Subpt. B, Exh. 1

(b), or (c) or the provisions of para-graph (a) of this section after a finaladministrative decision or who failedto request a hearing after receivingadequate notice by:

(i) Prohibiting the individual frommaking, on behalf of any other personexcept the United States, any formalor informal appearance before, or, withthe intent to influence, any oral orwritten communication to, the Com-mission on any matter of business for aperiod not to exceed five (5) years,which may be accomplished by direct-ing Commission employees to refuse toparticipate in any such appearance orto accept any such communication; or

(ii) Taking other appropriate discipli-nary action.

(10) Judicial review. Any person foundto have participated in a violation of 18U.S.C. 207 (a), (b), or (c) or the provi-sions of paragraph (a) of this sectionmay seek judicial review of the admin-istrative determination.

(11) Consultation and review. The pro-cedures for administrative enforcementset forth in paragraphs (a), (b), and (c)of this section have been reviewed bythe Director of the Office of Govern-ment Ethics.

(d) Partners or associates. (1) In anycase in which a former member, officer,or employee of the Commission is pro-hibited under this section from practic-ing, appearing, or representing anyonebefore the Commission in a particularCommission matter, any partner orlegal or business associate of suchformer member, officer, or employeeshall be prohibited from (i) utilizingthe services of the disqualified formermember, officer, or employee in con-nection with the matter, (ii) discussingthe matter in any manner with the dis-qualified former member, officer, oremployee, and (iii) sharing directly orindirectly with the disqualified formermember, officer, or employee in anyfees or revenues received for servicesrendered in connection with such mat-ter.

(2) The Commission may require anypractitioner or applicant to become apractitioner to file an affidavit to theeffect that the practitioner or appli-cant will not: (i) Utilize the service of,(ii) discuss the particular matter with,or (iii) share directly or indirectly any

fees or revenues received for servicesprovided in the particular matter, witha partner, fellow employee, or legal orbusiness associate who is a formermember, officer or employee of theCommission and who is either perma-nently or temporarily precluded frompracticing, appearing or representinganyone before the Commission in con-nection with the particular matter;and that the applicant’s employment isnot prohibited by any law of the UnitedStates or by the regulations of theCommission. [Rule 32.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

EXHIBIT NO. 1 TO SUBPART B [§§ 502.23,502.26, 502.27]

NOTICE OF APPEARANCE

Federal Maritime Commission

Notice of Appearance

Docket No. ———:

————————————————————————Please enter my appearance in this pro-

ceeding as counsel for:b I request to be informed by telephone or

telegram of service of the administrative lawjudge’s initial or recommended decision andof the Commission’s decision in this proceed-ing. In the event I am not available whenyou call, appropriate advice left with my of-fice will suffice.

Washington area: I understand I will be in-formed by telephone.

Outside Washington area: I authorizeb collect telephone callb collect telegram

b I do not desire the above notice.

————————————————————————

[Name]

————————————————————————

[Address]

————————————————————————

[Telephone No.]

NOTE: Must be signed by attorney at lawadmitted to practice before the FederalCourts or before the courts of any State orTerritory of the United States or by a personnot an attorney at law who has been admit-ted to practice before the Commission or bya person appearing on his or her own behalfor on behalf of any corporation, partnership,or association of which he or she is a part-ner, officer, or regular employee.


33


Subpart C—Parties§ 502.41 Parties; how designated.

The term ‘‘party’’, whenever used inthe rules in this part, shall include anynatural person, corporation, associa-tion, firm, partnership, trustee, re-ceiver, agency, public or private orga-nization, or governmental agency. Aparty who seeks relief or other affirma-tive action under § 502.62 shall be des-ignated as ‘‘complainant’’. A partyagainst whom relief or other affirma-tive action is sought in any proceedingcommenced under § 502.62, § 502.66, or§ 502.67, or a party named in an order ofinvestigation issued by the Commis-sion, shall be designated as ‘‘respond-ent,’’ except that in investigations in-stituted under section 15 of the Ship-ping Act, 1916 or section 11(c) of theShipping Act of 1984, the parties to theagreement shall be designated as ‘‘pro-ponents’’ and the parties protesting theagreement shall be designated as‘‘protestants’’. A person who has beenpermitted to intervene under § 502.72shall be designated as ‘‘intervenor’’.All persons or parties designated inthis section shall become parties to theproceeding involved without furtherpleadings, and no person other than aparty or its representative may intro-duce evidence or examine witnesses athearings. [Rule 41.]

§ 502.42 Bureau of Enforcement.The Director, Bureau of Enforce-

ment, shall be a party to all proceed-ings governed by the rules in this part,except that in complaint proceedingsunder § 502.62, the Director may becomea party only upon leave to intervenegranted pursuant to § 502.72, and inrulemaking proceedings, the Directormay become a party by designation, ifthe Commission determines that thecircumstances of the proceeding war-rant such participation. The Directoror the Director’s representative shallbe served with copies of all papers,pleadings, and documents in every pro-ceeding in which the Bureau of En-forcement is a party. The Bureau ofEnforcement shall actively participatein any proceeding to which the Direc-tor is a party, to the extent required inthe public interest, subject to the sepa-ration of functions required by section

5(c) of the Administrative ProcedureAct. (See § 502.224.) [Rule 42.]

[61 FR 51233, Oct. 1, 1996]

§ 502.43 Substitution of parties.In appropriate circumstances, the

Commission or presiding officer mayorder an appropriate substitution ofparties. [Rule 43.]

§ 502.44 Necessary and proper partiesin certain complaint proceedings.

(a) If a complaint relates to throughtransportation by continuous carriageor transshipment, all carriers partici-pating in such through transportationshall be joined as respondents.

(b) If the complaint relates to morethan one carrier or other person sub-ject to the shipping acts, all carriers orother persons against whom a rule ororder is sought shall be made respond-ents.

(c) If complaint is made with respectto an agreement filed under section 15of the Shipping Act, 1916 or section 5(a)of the Shipping Act of 1984, the partiesto the agreement shall be made re-spondents. [Rule 44.]

Subpart D—Rulemaking§ 502.51 Petition for issuance, amend-

ment, or repeal of rule.Any interested party may file with

the Commission a petition for the issu-ance, amendment, or repeal of a ruledesigned to implement, interpret, orprescribe law, policy, organization,procedure, or practice requirements ofthe Commission. The petition shall setforth the interest of petitioner and thenature of the relief desired, shall in-clude any facts, views, arguments, anddata deemed relevant by petitioner,and shall be verified. If such petition isfor the amendment or repeal of a rule,it shall be accompanied by proof ofservice on all persons, if any, specifi-cally named in such rule, and shallconform in other aspects to subpart Hof this part. Petitions shall be accom-panied by remittance of a $50 filing fee.Replies to such petition shall conformto the requirements of § 502.74. [Rule51.]



34

46 CFR Ch. IV (10–1–96 Edition)§ 502.52

§ 502.52 Notice of proposed rule-making.

(a) General notice of proposed rule-making, including the informationspecified in § 502.143, shall be publishedin the FEDERAL REGISTER, unless allpersons subject thereto are named and,either are personally served, or other-wise have actual notice thereof in ac-cordance with law.

(b) Except where notice of hearing isrequired by statute, this section shallnot apply to interpretative rules, gen-eral statements of policy, organizationrules, procedure, or practice of theCommission, or any situation in whichthe Commission for good cause finds(and incorporates such findings in suchrule) that notice and public procedureare impracticable, unnecessary, or con-trary to the public interest. [Rule 52.]

§ 502.53 Participation in rulemaking.

(a) Interested persons will be affordedan opportunity to participate in rule-making through submission of writtendata, views, or arguments, with orwithout opportunity to present thesame orally in any manner. No repliesto the written submissions will be al-lowed unless, because of the nature ofthe proceeding, the Commission indi-cates that replies would be necessaryor desirable for the formulation of ajust and reasonable rule, except that,where the proposed rules are such asare required by statute to be made onthe record after opportunity for a hear-ing, such hearing shall be conductedpursuant to 5 U.S.C. 556 and 557, andthe procedure shall be the same asstated in subpart J of this part. In theevent that replies or succeeding roundsof comments are permitted, copiesshall be served on all prior participantsin the proceeding. A list of participantsmay be obtained from the Secretary ofthe Commission.

(b) In those proceedings in which re-spondents are named, interested per-sons who wish to participate shall filea petition to intervene in accordancewith the provisions of § 502.72 [Rule 53.]


§ 502.54 Contents of rules.

The Commission will incorporate inany rules adopted a concise generalstatement of their basis and purpose.[Rule 54.]

§ 502.55 Effective date of rules.

The publication or service of any sub-stantive rule shall be made not lessthan thirty (30) days prior to its effec-tive date except (a) as otherwise pro-vided by the Commission for goodcause found and published in the FED-ERAL REGISTER or (b) in the case ofrules granting or recognizing exemp-tion or relieving restriction; interpre-tative rules; or statements of policy.[Rule 55.]

§ 502.56 Negotiated rulemaking.

The Commission, either upon peti-tion of interested persons or upon itsown motion, may establish a nego-tiated rulemaking committee to nego-tiate and develop consensus on a pro-posed rule, if, upon consideration of thecriteria of 5 U.S.C. 563, use of such acommittee is determined by the Com-mission to be in the public interest.

[58 FR 38649, July 19, 1993]

Subpart E—Proceedings;Pleadings; Motions; Replies

§ 502.61 Proceedings.(a) Proceedings are commenced by

the filing of a complaint, or by order ofthe Commission upon petition or uponits own motion, or by reference by theCommission to the formal docket of apetition for a declaratory order.

(b) In proceedings referred to the Of-fice of Administrative Law Judges, theCommission shall specify a date on orbefore which hearing shall commence,which date shall be no more than sixmonths from the date of publication inthe FEDERAL REGISTER of the Commis-sion’s order instituting the proceedingsor notice of complaint filed. Hearingdates may be deferred by the presidingjudge only to prevent substantialdelay, expense, detriment to the publicinterest or undue prejudice to a party.

(c) In the order instituting a proceed-ing or in the notice of filing of com-plaint and assignment, the Commission


35


shall establish dates by which the ini-tial decision and the final Commissiondecision will be issued. These datesmay be extended by order of the Com-mission for good cause shown. [Rule61.]

(d) All orders instituting a proceed-ing or noticing the filing of a com-plaint will contain language requiringthat prior to the commencement oforal hearings consideration shall begiven by the parties and presiding offi-cer to the use of alternative forms ofdispute resolution, and further requir-ing that hearings shall include oral tes-timony and cross-examination in thediscretion of the presiding officer onlyupon proper showing that there aregenuine issues of material fact thatcannot be resolved on the basis ofsworn statements, affidavits, deposi-tions, or other documents, or that thenature of the matter in issue is suchthat an oral hearing and cross-exam-ination are necessary for the develop-ment of an adequate record.


§ 502.62 Complaints and fee.(a) The complaint must be verified

and shall contain the name and addressof each complainant, the name and ad-dress of each complainant’s attorney oragent, the name and address of eachperson against whom complaint ismade, a concise statement of the causeof action, and a request for the relief orother affirmative action sought.

(b) Where reparation is sought andthe nature of the proceeding so re-quires, the complaint shall set forth:the ports of origin and destination ofthe shipments; consignees, or real par-ties in interest, where shipments areon ‘‘order’’ bill of lading; consignors;date of receipt by carrier or tender ofdelivery to carrier; names of vessels;bill of lading number (and other identi-fying reference); description of com-modities; weights; measurement; rates;charges made or collected; when,where, by whom and to whom rates andcharges were paid; by whom the ratesand charges were borne; the amount ofdamage; and the relief sought. Exceptunder unusual circumstances and forgood cause shown, reparation will notbe awarded upon a complaint in which

it is not specifically asked for, norupon a new complaint by or for thesame complainant which is based upona finding in the original proceeding.Wherever a rate, fare, charge, rule, reg-ulation, classification, or practice isinvolved, appropriate reference to thetariff should be made, if possible.

(c) If the complaint fails to indicatethe sections of the acts alleged to havebeen violated or clearly to state factswhich support the allegations, theCommission may, on its own initiative,require the complaint to be amended tosupply such further particulars as itdeems necessary.

(d) The complaint should designatethe place at which hearing is desired.

(e) A form of complaint is set forth inExhibit No. 1 to this subpart.

(f) The complaint shall be accom-panied by remittance of a $166 filingfee.

(g) For special types of cases, see§ 502.92 in subpart F (Special Docket ap-plications for refund or waiver); sub-part K (Shortened Procedure); and sub-part S (Small Claims). [Rule 62.]

[49 FR 44369, Nov. 6, 1984, as amended at 55FR 28399, July 11, 1990; 59 FR 59170, Nov. 16,1994]

§ 502.63 Reparation; statute of limita-tions.

(a) Complaints seeking reparationpursuant to section 22 of the ShippingAct, 1916 shall be filed within two (2)years after the cause of action accrues.

(b) Complaints seeking reparationpursuant to section 11 of the ShippingAct of 1984 shall be filed within threeyears after the cause of action accrues.

(c) The Commission will consider asin substantial compliance with a stat-ute of limitations a complaint in whichcomplainant alleges that the matterscomplained of, if continued in the fu-ture, will constitute violations of theshipping acts in the particulars and tothe extent indicated and in which com-plainant prays for reparation accord-ingly for injuries which may be sus-tained as a result of such violations.(See §§ 502.251–502.253 and Exhibit No. 1to subpart O.)

(d) Notification to the Commissionthat a complaint may or will be filedfor the recovery of reparation will not


36

46 CFR Ch. IV (10–1–96 Edition)§ 502.64

constitute a filing within the applica-ble statutory period.

(e) A complaint is deemed filed onthe date it is received by the Commis-sion. [Rule 63.]

§ 502.64 Answer to complaint; counter-complaint.

(a) Respondent shall file with theCommission an answer to the com-plaint and shall serve it on complain-ant as provided in subpart H of thispart within twenty (20) days after thedate of service of the complaint by theCommission or within thirty (30) daysif such respondent resides in Alaska orbeyond the Continental United States,unless such periods have been extendedunder § 502.71 or § 502.102, or reducedunder § 502.103, or unless motion is filedto withdraw or dismiss the complaint,in which latter case, answer shall bemade within ten (10) days after serviceof an order denying such motion. Suchanswer shall give notice of issues con-troverted in fact or law. Recitals ofmaterial and relevant facts in a com-plaint, amended complaint, or bill ofparticulars, unless specifically deniedin the answer thereto, shall be deemedadmitted as true, but if request is sea-sonably made, a competent witnessshall be made available for cross-exam-ination on such evidence.

(b) In the event that respondentshould fail to file and serve the answerwithin the time provided, the presidingofficer may enter such rule or order asmay be just, or may in any case requiresuch proof as he or she may deem prop-er, except that the presiding officermay permit the filing of a delayed an-swer after the time for filing the an-swer has expired, for good cause shown.

(c) A form of answer to complaint isset forth in Exhibit No. 2 to this sub-part. [Rule 64.]

(d) In addition to filing an answer toa complaint, respondent may file acounter-complaint alleging violationsof the Shipping Acts within the juris-diction of the Commission. The filingof counter-complaints and answers tocounter-complaints is governed by therules and requirements of § 502.62 (ex-cluding fees) and of this section for thefiling of complaints and answers.Counter-complaints may be served di-

rectly by the parties if authorized bythe presiding officer.

[49 FR 44369, Nov. 6, 1984, as amended at 58FR 27210, May 7, 1993]

§ 502.65 Replies to answers not per-mitted.

Replies to answers will not be per-mitted. New matters set forth in re-spondent’s answer will be deemed to becontroverted. [Rule 65.]

§ 502.66 Order to show cause.

The Commission may institute a pro-ceeding by order to show cause. Theorder shall be served upon all personsnamed therein, shall include the infor-mation specified in § 502.143, may re-quire the person named therein to an-swer, and shall require such person toappear at a specified time and placeand present evidence upon the mattersspecified. [Rule 66.]

§ 502.67 Proceedings under section3(a) of the Intercoastal ShippingAct, 1933.

(a)(1)(i) The term general rate increasemeans any change in rates, fares, orcharges which will (A) result in an in-crease in not less than 50 per centum ofthe total rate, fare, or charge items inthe tariffs per trade of any commoncarrier by water in intercoastal com-merce; and (B) directly result in an in-crease in gross revenue of such carrierfor the particular trade of not less than3 per centum.

(ii) The term general rate decreasemeans any change in rates, fares, orcharges which will (A) result in a de-crease in not less than 50 per centum ofthe total rate, fare, or charge items intariffs per trade of any common carrierby water in the intercoastal commerce;and (B) directly result in a decrease ingross revenue of such carrier for theparticular trade of not less than 3 percentum.

(2) No general rate increase or de-crease shall take effect before the closeof the sixtieth day after the day it isposted and filed with the Commission.A vessel operating common carrier(VOCC) shall file, under oath, concur-rently with any general rate increaseor decrease, testimony and exhibits ofsuch composition, scope and format


37


that they will serve as the VOCC’s en-tire direct case in the event the matteris set for formal investigation, to-gether with all underlying workpapersused in the preparation of the testi-mony and exhibits. The VOCC shallalso certify that copies of testimonyand exhibits and underlyingworkpapers have been filed simulta-neously with the attorney general ofevery noncontiguous State, Common-wealth, possession or Territory havingports in the relevant trade that areserved by the VOCC. The contents ofunderlying workpapers served on attor-neys general pursuant to this para-graph are to be considered confidentialand are not to be disclosed to membersof the public except to the extent spe-cifically authorized by an order of theCommission or a presiding officer. Acopy of the testimony and exhibitsshall be made available at every portin the trade at the offices of the VOCCor its agent during usual businesshours for inspection and copying byany person.

(3) Workpapers underlying financialand operating data filed in connectionwith proposed rate changes shall bemade available promptly by the carrierto all persons requesting them for in-spection and copying upon the submis-sion of the following certification,under oath, to the carrier:

Certification

I, (Name and title if applicable)llllll, of (Full name of company or en-tity) llllllll, having been dulysworn, certify that the underlyingworkpapers requested from (Name of carrier)llllllll, will be used solely in con-nection with protests related to and proceed-ings resulting from (Name of carrier)llllllll’s rates, fares or charges inthe llllllll trade and that their con-tents will not be disclosed to any person whohas not signed, under oath, a certification inthe form prescribed, which has been filedwith the Carrier, unless public disclosure isspecifically authorized by an order of theCommission or the presiding officer.

Signature: ——————————————————

Date: ————————————————————

Signed and Sworn to before me this ll dayof llllllll (month), lll (year).Notary Public: ———————————————

My Commission expires: ——————————

(4) Where a protest contains informa-tion obtained in confidence, it will beset out in a separate document, clearlymarked on the cover page ‘‘ContainsConfidential Information.’’ Failure toobserve this procedure will subject theprotest to rejection.

(5) Failure by the VOCC to meet theservice and filing requirements of para-graph (a)(2) of this section may resultin rejection of the tariff matter. Suchrejection will take place within threework days after the defect is discov-ered.

(b)(1) Any protest against a proposedgeneral rate increase or decrease madepursuant to section 3 of the Inter-coastal Shipping Act, 1933, may bemade by letter and shall be filed withthe Director, Bureau of Tariffs, andserved upon the tariff publishing offi-cer of the carrier pursuant to subpart Hof this part no later than thirty (30)days prior to the proposed changes, ex-cept that, if the due date for protestsfalls on a Saturday, Sunday or nationallegal holiday, such protest must befiled no later than the last businessday preceding the weekend or holiday.Persons filing protests pursuant to thissection shall be made parties to anydocketed proceeding involving thematter protested, provided that the is-sues raised in the protest are pertinentto the issues set forth in the order ofinvestigation. Protests shall include:

(i) Identification of the tariff in ques-tion;

(ii) Grounds for opposition to thechange;

(iii) Identification of any specificareas of the VOCC’s testimony, exhib-its, or underlying data that are in dis-pute and a statement of position oneach area in dispute (VOCC generalrate increases or decreases only);

(iv) Specific reasons why a hearing isnecessary to resolve the issues in dis-pute;

(v) Any requests for additional car-rier data;

(vi) Identification of any witnessesthat protestant would produce at ahearing, a summary of their testimonyand identification of documents thatprotestant would offer in evidence; and

(vii) A subscription and verification.(2) Protests against across-the-board

increases, as defined in § 514.2 of this


38

46 CFR Ch. IV (10–1–96 Edition)§ 502.67

chapter, and against other proposedchanges in tariffs filed on at least thir-ty (30) days’ notice, shall be filed andserved no later than twenty (20) daysprior to the proposed effective date ofthe change. The provisions of para-graph (b)(1) of this section relating tothe form and manner of filing protestsagainst a proposed general rate in-crease or decrease shall be applicableto protests against across-the-board in-creases and other proposed changes intariffs filed on at least thirty (30) days’notice. A protest is deemed filed on thedate it is received by the Commission.

(3) Protests against other proposedchanges in tariffs filed on less thanthirty (30) days’ notice shall be filedand served not later than 9 a.m. on thelast workday before the scheduled ef-fective date of the change. any protestmay be made by letter and shall befiled with the Director, Bureau of Tar-iffs, Certification and Licensing, andserved upon the tariff publishing offi-cer of the carrier in accordance withsubpart H of this part. Such protestshall identify the tariff in question andthe grounds for opposition to thechange as well as the relief sought bythe protestant. A protest is deemedfiled on the date it is received by theCommission.

(c) Replies to protests shall conformto the requirements of § 502.74.

(d)(1) In the event the general rateincrease or decrease of a VOCC is madesubject to a docketed proceeding:

(i) The VOCC shall serve, under oath,testimony and exhibits constituting itsdirect case, together with underlyingworkpapers and responses (includingobjections, if any) to protestants’ re-quests for additional carrier data, onall parties pursuant to subpart H ofthis part, and lodge copies of such tes-timony and exhibits with the presidingofficer, no later than seven (7) daysafter the Commission issues its orderof investigation in the docketed pro-ceeding; and

(ii) Hearing Counsel and all Protes-tants shall serve, under oath, testi-mony and exhibits constituting theirdirect cases on all parties pursuant tosubpart H of this part, and lodge copieswith the presiding officer, no laterthan fourteen (14) days after the Com-

mission issues its order of investiga-tion in the docketed proceeding.

(2) If other proposed tariff changesare made subject to a docketed pro-ceeding pursuant to section 3 of theIntercoastal Shipping Act, 1933, thecarrier shall serve, under oath, testi-mony and exhibits constituting its di-rect case, together with underlyingworkpapers, on all parties pursuant tosubpart H of this part, and lodge copiesof such testimony and exhibits withthe presiding officer, no later thanfourteen (14) days after the Commis-sion issues its order of investigation.Further procedural dates in such pro-ceeding shall be established by the pre-siding officer.

(e)(1) Subsequent to the issuance ofan order of investigation, the presidingofficer may direct all parties to par-ticipate in a prehearing conference toconsider:

(i) Simplification of issues;(ii) Identification of issues which can

be resolved readily on the basis of doc-uments, admissions of fact, or stipula-tions;

(iii) Identification of any issueswhich require evidentiary hearing;

(iv) Limitation of witnesses andareas of cross-examination, should anevidentiary hearing be necessary;

(v) Requests for subpoenas; and(vi) Other matters which may aid in

the disposition of the hearing, includ-ing but not limited to the exchange ofwritten testimony and exhibits.

(2) After considering the proceduralrecommendations of the parties, thepresiding officer shall limit the issuesto the extent possible and establish aprocedure for their resolution.

(3) The presiding officer shall, when-ever feasible, rule orally upon therecord on matters presented before himor her.

(f)(1) It shall be the duty of everyparty to file and serve a prehearingstatement on a date specified by thepresiding officer, but in any event nolater than the date of the prehearingconference.

(2) A prehearing statement shallstate the name of the party or partieson whose behalf it is presented andbriefly set forth:


39


(i) Identification of issues which canbe resolved readily on the basis of doc-uments, admissions of fact, or stipula-tions;

(ii) Identification of any issues whichrequire evidentiary hearing, togetherwith the reasons why these issues can-not be resolved readily on the basis ofdocuments, admissions of facts, stipu-lations or an alternative procedure;

(iii) Requests for cross-examinationof the direct written testimony of spec-ified witnesses, the subjects of suchcross-examination and the reasons whyalternatives to cross-examination arenot feasible;

(iv) Requests for additional, specifiedwitnesses and documents, togetherwith the reasons why the record wouldbe deficient in the absence of this evi-dence; and

(v) Procedural suggestions thatwould aid in the timely disposition ofthe proceeding.

(g) The provisions of this section aredesigned to enable the presiding officerto complete a hearing within sixty (60)days after the proposed effective dateof the tariff changes and submit an ini-tial decision to the Commission withinone hundred twenty (120) days pursuantto section 3(b) of the Intercoastal Ship-ping Act, 1933. The presiding officermay employ any other provision of theCommission’s Rules of Practice andProcedure, not inconsistent with thissection, in order to meet this objective.Exceptions to the decision of the pre-siding officer, filed pursuant to § 502.227shall be served no later than fifteen (15)days after date of service of the initialdecision. Replies thereto shall beserved no later than ten (10) days afterthe date of service of exceptions. In theabsence of exceptions, the decision ofthe presiding officer shall be finalwithin 30 days from the date of service,unless within that period, a determina-tion to review is made in accordancewith the procedures outlined in§ 502.227.

(h) Intervention by persons otherthan protestants ordinarily shall notbe granted. In the event intervention ofsuch persons is granted, the presidingofficer of the Commission may attachsuch conditions or limitations as are

deemed necessary to effectuate thepurpose of this section. [Rule 67.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984; 57 FR 44508, Sept. 28, 1992; 58 FR 58976,Nov. 5, 1993; 60 FR 27229, May 23, 1995]

§ 502.68 Declaratory orders and fee.

(a)(1) The Commission may, in itsdiscretion, issue a declaratory order toterminate a controversy or to removeuncertainty.

(2) Petitions for the issuance thereofshall: state clearly and concisely thecontroversy or uncertainty; name thepersons and cite the statutory author-ity involved; include a complete state-ment of the facts and grounds prompt-ing the petition, together with full dis-closure of petitioner’s interest; beserved upon all parties named therein;and conform to the requirements ofsubpart H of this part.

(3) Petitions shall be accompanied byremittance of a $162 filing fee.

(b) Petitions under this section shallbe limited to matters involving con-duct or activity regulated by the Com-mission under statutes administered bythe Commission. The procedures of thissection shall be invoked solely for thepurpose of obtaining declaratory rul-ings which will allow persons to actwithout peril upon their own view.Controversies involving an allegationof violation by another person of stat-utes administered by the Commission,for which coercive rulings such as pay-ment of reparation or cease and desistorders are sought, are not proper sub-jects of petitions under this section.Such matters must be adjudicated ei-ther by filing of a complaint under sec-tion 22 of the Shipping Act, 1916 or sec-tion 11 of the Shipping Act of 1984 and§ 502.62, or by filing of a petition for in-vestigation under § 502.69.

(c) Petitions under this section shallbe accompanied by the complete fac-tual and legal presentation of peti-tioner as to the desired resolution ofthe controversy or uncertainty, or adetailed explanation why such can onlybe developed through discovery or evi-dentiary hearing.

(d) Replies to the petition shall con-tain the complete factual and legalpresentation of the replying party as to


40

46 CFR Ch. IV (10–1–96 Edition)§ 502.69

the desired resolution, or a detailed ex-planation why such can only be devel-oped through discovery or evidentiaryhearing. Replies shall conform to therequirements of § 502.74 and shall beserved pursuant to subpart H of thispart.

(e) No additional submissions will bepermitted unless ordered or requestedby the Commission or the presiding of-ficer. If discovery or evidentiary hear-ing on the petition is deemed necessaryby the parties, such must be requestedin the petition or replies. Requestsshall state in detail the facts to be de-veloped, their relevance to the issues,and why discovery or hearing proce-dures are necessary to develop suchfacts.

(f)(1) A notice of filing of any peti-tion which meets the requirements ofthis section shall be published in theFEDERAL REGISTER. The notice will in-dicate the time for filing of replies tothe petition. If the controversy or un-certainty is one of general public inter-est, and not limited to specificallynamed persons, opportunity for replywill be given to all interested personsincluding the Commission’s Bureau ofEnforcement.

(2) In the case of petitions involvinga matter limited to specifically namedpersons, participation by persons notnamed therein will be permitted onlyupon grant of intervention by the Com-mission pursuant to § 502.72.

(3) Petitions for leave to interveneshall be submitted on or before thereply date and shall be accompanied byintervenor’s complete reply includingits factual and legal presentation inthe matter.

(g) Petitions for declaratory orderwhich conform to the requirements ofthis section will be referred to a formaldocket. Referral to a formal docket isnot to be construed as the exercise bythe Commission of its discretion toissue an order on the merits of the pe-tition. [Rule 68.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984; 59 FR 59170, Nov. 16, 1994; 61 FR 51233,Oct. 1, 1996]

§ 502.69 Petitions—general and fee.(a) Except when submitted in connec-

tion with a formal proceeding, allclaims for relief or other affirmative

action by the Commission, includingappeals from Commission staff action,except as otherwise provided in thispart, shall be by written petition,which shall state clearly and conciselythe petitioner’s grounds of interest inthe subject matter, the facts reliedupon and the relief sought, shall citeby appropriate reference the statutoryprovisions or other authority reliedupon for relief, shall be served upon allparties named therein, and shall con-form otherwise to the requirements ofsubpart H of this part. Replies theretoshall conform to the requirements of§ 502.74.

(b) Petitions shall be accompanied byremittance of a $162 filing fee. [Rule69.]

[49 FR 44369, Nov. 6, 1984, as amended at 52FR 4143, Feb. 10, 1987; 59 FR 59170, Nov. 16,1994]

§ 502.70 Amendments or supplementsto pleadings.

(a) Amendments or supplements toany pleadings will be permitted or re-jected, either in the discretion of theCommission if the case has not been as-signed to a presiding officer for hear-ing, or otherwise, in the discretion ofthe officer designated to conduct thehearing, except that after a case is as-signed for hearing, no amendment shallbe allowed which would broaden the is-sues, without opportunity to reply tosuch amended pleading and to preparefor the broadened issues. The presidingofficer may direct a party to state itscase more fully and in more detail byway of amendment.

(b) A response to an amended plead-ing must be filed and served in con-formity with the requirements of sub-part H of this part and § 502.74, unlessthe Commission or the presiding officerdirects otherwise. Amendments or sup-plements allowed prior to hearing willbe served in the same manner as theoriginal pleading, except that the pre-siding officer may authorize the serv-ice of amended complaints directly bythe parties rather than by the Sec-retary of the Commission.

(c) Whenever by the rules in this parta pleading is required to be verified,


41


the amendment or supplement shallalso be verified. [Rule 70.]


§ 502.71 Motions for more definitestatement.

If a pleading (including a complaintor counter-complaint filed pursuant to§ 502.62 or § 502.64) to which a responsivepleading is permitted is so vague orambiguous that a party cannot reason-ably be required to frame a responsivepleading, the party may move for amore definite statement before inter-posing a responsive pleading. The mo-tion shall be filed within 15 days of thepleading and shall point out the defectscomplained of and the details desired.If the motion is granted and the orderof the presiding officer is not obeyedwithin 10 days after service of the orderor within such time as the presiding of-ficer may fix, the presiding officer maystrike the pleading to which the mo-tion was directed or make such orderas is deemed just. If the motion is dis-allowed, the time for responding to thepleading shall be extended to a date 10days after service of the notice of dis-allowance.

[58 FR 27210, May 7, 1993]

§ 502.72 Petition for leave to intervene.(a) A petition for leave to intervene

may be filed in any proceeding andshall be served on existing parties bythe petitioner pursuant to subpart H ofthis part. An additional fifteen (15) cop-ies of the petition shall be filed withthe Secretary for the use of the Com-mission. Upon request, the Commissionwill furnish a service list to any mem-ber of the public pursuant to part 503 ofthis chapter. The petition shall setforth the grounds for the proposedintervention and the interest and posi-tion of the petitioner in the proceedingand shall comply with the other appli-cable provisions of subpart H of thispart, and if affirmative relief is sought,the basis for such relief. Such petitionshall also indicate the nature and ex-tent of the participation sought, e.g.,the use of discovery, presentation ofevidence and examination of witnesses.

(b)(1) Petitions for leave to interveneas a matter of right will only be grant-

ed upon a clear and convincing showingthat:

(i) The petitioner has a substantialinterest relating to the matter which isthe subject of the proceeding warrant-ing intervention; and

(ii) The proceeding may, as a prac-tical matter, materially affect the pe-titioner’s interest; and

(iii) The interest is not adequatelyrepresented by existing parties to theproceeding.

(2) Petitions for intervention as amatter of Commission discretion maybe granted only upon a showing that:

(i) A common issue of law or fact ex-ists between the petitioner’s interestsand the subject matter of the proceed-ing; and

(ii) Petitioner’s intervention will notunduly delay or broaden the scope ofthe proceeding, prejudice the adjudica-tion of the rights of or be duplicative ofpositions of any existing party; and

(iii) The petitioner’s participationmay reasonably be expected to assist inthe development of a sound record.

(3) The timeliness of the petition willalso be considered in determiningwhether a petition will be grantedunder paragraphs (b)(1) or (b)(2) of thissection. If filed after hearings havebeen closed, a petition will not ordi-narily be granted.

(c) In the interests of: (1) Restrictingirrelevant, duplicative, or repetitivediscovery, evidence or arguments; (2)having common interests representedby a spokesperson; and (3) retaining au-thority to determine priorities andcontrol the course of the proceeding,the presiding officer, in his or her dis-cretion, may impose reasonable limita-tions on an intervenor’s participation,e.g., the filing of briefs, presentation ofevidence on selected factual issues, ororal argument on some or all of the is-sues.

(d) Absent good cause shown, any in-tervenor desiring to utilize the proce-dures provided by subpart L must com-mence doing so no later than fifteen(15) days after its petition for leave tointervene has been granted. If the peti-tion is filed later than thirty (30) daysafter the date of publication in theFEDERAL REGISTER of the Commission’sOrder instituting the proceeding or no-tice of complaint filed, petitioner will


42

46 CFR Ch. IV (10–1–96 Edition)§ 502.73

be deemed to have waived its right toutilize such procedures, unless goodcause is shown for the failure to filethe petition within the 30-day period.The use of subpart L procedures by anintervenor whose petition was filed be-yond such 30-day period will in noevent be allowed, if, in the opinion ofthe presiding officer, such use will re-sult in delaying the proceeding unduly.

(e) If intervention is granted beforeor at a prehearing conference convenedfor the purpose of considering mattersrelating to discovery, the intervenor’sdiscovery matters may also be consid-ered at that time, and may be limitedunder the provisions of paragraph (c) ofthis section.

(f) A form of petition for leave to in-tervene is set forth in Exhibit No. 3 tothis subpart. [Rule 72.]

[49 FR 44369, Nov. 6, 1984, as amended at 52FR 4143, Feb. 10, 1987]

§ 502.73 Motions.(a) In any docketed proceeding, an

application or request for an order orruling not otherwise specifically pro-vided for in this part shall be by mo-tion. After the assignment of a presid-ing officer to a proceeding and beforethe issuance of his or her recommendedor initial decision, all motions shall beaddressed to and ruled upon by the pre-siding officer unless the subject matterof the motion is beyond his or her au-thority, in which event the mattershall be referred to the Commission. Ifthe proceeding is not before the presid-ing officer, motions shall be designatedas ‘‘petitions’’ and shall be addressedto and passed upon by the Commission.

(b) Motions shall be in writing, ex-cept that a motion made at a hearingshall be sufficient if stated orally uponthe record, unless the presiding officerdirects that it be reduced to writing.

(c) All written motions shall stateclearly and concisely the purpose ofand the relief sought by the motion,the statutory or principal authority re-lied upon, and the facts claimed to con-stitute the grounds requiring the reliefrequested; and shall conform with therequirements of subpart H of this part.

(d) Oral argument upon a written mo-tion may be permitted at the discre-tion of the presiding officer or theCommission, as the case may be.

(e) A repetitious motion will not beentertained. [Rule 73.]

§ 502.74 Replies to pleadings, motions,applications, etc.

(a)(1) Except as provided under sub-part V of this part, a reply to a reply isnot permitted.

(2) Except as otherwise provided re-specting answers (§ 502.64), shortenedprocedure (subpart K of this part),briefs (§ 502.221), exceptions (§ 502.227),replies to petitions for attorney feesunder the Equal Access to Justice Act(§ 502.503(b)(1)), and the documentsspecified in paragraph (b) of this sec-tion, any party may file and serve areply to any written motion, pleading,petition, application, etc., permittedunder this part within fifteen (15) daysafter the date of service thereof, unlessa shorter period is fixed under § 502.103.

(b) When time permits, replies alsomay be filed to protests seeking sus-pension of tariffs (§ 502.67), applicationsfor enlargement of time and postpone-ment of hearing (subpart G of thispart), and motions to take depositions(§ 502.201).

(c) Replies shall be in writing, shallbe verified if verification of originalpleading is required, shall be so drawnas to fully and completely advise theparties and the Commission as to thenature of the defense, shall admit ordeny specifically and in detail eachmaterial allegation of the pleading an-swered, shall state clearly and con-cisely the facts and matters of law re-lied upon, and shall conform to the re-quirements of subpart H of this part.[Rule 74.]


§ 502.75 Proceedings involving assess-ment agreements.

(a) In complaint proceedings involv-ing assessment agreements filed underthe fifth paragraph of section 15 of theShipping Act, 1916, or section 5(d) ofthe Shipping Act of 1984, the Notice ofFiling of Complaint and Assignmentwill specify a date before which the ini-tial decision will be issued, which datewill be not more than eight monthsfrom the date the complaint was filed.

(b) Any party to a proceeding con-ducted under this section who desires


43

Federal Maritime Commission Pt. 502, Subpt. E, Exh. 1

to utilize the prehearing discovery pro-cedures provided by subpart L of thispart shall commence doing so at thetime it files its initial pleading, i.e.,complaint, answer or petition for leaveto intervene. Discovery matters accom-panying complaints shall be filed withthe Secretary of the Commission forservice pursuant to § 502.113. Answers orobjections to discovery requests shallbe subject to the normal provisions setforth in subpart L.

(c) Exceptions to the decision of thepresiding officer, filed pursuant to§ 502.227, shall be filed and served nolater than fifteen (15) days after date ofservice of the initial decision. Repliesthereto shall be filed and served nolater than fifteen (15) days after date ofservice of exceptions. In the absence ofexceptions, the decision of the presid-ing officer shall be final within thirty(30) days from the date of service, un-less within that period, a determina-tion to review is made in accordancewith the procedures outlined in§ 502.227. [Rule 75.]

§ 502.76 Brief of an amicus curiae.(a) A brief of an amicus curiae may

be filed only by leave of the Commis-sion or the presiding officer granted onmotion with notice to the parties, or atthe request of the Commission or thepresiding officer, except that leaveshall not be required when the brief ispresented by the United States or anyagency or officer of the United States.The brief may be conditionally filedwith the motion for leave. A brief of anamicus curiae shall be limited to ques-tions of law or policy.

(b) A motion for leave to file an ami-cus brief shall identify the interest ofthe applicant and shall state the rea-sons why such a brief is desirable.

(c) Except as otherwise permitted bythe Commission or the presiding offi-cer, an amicus curiae shall file its briefwithin the time allowed the partywhose position as to affirmance or re-versal the amicus brief will support.The Commisson or the presiding officershall grant leave for a later filing onlyfor cause shown, in which event the pe-riod within which an opposing partymay answer shall be specified.

(d) A motion of an amicus curiae toparticipate in oral argument will be

granted only in accordance with the re-quirements of § 502.241. [Rule 76.]

[52 FR 4143, Feb. 10, 1987]

EXHIBIT NO. 1 TO SUBPART E [§ 502.62]—COMPLAINT FORM AND INFORMATIONCHECKLIST

Before the Federal Maritime Commission

Complaint

—————— v. —————— [Insert without ab-breviation exact and complete name ofparty or parties respondent]

I. The complainant is [State in this para-graph whether complainant is an associa-tion, a corporation, firm, or partnership andthe names of the individuals composing thesame. State also the nature and principalplace of business].

II. The respondent is [State in this para-graph whether respondent is an association,a corporation, firm, or partnership and thenames of the individuals composing thesame. State also the nature and principalplace of business].

III. Allegation of jurisdiction. [State inthis paragraph a synopsis of the statutorybases for claim(s)].

IV. That [State in this or subsequent para-graphs to be lettered ‘‘A’’, ‘‘B’’, etc., thematter or matters complained of. If rates areinvolved, name each rate, fare, charge, clas-sification, regulation, or practice, the law-fulness of which is challenged].

V. That by reason of the facts stated in theforegoing paragraphs, complainant has been(and is being) subject to injury as a direct re-sult of the violations by respondent of sec-tions ——— [State in this paragraph thecausal connection between the alleged illegalacts of respondent and the claimed injury tocomplainant, with all necessary statutorysections relied upon].

VI. That complainant has been injured inthe following manner: To its damage in thesum of $———.

VII. Wherefore complainant prays that re-spondent be required to answer the chargesherein; that after due hearing, an order bemade commanding said respondent (and eachof them): to cease and desist from the afore-said violations of said act(s); to establish andput in force such practices as the Commis-sion determines to be lawful and reasonable;to pay to said complainant by way of repara-tions for the unlawful conduct hereinabovedescribed the sum of $———, with interestand attorney’s fees or such other sum as theCommission may determine to be proper asan award of reparation; and that such otherand further order or orders be made as theCommission determines to be proper in thepremises.Dated at ———, this —— day of ———, 19—.


44

46 CFR Ch. IV (10–1–96 Edition)Pt. 502, Subpt. E, Exh. 1

————————————————————————[Complainant’s signature]————————————————————————[Office and post office address]————————————————————————[Signature or agent or attorney of complain-ant]————————————————————————[Post office address]

Verification [See § 502.112]

State of ———, County of ———, ss: ———,——— being first duly sworn on oath deposesand says that he (she) is————————————————————————[The complainant, or, if a firm, association,or corporation, state the capacity of the affi-ant]and is the person who signed the foregoingcomplaint; that he (she) has read the com-plaint and that the facts stated therein,upon information received from others, affi-ant believes to be true.

Subscribed and sworn to before me, a no-tary public in and for the State of ———,County of ——— this ——— day ———, A.D.19—.[Seal] ————————————————————(Notary Public)My Commission expires ————.

Information To Assist in Filing FormalComplaint

General

Formal Docket Complaint procedures usu-ally involve an evidentiary hearing on dis-puted facts. Where no evidentiary hearing ondisputed facts is necessary and where all par-ties agree to the use of different procedures,a complaint may be processed under subpartK [Shortened Procedure] or subpart S [Infor-mal Docket for a claim of $10,000 or less]. Anapplication for refund or waiver of collectionof freight charges due to tariff error shouldbe filed pursuant to § 502.92 and Exhibit No. 1to subpart F. Consider also the feasibilty offiling a Petition for Declaratory Order under§ 502.68.

Under the Shipping Act of 1984 [foreigncommerce], the complaint must be filedwithin three (3) years from the time thecause of action accrues and may be broughtagainst any person alleged to have violatedthe 1984 Act to the injury of complainant.

Under the Shipping Act, 1916 and the Inter-coastal Shipping Act, 1933 [domestic com-merce], the complaint must be filed withintwo (2) years from the time the cause of ac-tion accrues and may be brought onlyagainst a ‘‘person subject to the Act’’, e.g., acommon carrier, terminal operator orfreight forwarder.

Because of the limitation periods, a com-plaint is deemed to be filed only when it is

physically received at the Commission. [See§ 502.114]

The format of exhibit No. 1 to subpart Emust be followed and a verification must beincluded. (See §§ 502.21–502.32, 502.62 and502.112.) The complaint must also fully de-scribe the alleged violations of the specificsection(s) of the shipping statute(s) involvedand how complainant is or was directly in-jured as a result. An original and fifteen cop-ies, plus a further number of copies sufficientfor service upon each named respondentmust be filed and the Commission will servethe other parties. [See §§ 502.113 and 502.118]

In addition to subpart E, some other im-portant rules are: § 502.2 (mailing address;hours); § 502.7 (documents in foreign lan-guage); § 502.23 (Notice of Apperance); § 502.41(parties; how designated); § 502.44 (necessaryand proper parties to certain complaint pro-ceedings); and subpart H (form, executionand service of documents).

Checklist of Specific Information

The following checklist sets forth items ofinformation which are pertinent in casessubmitted to the Commission pursuant tothe regulatory provisions of the shippingstatutes. The list is not intended to be inclu-sive, nor does it indicate all of the essentialallegations which may be material in spe-cific cases.

1. Identity of complainant; if an individual,complainant’s residence; if a partnership,name of partners, business and principalplace thereof; if a corporation, name, state ofincorporation, and principal place of busi-ness. The same information with respect torespondents, intervenors, or others who be-come parties is necessary.

2. Description of commodity involved, withport of origin, destination port, weight, con-signor and consignee of shipment(s), dateshipped from loading port, and date receivedat discharge port.

3. Rate charged, with tariff authority forsame, and any rule or regulation applicablethereto; the charges collected and fromwhom.

4. Route of shipment, including any trans-shipment; bill of lading reference.

5. Date of delivery or tender of delivery ofeach shipment.

6. Where the rate is challenged and com-parisons are made with rates on other com-modities, the form, packing, density, suscep-tibility to damage, tendency to contaminateother freight, value, volume of movement,competitive situation, and all matters relat-ing to the cost of loading, unloading, andotherwise handling of respective commod-ities.

7. If comparisons are made between thechallenged rates and rates on other routes,the allegation showing similarity of serviceshould include at least respective distances,


45


volumes of movement, cost of handling, andcompetitive conditions.

8. History of rate with reasons for previousincreases or decreases of same.

9. When the complaint alleges undue preju-dice or preference, the complaint should in-dicate what manner of undue prejudice orpreference is involved, and whether to a par-ticular person, locality, or description oftraffic; how the preference or discriminationresulted and the manner in which the re-spondents are responsible for the same; andhow complainant is damaged by the preju-dice or preference, in loss of sales or other-wise.

10. Care should be exercised to differen-tiate between the measure of damages re-quired in cases where prejudice or preferenceis charged, where the illegality of rates ischarged and other situations.

11. Where a filed agreement or conductunder the agreement is challenged, all nec-essary provisions of the shipping statute in-volved must be specifically cited, showing indetail how a section was violated and howthe conduct or agreement injures complain-ant. The complaint should be thorough andclear as to all relief complainant is request-ing.

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984, as amended at 55 FR 28400, July 11, 1990]

EXHIBIT NO. 2 TO SUBPART E [§ 502.64]—ANSWER TO COMPLAINT


Answer

—————— v. ——————[Complainant] [Respondent]Docket No. ————

The above-named respondent, for answer tothe complaint in this proceeding, states:

I. [State in this and subsequent paragraphsto be numbered II, III, etc., appropriate andresponsive admissions, denials, and aver-ments, specifically answering the complaint,paragraph by paragraph.]

Wherefore respondent prays that the com-plaint in this proceeding be dismissed.

————————————————————————[Name of respondent]

By ——————————————————————

[Title of Officer]

————————————————————————[Office and post office address]

————————————————————————[Signature of attorney or agent]

————————————————————————[Post office address]

Date ——————, 19–.

Verification

[See form for verification of complaint inExhibit No. 1 to this subpart and § 502.112.]

Certificate of Service

[See § 502.114.]

EXHIBIT NO. 3 TO SUBPART E [§ 502.72]—PETITION FOR LEAVE TO INTERVENE


Petition for Leave To Intervene

——— v. ——— Docket No. ———.

Your petitioner, ——————, respectfullyrepresents that he (she) has an interest inthe matters in controversy in the above-enti-tled proceeding and desires to intervene inand become a party to said proceeding, andfor grounds of the proposed interventionsays:

I. That petitioner is [State whether an as-sociation, corporation, firm, or partnership,etc., as in Exhibit No. 1 to this subpart, andnature and principal place of business].

II. [Here set out specifically position andinterest of petitioner in the above-entitledproceeding and other essential averments inaccordance with Rule 72 (46 CFR 502.72).]

Wherefore said —————— requests leaveto intervene and be treated as a party heretowith the right to have notice of and appearat the taking of testimony, produce andcross-examine witnesses, and be heard in per-son or by counsel upon brief and at the oralargument, if oral argument is granted.

[If affirmative relief is sought, insert ap-propriate request here.]

Dated at ———, this —— day of ———, 19—.

————————————————————————Petitioner’s signature]

————————————————————————[Office and post office address]

————————————————————————[Signature of agent or attorney of peti-tioner]

————————————————————————[Post office address]

Verification and Certificate of Service

[See Exhibits Nos. 1 and 2 to this subpart.]

Subpart F—Settlement; PrehearingProcedure

§ 502.91 Opportunity for informal set-tlement.

(a) Parties are encouraged to makeuse of all the procedures of this partwhich are designed to simplify or avoidformal litigation, and to assist the par-ties in reaching settlements whenever


46

46 CFR Ch. IV (10–1–96 Edition)§ 502.92

it appears that a particular procedurewould be helpful.

(b) Where time, the nature of the pro-ceeding, and the public interest permit,all interested parties shall have the op-portunity for the submission and con-sideration of facts, argument, offers ofsettlement, or proposal of adjustment,without prejudice to the rights of theparties.

(c) No stipulation, offer, or proposalshall be admissible in evidence over theobjection of any party in any hearingon the matter. [Rule 91.]

(d) Any party may request, or thepresiding officer may suggest, that amediator or settlement judge be ap-pointed to assist the parties in reach-ing a settlement. If such a request orsuggestion is made and is not opposed,the presiding judge will advise theChief Administrative Law Judge whomay appoint a mediator or settlementjudge who is acceptable to all parties.The mediator or settlement judge shallconvene and preside over conferencesand settlement negotiations and shallreport to the Chief Administrative LawJudge, within the time prescribed bythe Chief Administrative Law Judge,on the results of settlement discussionswith appropriate recommendations asto future proceedings. If settlement isreached, it shall be submitted to thepresiding judge who shall issue an ap-propriate decision or ruling.


§ 502.92 Special docket applicationsand fee.

(a)(1) A common carrier or a shippermay file an application for permissionto refund or waive collection of a por-tion of freight charges where it appearsthat there is (i) an error in the tariff ofa clerical or administrative nature or(ii) an error due to inadvertence in fail-ing to file a new tariff. Such refund orwaiver must not result in discrimina-tion among shippers, ports, or carriers.

(2) When the application is filed by acarrier, the Commission must have re-ceived prior to the filing of the applica-tion a new tariff which sets forth therate on which refund or waiver wouldbe based.

(3)(i) The application for refund orwaiver must be filed with the Commis-

sion within one hundred eighty (180)days from the date of shipment andserved upon other persons involvedpursuant to subpart H of this part.When a rate published in a conferencetariff is involved, the carrier or shippermust serve a copy of the application onthe conference and so certify in accord-ance with Rule 117 (46 CFR 502.117) tothat service in the application. A ship-per must also make a similar serviceand certification with respect to thecommon carrier. An application is filedwhen it is placed in the mail, deliveredto a courier, or, if delivered by anothermethod, when it is received by theCommission. Filings by mail or couriermust include a certification as to dateof mailing or delivery to the courier.

(ii) The application for refund orwaiver must be accompanied by remit-tance of an $86 filing fee.

(iii) Date of shipment shall mean thedate of sailing of the vessel from theport at which the cargo was loaded.

(4) By filing, the applicant(s) agreesthat:

(i) If permission is granted by theCommission:

(A) An appropriate notice will bepublished in the tariff; or

(B) Other steps will be taken as theCommission may require which givenotice of the rate on which such refundor waiver would be based; and

(C) Additional refunds or waiversshall be made with respect to othershipments in the manner prescribed bythe Commission’s order approving theapplication.

(ii) If the application is denied, othersteps will be taken as the Commissionmay require.

(5) Application for refund or waivershall be made in accordance with Ex-hibit No. 1 to this subpart. Any appli-cation which does not furnish the in-formation required by the prescribedform or otherwise comply with thisrule may be returned to the applicantby the Secretary without prejudice toresubmission within the 180-day limita-tion period.

(b) Common carriers by water ininterstate or intercoastal commerce,or conferences of such carriers, may


47


file application for permission to re-fund a portion of freight charges col-lected from a shipper or waive collec-tion of a portion of freight chargesfrom a shipper. All such applicationsshall be filed within the 2-year statu-tory period referred to in § 502.63, andshall be made in accordance with Ex-hibit No. 1 to this subpart. Such appli-cations will be considered the equiva-lent of a complaint and answer theretoadmitting the facts complained of. Ifallowed, an order for payment or waiv-er will be issued by the Commission.

(c) Applications under paragraphs (a)and (b) of this section shall be submit-ted in an original and one (1) copy tothe Office of the Secretary, FederalMaritime Commission, Washington, DC20573–0001. Each application shall be ac-knowledged with a reference to the as-signed docket number and referred fordecision, either to a Special DocketsOfficer or to the Office of Administra-tive Law Judges, at the discretion ofthe Secretary. The deciding officialmay, in his or her discretion, requirethe submission of additional informa-tion. Formal proceedings as describedin other rules of this part need not beconducted. The deciding official shallissue an initial determination to whichthe provisions of § 502.227 shall be appli-cable. If the application is granted, theinitial determination or, as may other-wise be applicable, the final decision ofthe Commission shall describe the con-tent of the appropriate notice if re-quired to be published, and shall des-ignate the tariff in which it is to ap-pear, or other steps that are requiredto be taken which give notice of therate on which such refund or waiver isto be based. [Rule 92].

[49 FR 44369, Nov. 6, 1984, as amended at 53FR 27861, July 25, 1988; 57 FR 3026, Jan. 27,1992; 59 FR 59170, Nov. 16, 1994]

§ 502.94 Prehearing conference.(a)(1) Prior to any hearing, the Com-

mission or presiding officer may directall interested parties, by written no-tice, to attend one or more prehearingconferences for the purpose of consider-ing any settlement under § 502.91, for-mulating the issues in the proceedingand determining other matters to aidin its disposition. In addition to any of-fers of settlement or proposals of ad-

justment, there may be considered thefollowing:

(i) Simplification of the issues;(ii) The necessity or desirability of

amendments to the pleadings;(iii) The possibility of obtaining ad-

missions of fact and of documentswhich will avoid unnecessary proof;

(iv) Limitation on the number of wit-nesses;

(v) The procedure at the hearing;(vi) The distribution to the parties

prior to the hearing of written testi-mony and exhibits;

(vii) Consolidation of the examina-tion of witnesses by counsel;

(viii) Such other matters as may aidin the disposition of the proceeding.

(2) The presiding officer may require,prior to the hearing, exchange of exhib-its and any other material which mayexpedite the hearing. He or she shallassume the responsibility of accom-plishing the purposes of the notice ofprehearing conference so far as thismay be possible without prejudice tothe rights of any party.

(3) The presiding officer shall ruleupon all matters presented for deci-sion, orally upon the record when fea-sible, or by subsequent ruling in writ-ing. If a party determines that a rulingmade orally does not cover fully theissue presented, or is unclear, suchparty may petition for a further rulingthereon within ten (10) days after re-ceipt of the transcript.

(b) In any proceeding under the rulesin this part, the presiding officer maycall the parties together for an infor-mal conference prior to the taking oftestimony, or may recess the hearingfor such a conference, with a view tocarrying out the purposes of this sec-tion. [Rule 94.]

(c) At any prehearing conference,consideration shall be given to whetherthe use of alternative means of disputeresolution would be appropriate or use-ful for the disposition of the proceed-ing.


§ 502.95 Prehearing statements.(a) Unless waiver is granted by the

presiding officer, it shall be the duty ofall parties to a proceeding to prepare astatement or statements at a time and


48

46 CFR Ch. IV (10–1–96 Edition)Pt. 502, Subpt. F, Exh. 1

in the manner to be established by thepresiding officer provided that therehas been reasonable opportunity fordiscovery. To the extent possible, jointstatements should be prepared.

(b) A prehearing statement shallstate the name of the party or partieson whose behalf it is presented andbriefly set forth the following matters,unless otherwise ordered by the presid-ing officer:

(1) Issues involved in the proceeding.(2) Facts stipulated pursuant to the

procedures together with a statementthat the party or parties have commu-nicated or conferred in a good faith ef-fort to reach stipulation to the fullestextent possible.

(3) Facts in dispute.(4) Witnesses and exhibits by which

disputed facts will be litigated.(5) A brief statement of applicable

law.(6) The conclusion to be drawn.(7) Suggested time and location of

hearing and estimated time requiredfor presentation of the party’s or par-ties’ case.

(8) Any appropriate comments, sug-gestions or information which mightassist the parties in preparing for thehearing or otherwise aid in the disposi-tion of the proceeding.

(c) The presiding officer may, forgood cause shown, permit a party to in-troduce facts or argue points of lawoutside the scope of the facts and lawoutlined in the prehearing statement.Failure to file a prehearing statement,unless waiver has been granted by thepresiding officer, may result in dismis-sal of a party from the proceeding, dis-missal of a complaint, judgmentagainst respondents, or imposition ofsuch other sanctions as may be appro-priate under the circumstances.

(d) Following the submission of pre-hearing statements, the presiding offi-cer may, upon motion or otherwise,convene a prehearing conference forthe purpose of further narrowing issuesand limiting the scope of the hearingif, in his or her opinion, the prehearingstatements indicate lack of dispute ofmaterial fact not previously acknowl-edged by the parties or lack of legiti-mate need for cross-examination and isauthorized to issue appropriate orders

consistent with the purposes stated inthis section. [Rule 95.]

EXHIBIT NO. 1 TO SUBPART F

[§ 502.92]

APPLICATION FOR REFUND OF OR WAIVER FORFREIGHT CHARGES DUE TO TARIFF ERROR

Federal Maritime Commission Special Dock-et No. ———

Amount of Freight Charges involved in re-quest ———

Application of [Name of carrier, or (ifunder the 1984 Act) shipper] for the benefit of[Name of person who paid or is responsiblefor payment of freight charges].

1. Shipment(s). Here fully describe:(a) Commodity [according to tariff descrip-

tion].(b) Number of shipments.(c) Weight or measurement of individual

shipment, as well as, all shipments.(d) Date(s) of shipment(s), i.e., sailing(s)

[furnish supporting evidence].(e) Shipper and place of origin.(f) Consignee, place of destination and

routing of shipment(s).(g) Name of carrier and date shown on bill

of lading [furnish legible copies of bill(s) oflading].

(h) Names of participating ocean carrier(s).(i) Name(s) of vessel(s) involved in car-

riage.(j) Amount of freight charges actually col-

lected [furnish legible copies of rated bill(s)of lading or freight bill(s), as appropriate]broken down (i) per shipment, (ii) in the ag-gregate, (iii) by whom paid, (iv) who is re-sponsible for payment if different, and (v)date(s) of collection.

(k) Rate applicable at time of shipment[furnish legible copies of tariff page(s)].

(l) Rate sought to be applied [furnish leg-ible copies of tariff page(s)].

(m) Amount of freight charges at ratesought to be applied, per shipment and in theaggregate.

(n) Amount of freight charges sought to be(refunded) (waived), per shipment and in theaggregate.

2. Furnish docket numbers of other specialdocket applications or decided or pendingformal proceedings involving the same ratesituations.

3. Furnish any information or evidence asto whether grant of the application will re-sult in discrimination among shippers, portsor carriers.

4. State whether there are shipments ofother shippers of the same commodity which(i) moved via the carrier(s) or conference in-volved in this application during the periodof time beginning on the date the tariffomitting the intended rate become effectiveor on the date the intended rate absent the


49


mistake would have became effective andending on the day before the effective date ofthe conforming tariff, and (ii) moved on thesame voyage(s) of the vessel(s) carrying theshipment(s) described in No. 1, above.

5. Fully explain the basis for the applica-tion, i.e., the clerical or administrative erroror error due to inadvertence, or reasons whyfreight charges collected are thought to beunlawful (domestic commerce) showing whythe application should be granted. Furnishaffidavits, if appropriate, and legible copiesof all supporting documents. If the error isdue to inadvertence, specify the date whenthe carrier and/or conference intended oragreed to file a new tariff.[Here set forth Name of Applicant, Signature

of Authorized Person, Typed or PrintedName of Person, Title of Person and Date]

State of ——————, County of ——————.ss:

I, ——————, on oath declare that I am——— of the above-named applicant, that Ihave read this application and know its con-tents, and that they are true.

Subscribed and sworn to before me, a no-tary public in and for the State of ———,County of ———, this —— day of ———, A.D.19—.(Seal) ————————————————————Notary PublicMy Commission expires ———.

Affidavit of Carrier(s)

[Here, as applicable, set forth same type ofaffidavit(s) and notarization(s) as set forthon page 2 of this exhibit for carrier, for anyother water carrier participating in thetransportation under a joint through rate.]

Certificate of Mailing

I certify that the date shown below is thedate of mailing [or date of delivery to cou-rier] of the original and three (3) copies ofthis application to the Secretary, FederalMaritime Commission, Washington, D.C.,20573.

Dated at ———, this —— day of ———, 19—.

[Signature] ——————————————.

For ———.

[49 FR 44369, Nov. 6, 1984, as amended at 52FR 4144, Feb. 10, 1987; 53 FR 27861, July 25,1988]

Subpart G—Time

§ 502.101 Computation.In computing any period of time

under the rules in this part, the timebegins with the day following the act,event, or default, and includes the lastday of the period, unless it is a Satur-

day, Sunday, or national legal holiday,in which event the period runs untilthe end of the next day which is not aSaturday, Sunday, or national legalholiday. When the period of time pre-scribed or allowed is less than seven (7)days, intermediate Saturdays, Sun-days, or national legal holidays shallbe excluded from the computation.[Rule 101.]

§ 502.102 Enlargement of time to filedocuments.

Motions for enlargement of time forthe filing of any pleading or other doc-ument, or in connection with the pro-cedures of subpart L of this part, shallset forth the reasons for the motion.Such motions will be granted onlyunder exceptional circumstances dulydemonstrated in the request. Such mo-tions shall conform to the require-ments of subpart H of this part, exceptas to service if they show that the par-ties have received actual notice of themotion; and in relation to briefs, ex-ceptions, and replies to exceptions,such motions shall conform to the fur-ther provisions of §§ 502.222 and 502.227.Upon motion made after the expirationof the specified period, the filing maybe permitted where reasonable groundsare found for the failure to file. Repliesto such motions shall conform to therequirements of § 502.74. [Rule 102.]

§ 502.103 Reduction of time to file doc-uments.

Except as otherwise provided by lawand for good cause, the Commission,with respect to matters pending beforeit, and the presiding officer, with re-spect to matters pending before him orher, may reduce any time limit pre-scribed in the rules in this part. [Rule103.]

§ 502.104 Postponement of hearing.Motions for postponement of any

hearing date shall set forth the reasonsfor the motion, and shall conform tothe requirements of subpart H of thispart, except as to service if they showthat parties have received such actualnotice of motion. Such motions will begranted only if found necessary to pre-vent substantial delay, expense, det-riment to the public interest or undueprejudice to a party. Replies to such


50

46 CFR Ch. IV (10–1–96 Edition)§ 502.105

motions shall conform to the require-ments of § 502.74. [Rule 104.]

§ 502.105 Waiver of rules governing en-largements of time and postpone-ments of hearings.

The Commission, the presiding offi-cer, or the Chief Administrative LawJudge may waive the requirements of§§ 502.102 and 502.104, as to replies topleadings, etc., to motions for enlarge-ment of time or motions to postpone ahearing, and may rule ex parte on suchrequests. Requests for enlargement oftime or motions to postpone or cancela prehearing conference or hearingmust be received, whether orally or inwriting, at least five (5) days before thescheduled date. Except for good causeshown, failure to meet this require-ment may result in summary rejectionof the request. [Rule 105.]

Subpart H—Form, Execution, andService of Documents

§ 502.111 Form and appearance of doc-uments filed with Commission.

(a) All papers to be filed under therules in this part may be reproduced byprinting or by any other process, pro-vided the copies are clear and legible,shall be dated, the original signed inink, show the docket description andtitle of the proceeding, and show thetitle, if any, and address of the signer.If typewritten, the impression shall beon only one side of the paper and shallbe double spaced except thatquotations shall be single spaced andindented. Documents not printed, ex-cept correspondence and exhibits,should be on strong, durable paper andshall be not more than 81⁄2 inches wideand 12 inches long, with a left handmargin 11⁄2 inches wide. Printed docu-ments shall be printed in clear type(never smaller than small pica or 11-point type) adequately leaded, and thepaper shall be opaque and unglazed.[Rule 111.]

(b) Filings by facsimile will not beaccepted, except for the purpose ofmeeting filing deadlines of protestsfiled pursuant to § 502.67 or repliesthereto, in which case the original andrequired copies must also be certifiedas being deposited in the mail or deliv-ered to a courier on or before the dead-

line. Photocopies of facsimile trans-missions of signature pages on otherfilings will be tentatively accepted forthe purpose of meeting filing deadlinespending receipt of the original withinseven working days. Use of photocopiesof facsimile transmissions in exhibitsto part 502 filings is permitted.


§ 502.112 Subscription and verificationof documents.

(a) If a party is represented by an at-torney or other person qualified topractice before the Commission underthe rules in this part, each pleading,document or other paper of such partyfiled with the Commission shall besigned by at least one person of recordadmitted to practice before the Com-mission in his or her individual name,whose address shall be stated. Exceptwhen otherwise specifically providedby rule or statute, such pleading, docu-ment or paper need not be verified oraccompanied by affidavit. The signa-ture of a person admitted or qualifiedto practice before the Commission con-stitutes a certificate by the signer thatthe signer has read the pleading, docu-ment or paper; that the signer is au-thorized to file it; that to the best ofthe signer’s knowledge, information,and belief formed after reasonable in-quiry the filing is well grounded in factand is warranted by existing law or agood faith argument for the extension,modification, or reversal of existinglaw; and that it is not interposed forany improper purpose, such as to har-ass or to cause unnecessary delay orneedless increase in the cost of litiga-tion. For a willful violation of this sec-tion, a person admitted or qualified topractice before the Commission may besubjected to appropriate disciplinaryaction.

(b) If a party is not represented by aperson admitted or qualified to prac-tice before the Commission, eachpleading, document or other paper ofsuch party filed with the Commissionshall be signed and verified under oathby the party or by a duly authorized of-ficer or agent of the party, whose ad-dress and title shall be stated. The


51


form of verification shall be substan-tially as set forth in exhibit No. 1 tosubpart E. [Rule 112.]

(c) Wherever, under any rules of thispart, any matter is required or per-mitted to be supported, evidenced, es-tablished, or proved by the sworn dec-laration, verification, certificate,statement, oath, or affidavit, in writ-ing of the person making the same(other than a deposition under § 502.203or § 502.204), such matter may, with likeforce and effect, be supported, evi-denced, established, or proved by theunsworn declaration, certificate, ver-ification, or statement, in writing ofsuch person which is subscribed bysuch person, as true under penalty ofperjury, in substantially the followingform.

(1) If executed without the UnitedStates: ‘‘I declare (or certify, verify, orstate) under penalty of perjury underthe laws of the United States of Amer-ica that the foregoing is true and cor-rect.’’

(2) If executed within the UnitedStates, its territories, possessions, orcommonwealths: ‘‘I declare (or certify,verify, or state) under penalty of per-jury that the foregoing is true and cor-rect.’’

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984, as amended at 58 FR 27210, May 7, 1993]

§ 502.113 Service by the Commission.Complaints filed pursuant to § 502.62,

amendments to complaints (unless oth-erwise authorized by the presiding offi-cer pursuant to § 502.70(b)), and com-plainant’s memoranda filed in short-ened procedure cases will be served bythe Secretary of the Commission. Inaddition to and accompanying theoriginal of every document filed withthe Commission for service by theCommission, there shall be a sufficientnumber of copies for use of the Com-mission (see § 502.118) and for service oneach party to the proceeding. [Rule113.]


§ 502.114 Service and filing by parties.(a) Except as otherwise specifically

provided by the rules in this part, allpleadings, documents, and papers of

every kind (except requests for subpe-nas) in proceedings before the Commis-sion under the rules in this part (otherthan documents served by the Commis-sion under § 502.113 and documents sub-mitted at a hearing or prehearing con-ference) shall, when tendered to theCommission or the presiding officer forfiling, show that service has been madeupon all parties to the proceeding andupon any other persons required by therules in this part to be served. Suchservice shall be made by delivering onecopy to each party: by hand deliveringin person; by mail, properly addressedwith postage prepaid; or by courier.

(b) Service on all prior participantsshall be shown when submitting com-ments or replies beyond the initialround, or when submitting post-decisional pleadings and replies such aspetitions for reconsideration, or forstay under rule 261 or to reopen underrule 230 in all general notice proceed-ings, including those involving disposi-tion of petitions for rulemaking (rule51), petitions for declaratory order(rule 68), petitions general (rule 69), no-tices of proposed rulemaking (rule 53),proceedings under section 19 of theMerchant Marine Act, 1920, 46 U.S.C.app. 876(1)(b) (part 585), and proceedingsunder section 13(b)(5) of the ShippingAct of 1984, 46 U.S.C. app. 1712(b)(5)(part 587). A list of all participants maybe obtained from the Secretary of theCommission.

(c) Except with respect to filing ofcomplaints pursuant to §§ 502.62 and502.63, protests pursuant to § 502.67 andclaims pursuant to § 502.302, the date offiling shall be either the date on whichthe pleading, document, or paper isphysically lodged with the Commissionby a party or the date which a partycertifies it to have been deposited inthe mail or delivered to a courier.[Rule 114.]


§ 502.115 Service on attorney or otherrepresentative.

When a party has appeared by attor-ney or other representative, serviceupon each attorney or other represent-ative of record will be deemed serviceupon the party, except that, if two ormore attorneys of record are partners


52

46 CFR Ch. IV (10–1–96 Edition)§ 502.116

or associates of the same firm, onlyone of them need be served. [Rule 115.]

§ 502.116 Date of service.The date of service of documents

served by the Commission shall be thedate shown in the service stamp there-on. The date of service of documentsserved by parties shall be the day whenmatter served is deposited in the Unit-ed States mail, delivered to a courier,or is delivered in person, as the casemay be. In computing the time fromsuch dates, the provisions of § 502.101shall apply. [Rule 116.]

§ 502.117 Certificate of service.The original of every document filed

with the Commission and required tobe served upon all parties to a proceed-ing shall be accompanied by a certifi-cate of service signed by the partymaking service, stating that such serv-ice has been made upon each party tothe proceeding. Certificates of servicemay be in substantially the followingform:


I hereby certify that I have this day servedthe foregoing document upon [all parties ofrecord or name of person(s)] by [mailing, de-livering to courier or delivering in person] acopy to each such person.

Dated at, ——— this ——— day of ———19—.(Signature) —————————————————(For) ————————————————————

[Rule 117.]

§ 502.118 Copies of documents for useof the Commission.

(a) Except as otherwise provided inthe rules in this part, the original andfifteen (15) copies of every documentfiled and served in proceedings beforethe Commission shall be furnished forthe Commission’s use. If a certificateof service accompanied the originaldocument, a copy of such certificateshall be attached to each such copy ofthe document.

(b) In matters pending before an ad-ministrative law judge the followingcopy requirements apply.

(1) An original and fifteen copiesshall be filed with the Secretary of:

(i) Appeals and replies thereto filedpursuant to § 502.153;

(ii) Memoranda submitted undershortened procedures of subpart K ofthis part;

(iii) Briefs submitted pursuant to§ 502.221;

(iv) All motions, replies and other fil-ings for which a request is made of theadministrative law judge for certifi-cation to the Commission or on whichit otherwise appears it will be nec-essary for the Commission to rule ei-ther directly or upon review of the ad-ministrative law judge’s dispositionthereof, pursuant to § 502.227;

(v) Answers to complaints filed pur-suant to § 502.64.

(2) An original and four copies shallbe filed with the Secretary of prehear-ing statements required by § 502.95,stipulations under § 502.162, and allother motions, petitions, or other writ-ten communications seeking a rulingfrom the presiding administrative lawjudge.

(3)(i) A single copy shall be filed withthe Secretary of requests for discovery,answers, or objections exchangedamong the parties under procedures ofsubpart L of this part. Such materialswill not be part of the record for deci-sion unless admitted by the presidingofficer or Commission.

(ii) Motions filed pursuant to § 502.201are governed by the requirements ofparagraph (b)(2) of this section and mo-tions involving persons and documentslocated in a foreign country are gov-erned by the requirements of paragraph(b)(1)(iv) of this section.

(4) One copy of each exhibit shall befurnished to the official reporter, toeach of the parties present at the hear-ing and to the Presiding Officer unlesshe or she directs otherwise. If submit-ted other than at a hearing, the ‘‘re-porter’s’’ copy of an exhibit shall befurnished to the administrative lawjudge for later inclusion in the recordif and when admitted.

(5) Copies of prepared testimony sub-mitted pursuant to §§ 502.67(d) and502.157 are governed by the require-ments for exhibits in paragraph (b)(4)of this section. [Rule 118.]



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§ 502.119 Documents containing con-fidential materials.

Except as otherwise provided in therules of this part, all filings which con-tain information previously designatedas confidential pursuant to §§ 502.167,502.201(i)(1)(vii), or any other rules ofthis part or for which a request for pro-tective order pursuant to§ 502.201(i)(1)(vii) is pending, are subjectto the following requirements:

(a) Filings shall be accompanied by atransmittal letter which identifies thefiling as confidential and describes thenature and extent of the authority forrequesting confidential treatment.

(b) Such filings shall consist of publicand confidential copies. The public cop-ies shall exclude confidential mate-rials, shall indicate on the cover pageand on each affected page ‘‘confidentialmaterials excluded,’’ and shall be filedin an original and one copy. The con-fidential copies shall consist of thecomplete filing and shall include acover page marked ‘‘confidential-re-stricted,’’ with the confidential mate-rials likewise clearly marked on eachpage.

(c) Confidential treatment affordedby this section is subject to the provisothat any information designated asconfidential may be used by the admin-istrative law judge or the Commissionif deemed necessary to a correct deci-sion in the proceeding. [Rule 119.]

[55 FR 28400, July 11, 1990, as amended at 58FR 27211, May 7, 1993]

Subpart I—Subpenas

§ 502.131 Requests; issuance.Subpenas for the attendance of wit-

nesses or the production of evidenceshall be issued upon request of anyparty, without notice to any otherparty. Requests for subpenas for the at-tendance of witnesses may be madeorally or in writing; requests for subpe-nas for the production of evidence shallbe in writing. The party requesting thesubpena shall tender to the presidingofficer an original and at least two cop-ies of such subpena. Where it appearsto the presiding officer that the sub-pena sought may be unreasonable, op-pressive, excessive in scope, or undulyburdensome, he or she may in his or

her discretion, as a condition precedentto the issuance of the subpena, requirethe person seeking the subpena to showthe general relevance and reasonablescope of the testimony or other evi-dence sought. [Rule 131.]

§ 502.132 Motions to quash or modify.(a) Except when issued at a hearing,

or in connection with the taking of adeposition, within ten (10) days afterservice of a subpena for attendance of awitness or a subpena for production ofevidence, but in any event at or beforethe time specified in the subpena forcompliance therewith, the person towhom the subpena is directed may, bymotion with notice to the party re-questing the subpena, petition the pre-siding officer to quash or modify thesubpena.

(b) If served at the hearing, the per-son to whom the subpena is directedmay, by oral application at the hear-ing, within a reasonable time fixed bythe presiding officer, petition the pre-siding officer to revoke or modify thesubpena.

(c) If served in connection with thetaking of a deposition pursuant to§ 502.203 unless otherwise agreed to byall parties or otherwise ordered by thepresiding officer, the party who has re-quested the subpena shall arrange thatit be served at least twenty (20) daysprior to the date specified in the sub-pena for compliance therewith, the per-son to whom the subpena is directedmay move to quash or modify the sub-pena within ten (10) days after serviceof the subpena, and a reply to such mo-tion shall be served within five (5) daysthereafter. [Rule 132.]

§ 502.133 Attendance and mileage fees.Witnesses summoned by subpena to a

hearing are entitled to the same feesand mileage that are paid to witnessesin courts of the United States. Feesand mileage shall be paid, upon re-quest, by the party at whose instancethe witness appears. [Rule 133.]

§ 502.134 Service of subpenas.If service of a subpena is made by a

United States marshal, or his or herdeputy, or an employee of the Commis-sion, such service shall be evidenced byhis or her return thereon. If made by


54

46 CFR Ch. IV (10–1–96 Edition)§ 502.135

any other person, such person shallmake affidavit thereto, describing themanner in which service is made, andreturn such affidavit on or with theoriginal subpena. In case of failure tomake service, the reasons for the fail-ure shall be stated on the original sub-pena. In making service, the originalsubpena shall be exhibited to the per-son served, shall be read to him or herif he or she is unable to read, and acopy thereof shall be left with him orher. The original subpena, bearing oraccompanied by required return, affi-davit, or statement, shall be returnedwithout delay to the Commission, or ifso directed on the subpena, to the pre-siding officer before whom the personnamed in the subpena is required to ap-pear. [Rule 134.]

§ 502.135 Subpena of Commission staffpersonnel, documents or things.

(a) A subpena for the attendance ofCommission staff personnel or for theproduction of documentary materialsin the possession of the Commissionshall be served upon the Secretary. Ifthe subpena is returnable at hearing, amotion to quash may be filed withinfive (5) days of service and attendanceshall not be required until the presid-ing officer rules on said motion. If thesubpena is served in connection withprehearing depositions, the procedureto be followed with respect to motionsto quash and replies thereto will cor-respond to the procedures establishedwith respect to motions and replies in§ 502.132(c).

(b) The General Counsel shall des-ignate an attorney to represent anyCommission staff personnel subpenaedunder this section. The attorney sodesignated shall not thereafter partici-pate in the Commission’s decision-making process concerning any issue inthe proceeding.

(c) Rulings of the presiding officer is-sued under § 502.135(a) shall becomefinal rulings of the Commission unlessan appeal is filed within ten (10) daysafter date of issuance of such rulings orunless the Commission, on its own mo-tion, reverses, modifies, or stays suchrulings within twenty (20) days of theirissuance. Replies to appeals may befiled within ten (10) days. No ruling ofthe presiding officer shall be effective

until twenty (20) days from date of is-suance unless the Commission other-wise directs. [Rule 135.]

§ 502.136 Enforcement.

In the event of failure to comply withany subpena or order issued in connec-tion therewith, the Commission mayseek enforcement as provided in§ 502.210(b). [Rule 136.]

Subpart J—Hearings; PresidingOfficers; Evidence

§ 502.141 Hearings not required bystatute.

The Commission may call informalpublic hearings, not required by stat-ute, to be conducted under the rules inthis part where applicable, for the pur-pose of rulemaking or to obtain infor-mation necessary or helpful in the de-termination of its policies or the carry-ing out of its duties, and may requirethe attendance of witnesses and theproduction of evidence to the extentpermitted by law. [Rule 141.]

§ 502.142 Hearings required by statute.

In complaint and answer cases, inves-tigations on the Commission’s own mo-tion, and in other rulemaking and ad-judication proceedings in which a hear-ing is required by statute, formal hear-ings shall be conducted pursuant to 5U.S.C. 554. [Rule 142.]

§ 502.143 Notice of nature of hearing,jurisdiction and issues.

Persons entitled to notice of hear-ings, except those notified by com-plaint served under § 502.133, will beduly and timely informed of (a) the na-ture of the proceeding, (b) the legal au-thority and jurisdiction under whichthe proceeding is conducted, and (c) theterms, substance, and issues involved,or the matters of fact and law asserted,as the case may be. Such notice shallbe published in the FEDERAL REGISTERunless all persons subject thereto arenamed and either are personally servedor otherwise have actual notice thereofin accordance with law. [Rule 143.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]


55


§ 502.144 Notice of time and place ofhearing.

Notice of hearing will designate thetime and place thereof, the person orpersons who will preside, and the kindof decision to be issued. The date orplace of a hearing for which notice hasbeen issued may be changed when war-ranted. Reasonable notice will be givento the parties or their representativesof the time and place of the changethereof, due regard being had for thepublic interest and the convenienceand necessity of the parties or theirrepresentatives. Notice may be servedby mail or telegraph. [Rule 144.]

§ 502.145 Presiding officer.

(a) Definition. Presiding officer in-cludes, where applicable, a member ofthe Commission or an administrativelaw judge. (See § 502.25.)

(b) Designation of administrative lawjudge. An administrative law judge willbe designated by the Chief of the Com-mission’s Office of Administrative LawJudges to preside at hearings requiredby statute, in rotation so far as prac-ticable, unless the Commission or oneor more members thereof shall preside,and will also preside at hearings not re-quired by statute when designated todo so by the Commission.

(c) Unavailability. If the presiding of-ficer assigned to a proceeding becomesunavailable to the Commission, theCommission, or Chief Judge (if suchpresiding officer was an administrativelaw judge), shall designate a qualifiedofficer to take his or her place. Anymotion predicated upon the substi-tution of a new presiding officer for oneoriginally designated shall be madewithin ten (10) days after notice of suchsubstitution. [Rule 145.]

§ 502.146 Commencement of functionsof Office of Administrative LawJudges.

In proceedings handled by the Officeof Administrative Law Judges, itsfunctions shall attach:

(a) Upon the service by the Commis-sion of a complaint filed pursuant to§ 502.62; or

(b) Upon reference by the Commis-sion of a petition for a declaratoryorder pursuant to § 502.68; or

(c) Upon forwarding for assignmentby the Office of the Secretary of a spe-cial docket application pursuant to§ 502.92; or

(d) Upon the initiation of a proceed-ing and ordering of hearing before anadministrative law judge. [Rule 146.]

§ 502.147 Functions and powers.(a) Of presiding officer. The officer

designated to hear a case shall have au-thority to arrange and give notice ofhearing; sign and issue subpenas au-thorized by law; take or cause deposi-tions to be taken; rule upon proposedamendments or supplements to plead-ings; delineate the scope of a proceed-ing instituted by order of the Commis-sion by amending, modifying, clarify-ing or interpreting said order, exceptwith regard to that portion of anyorder involving the Commission’s sus-pension authority set forth in section3, Intercoastal Shipping Act, 1933; in-form the parties as to the availabilityof one or more alternative means ofdispute resolution, encourage use ofsuch methods, and require consider-ation of their use at an early stage ofthe proceeding; hold conferences forthe settlement or simplification of theissues by consent of the parties or bythe use of alternative means of disputeresolution; transmit the request of par-ties for the appointment of a mediatoror settlement judge, as provided by§ 502.91 of this part; require the attend-ance at any such conference pursuantto 5 U.S.C. 556(c)(8), of at least one rep-resentative of each party who has au-thority to negotiate concerning resolu-tion of issues in controversy; regulatethe course of the hearing; prescribe theorder in which evidence shall be pre-sented; dispose of procedural requestsor similar matters; hear and rule uponmotions; administer oaths and affirma-tions; examine witnesses; direct wit-nesses to testify or produce evidenceavailable to them which will aid in thedetermination of any question of factin issue; rule upon offers of proof andreceive relevant material, reliable andprobative evidence; act upon petitionsto intervene; permit submission offacts, arguments, offers of settlement,and proposals of adjustment; and, if theparties so request, issue formal opin-ions providing tentative evaluations of


56

46 CFR Ch. IV (10–1–96 Edition)§ 502.148

the evidence submitted; hear oral argu-ment at the close of testimony; fix thetime for filing briefs, motions, andother documents to be filed in connec-tion with hearings and the administra-tive law judge’s decision thereon, ex-cept as otherwise provided by the rulesin this part; act upon petitions for en-largement of time to file such docu-ments, including answers to formalcomplaints; and dispose of any othermatter that normally and properlyarises in the course of proceedings. Thepresiding officer or the Commissionmay exclude any person from a hearingfor disrespectful, disorderly, or con-tumacious language or conduct.

(b) All of the functions delegated insubparts A to Q of this part, inclusive,to the Chief Judge, presiding officer, oradministrative law judge include thefunctions with respect to hearing, de-termining, ordering, certifying, report-ing, or otherwise acting as to anywork, business, or matter, pursuant tothe provisions of section 105 of Reorga-nization Plan No. 7 of 1961. [Rule 147.]


§ 502.148 Consolidation of proceedings.The Commission or the Chief Judge

(or designee) may order two or moreproceedings which involve substan-tially the same issues consolidated andheard together. [Rule 148.]

§ 502.149 Disqualification of presidingor participating officer.

Any presiding or participating officermay at any time withdraw if he or shedeems himself or herself disqualified,in which case there will be designatedanother presiding officer. If a party toa proceeding, or its representative,files a timely and sufficient affidavit ofpersonal bias or disqualification of apresiding or participating officer, theCommission will determine the matteras a part of the record and decision inthe case. [Rule 149.]

§ 502.150 Further evidence required bypresiding officer during hearing.

At any time during the hearing, thepresiding officer may call for furtherevidence upon any issue, and requiresuch evidence where available to bepresented by the party or parties con-

cerned, either at the hearing or ad-journment thereof. [Rule 150.]

§ 502.151 Exceptions to rulings of pre-siding officer unnecessary.

Formal exceptions to rulings of thepresiding officer are unnecessary. It issufficient that a party, at the time theruling of the presiding officer is madeor sought, makes known the actionwhich it desires the presiding officer totake or its objection to an actiontaken, and its grounds therefor. [Rule151.]

§ 502.152 Offer of proof.

An offer of proof made in connectionwith an objection taken to any rulingof the presiding officer rejecting or ex-cluding proffered oral testimony shallconsist of a statement of the substanceof the evidence which counsel contendswould be adduced by such testimony;and, if the excluded evidence consistsof evidence in documentary or writtenform or of reference to documents orrecords, a copy of such evidence shallbe marked for identification and shallconstitute the offer of proof. [Rule 152.]

§ 502.153 Appeal from ruling of presid-ing officer other than orders of dis-missal in whole or in part.

(a) Rulings of the presiding officermay not be appealed prior to or duringthe course of the hearing, or subse-quent thereto, if the proceeding is stillbefore him or her, except where thepresiding officer shall find it necessaryto allow an appeal to the Commissionto prevent substantial delay, expense,or detriment to the public interest, orundue prejudice to a party.

(b) Any party seeking to appeal mustfile a motion for leave to appeal nolater than fifteen (15) days after writ-ten service or oral notice of the rulingin question, unless the presiding offi-cer, for good cause shown, enlarges orshortens the time. Any such motionshall contain not only the grounds forleave to appeal but the appeal itself.

(c) Replies to the motion for leave toappeal and the appeal may be filedwithin fifteen (15) days after date ofservice thereof, unless the presiding of-ficer, for good cause shown, enlarges orshortens the time. If the motion is


57


granted, the presiding officer shall cer-tify the appeal to the Commission.

(d) Unless otherwise provided, thecertification of the appeal shall not op-erate as a stay of the proceeding beforethe presiding officer.

(e) The provisions of § 502.10 shall notapply to this section. [Rule 153.]

§ 502.154 Rights of parties as to pres-entation of evidence.

Every party shall have the right topresent its case or defense by oral ordocumentary evidence, to submit re-buttal evidence, and to conduct suchcross-examination as may be requiredfor a full and true disclosure of thefacts. The presiding officer shall, how-ever, have the right and duty to limitthe introduction of evidence and theexamination and cross-examination ofwitnesses when in his or her judgment,such evidence or examination is cumu-lative or is productive of undue delayin the conduct of the hearing. [Rule154.]

§ 502.155 Burden of proof.At any hearing under section 3 of the

Intercoastal Shipping Act, 1933(§ 502.67), the burden of proof to showthat the new rate, fare, charge, classi-fication, regulation, or practice is justand reasonable shall be upon the re-spondent carrier or carriers. In allcases, as prescribed by the Administra-tive Procedure Act, 5 U.S.C. 556(d), theburden shall be on the proponent of therule or order. [Rule 155.]

[58 FR 58976, Nov. 5, 1993]

§ 502.156 Evidence admissible.In any proceeding under the rules in

this part, all evidence which is rel-evant, material, reliable and probative,and not unduly repetitious or cumu-lative, shall be admissible. All otherevidence shall be excluded. Unless in-consistent with the requirements ofthe Administrative Procedure Act andthese Rules, the Federal Rules of Evi-dence, Public Law 93–595, effective July1, 1975, will also be applicable. [Rule156.]

§ 502.157 Written evidence.(a) The use of written statements in

lieu of oral testimony shall be resorted

to where the presiding officer in his orher discretion rules that such proce-dure is appropriate. The statementsshall be numbered in paragraphs, andeach party in its rebuttal shall be re-quired to list the paragraphs to whichit objects, giving an indication of itsreasons for objecting. Statistical ex-hibits shall contain a short com-mentary explaining the conclusionswhich the offeror draws from the data.Any portion of such testimony which isargumentative shall be excluded.Where written statements are used,copies of the statement and any rebut-tal statement shall be furnished to allparties, as shall copies of exhibits. Thepresiding officer shall fix respectivedates for the exchange of such writtenrebuttal statements and exhibits in ad-vance of the hearing to enable study bythe parties of such testimony. There-after, the parties shall endeavor tostipulate as many of the facts set forthin the written testimony as they maybe able to agree upon. Oral examina-tion of witnesses shall thereafter beconfined to facts which remain in con-troversy, and a reading of the writtenstatements at the hearing will be dis-pensed with unless the presiding officerotherwise directs.

(b) Where a formal hearing is held ina rulemaking proceeding, interestedpersons will be afforded an opportunityto participate through submission ofrelevant, material, reliable and pro-bative written evidence properly veri-fied, except that such evidence submit-ted by persons not present at the hear-ing will not be made a part of therecord if objected to by any party onthe ground that the person who sub-mits the evidence is not present forcross-examination. [Rule 157.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

§ 502.158 Documents containing mat-ter not material.

Where written matter offered in evi-dence is embraced in a document con-taining other matter which is not in-tended to be offered in evidence, the of-fering party shall present the originaldocument to all parties at the hearingfor their inspection, and shall offer atrue copy of the matter which is to beintroduced, unless the presiding officer


58

46 CFR Ch. IV (10–1–96 Edition)§ 502.160

determines that the matter is shortenough to be read into the record. Op-posing parties shall be afforded an op-portunity to introduce in evidence, inlike manner, other portions of theoriginal document which are materialand relevant. [Rule 158.]


§ 502.160 Records in other proceed-ings.

When any portion of the record be-fore the Commission in any proceedingother than the one being heard is of-fered in evidence, a true copy of suchportion shall be presented for therecord in the form of an exhibit unlessthe parties represented at the hearingstipulate upon the record that suchportion may be incorporated by ref-erence. [Rule 160.]

§ 502.161 Commission’s files.Where any matter contained in a tar-

iff, report, or other document on filewith the Commission is offered in evi-dence, such document need not be pro-duced or marked for identification, butthe matter so offered shall be specifiedin its particularity, giving tariff num-ber and page number of tariff, report,or document in such manner as to bereadily identified, and may be receivedin evidence by reference, subject tocomparison with the original documenton file. [Rule 161.]

§ 502.162 Stipulations.The parties may, by stipulation,

agree upon any facts involved in theproceeding and include them in therecord with the consent of the presid-ing officer. It is desirable that facts bethus agreed upon whenever practicable.Writen stipulations shall be subscribedand shall be served upon all parties ofrecord unless presented at the hearingor prehearing conference. A stipulationmay be proposed even if not subscribedby all parties without prejudice to anynonsubscribing party’s right to cross-examine and offer rebuttal evidence.[Rule 162.]

§ 502.163 Receipt of documents afterhearing.

Documents or other writings to besubmitted for the record after the close

of the hearing will not be received inevidence except upon permission of thepresiding officer. Such documents orother writings when submitted shall beaccompanied by a statement that cop-ies have been served upon all parties,and shall be received, except for goodcause shown, not later than ten (10)days after the close of the hearing andnot less than (10) days prior to the dateset for filing briefs. Exhibit numberswill not be assigned until such docu-ments are actually received and incor-porated in the record. [Rule 163.]

§ 502.164 Oral argument at hearings.

Oral argument at the close of testi-mony may be ordered by the presidingofficer in his or her discretion. [Rule164.]

§ 502.165 Official transcript.

(a) The Commission will designatethe official reporter for all hearings.The official transcript of testimonytaken, together with any exhibits andany briefs or memoranda of law filedtherewith, shall be filed with the Com-mission. Transcripts of testimony willbe available in any proceeding underthe rules in this part, and will be sup-plied by the official reporter to theparties and to the public, except whenrequired for good cause to be held con-fidential, at rates not to exceed themaximum rates fixed by contract be-tween the Commission and the re-porter.

(b)(1) Section 11 of the Federal Advi-sory Committee Act provides that, ex-cept where prohibited by contractualagreements entered into prior to theeffective date of this Act, agencies andadvisory committees shall make avail-able to any person, at actual cost ofduplication, copies of transcripts ofagency proceedings or advisory com-mittee meetings. As used in this sec-tion, ‘‘agency proceeding’’ means anyproceeding as defined in 5 U.S.C.551(12).

(2) The Office of Management andBudget has interpreted this provisionas being applicable to proceedings be-fore the Commission and its adminis-trative law judges. (Guidelines, 38 FR12851, May 16, 1973.)


59


(3) The Commission interprets sec-tion 11 and the OMB guidelines as fol-lows:

(i) Future contracts between theCommission and the successfully bid-ding recording firm will provide thatany party to a Commission proceedingor other interested person (hereinafterincluded within the meaning of‘‘party’’) shall be able to obtain a copyof the transcript of the proceeding inwhich it is involved at the actual costof duplication of the original tran-script, which includes a reasonableamount for overhead and profit, exceptwhere it requests delivery of copies ina shorter period of time than is re-quired for delivery by the Commission.

(ii) The Commission will bear the fullexpense of transcribing all of its ad-ministrative proceedings where it re-quests regular delivery service (as setforth in the Contract). In cases wherethe Commission requests daily deliveryof transcript copies (as set forth in theContract), any party may receive dailydelivery service at the actual cost ofduplication.

(iii)(A) Where the Commission doesnot request daily copy service, anyparty requesting such service mustbear the incremental cost of tran-scription above the regular copy tran-scription cost borne by the Commis-sion, in addition to the actual cost ofduplication, except that where theparty applies for and properly showsthat the furnishing of daily copy isindispensible to the protection of avital right or interest in achieving afair hearing, the presiding officer inthe proceeding in which the applicationis made shall order that daily copyservice be provided the applying partyat the actual cost of duplication, withthe full cost of transcription beingborne by the Commission.

(B) In the event a request for dailycopy is denied by the presiding officer,the requesting party, in order to obtaindaily copy, must pay the cost of tran-scription over and above that borne bythe Commission, i.e., the incrementalcost between that paid by the Commis-sion when it requests regular copy andwhen it requests daily copy.

(C) The decision of the presiding offi-cer in this situation is interpreted as

falling within the scope of the func-tions and powers of the presiding offi-cer, as defined in § 502.147(a). [Rule 165.]

§ 502.166 Corrections of transcript.

Motions made at the hearing to cor-rect the record will be acted upon bythe presiding officer. Motions madeafter the hearing to correct the recordshall be filed with the presiding officerwithin twenty-five (25) days after thelast day of hearing or any sessionthereof, unless otherwise directed bythe presiding officer, and shall beserved on all parties. Such motionsmay be in the form of a letter. If no ob-jections are received within ten (10)days after date of service, the tran-script will, upon approval of the presid-ing officer, be changed to reflect suchcorrections. If objections are received,the motion will be acted upon with dueconsideration of the stenographicrecord of the hearing. [Rule 166.]

§ 502.167 Objection to public disclo-sure of information.

Upon objection to public disclosure ofany information sought to be elicitedduring a hearing, the presiding officermay in his or her discretion order thatthe witness shall disclose such infor-mation only in the presence of thosedesignated and sworn to secrecy by thepresiding officer. The transcript of tes-timony shall be held confidential. Cop-ies of said transcript need be servedonly upon the parties to whose rep-resentatives the information has beendisclosed and upon such other partiesas the presiding officer may designate.This rule is subject to the proviso thatany information given pursuant there-to, may be used by the presiding officeror the Commission if deemed necessaryto a correct decision in the proceeding.[Rule 167.]

[55 FR 28400, July 11, 1990]

§ 502.168 Copies of data or evidence.

Every person compelled to submitdata or evidence shall be entitled to re-tain or, on payment of proper costs,procure a copy of transcript thereof.[Rule 168.]


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46 CFR Ch. IV (10–1–96 Edition)§ 502.169

§ 502.169 Record of decision.The transcript of testimony and ex-

hibits, together with all papers and re-quests filed in the proceeding, shallconstitute the exclusive record for de-cision. [Rule 169.]

Subpart K—Shortened Procedure

§ 502.181 Selection of cases for short-ened procedure; consent required.

By consent of the parties and withapproval of the Commission or presid-ing officer, a complaint proceedingmay be conducted under shortened pro-cedure without oral hearing, exceptthat a hearing may be ordered by thepresiding officer at the request of anyparty or in his or her discretion. [Rule181.]

§ 502.182 Complaint and memorandumof facts and arguments and filingfee.

A complaint filed with the Commis-sion under this subpart shall have at-tached a memorandum of the facts,subscribed and verified according to§ 502.112, and of arguments separatelystated, upon which it relies. The origi-nal of each complaint with memoran-dum shall be accompanied by copies forthe Commission’s use. The complaintshall be accompanied by remittance ofa $166 filing fee. [Rule 182.]

[49 FR 44369, Nov. 6, 1984, as amended at 59FR 59170, Nov. 16, 1994]

§ 502.183 Respondent’s answeringmemorandum.

Within twenty-five (25) days afterdate of service of the complaint, unlessa shorter period is fixed, each respond-ent shall, if it consents to the short-ened procedure provided in this sub-part, serve upon complainant pursuantto subpart H of this part an answeringmemorandum of the facts, subscribedand verified according to § 502.112, andof arguments, separately stated, uponwhich it relies. The original of the an-swering memorandum shall be accom-panied by a certificate of service asprovided in § 502.114 and shall be accom-panied by copies for the Commission’suse. If the respondent does not consentto the proceeding being conductedunder the shortened procedure provided

in this subpart, the matter will be gov-erned by subpart E of this part and therespondent shall file an answer under§ 502.64. [Rule 183.]

§ 502.184 Complainant’s memorandumin reply.

Within fifteen (15) days after the dateof service of the answering memoran-dum prescribed in § 502.183, unless ashorter period is fixed, each complain-ant may file a memorandum in reply,subscribed and verified according to§ 502.112, served as provided in § 502.114,and accompanied by copies for theCommission’s use. This will close therecord for decision unless the presidingofficer determines that the record is in-sufficient and orders the submission ofadditional evidentiary materials. [Rule184.]

§ 502.185 Service of memoranda uponand by interveners.

Service of all memoranda shall bemade upon any interveners.Interveners shall file and serve memo-randa in conformity with the provi-sions relating to the parties on whosebehalf they intervene. [Rule 185.]

§ 502.186 Contents of memoranda.The memorandum should contain

concise arguments and fact, the sameas would be offered if a formal hearingwere held and briefs filed. If reparationis sought, paid freight bills should ac-company complainant’s originalmemorandum. [Rule 186.]

§ 502.187 Procedure after filing ofmemoranda.

An initial, recommended, or ten-tative decision will be served upon theparties in the same manner as is pro-vided under § 502.225. Thereafter, theprocedure will be the same as that inrespect to proceedings after formalhearing. [Rule 187.]

Subpart L—Depositions, WrittenInterrogatories, and Discovery

§ 502.201 General provisions governingdiscovery.

(a) Applicability. The procedures de-scribed in this subpart are available inall adjudicatory proceedings under sec-tion 22 of the Shipping Act, 1916 and


61


the Shipping Act of 1984. Unless other-wise ordered by the presiding officer,the copy requirements of§ 502.118(b)(3)(i) shall be observed.

(b) Schedule of use—(1) Complaint pro-ceedings. Any party desiring to use theprocedures provided in this subpartshall commence doing so at the time itfiles its initial pleading, e.g., com-plaint, answer or petition for leave tointervene. Discovery matters accom-panying complaints shall be filed withthe Secretary of the Commission forservice pursuant to § 502.113.

(2) Commission instituted proceedings.All parties desiring to use the proce-dures provided in this subpart shallcommence to do so within 30 days ofthe service of the Commission’s orderinitiating the proceeding.

(3) Commencement of discovery. The re-quirement to commence discoveryunder paragraphs (b)(1) and (b)(2) ofthis section shall be deemed satisfiedwhen a party serves any discovery re-quest under this subpart upon a partyor person from whom a response isdeemed necessary by the party com-mencing discovery. A schedule for fur-ther discovery pursuant to this subpartshall be established at the conferenceof the parties pursuant to paragraph(d) of this section.

(c) Completion of discovery. Discoveryshall be completed within 120 days ofthe service of the complaint or theCommission’s order initiating the pro-ceeding.

(d) Duty of the Parties. In all proceed-ings in which the procedures of thissubpart are used, it shall be the duty ofthe parties to meet or confer within fif-teen (15) days after service of the an-swer to a complaint or after service ofthe discovery requests in a Commis-sion-instituted proceeding in order to:establish a schedule for the completionof discovery within the 120-day periodprescribed in paragraph (c) of this sec-tion; resolve to the fullest extent pos-sible disputes relating to discoverymatters; and expedite, limit, or elimi-nate discovery by use of admissions,stipulations and other techniques. Theschedule shall be submitted to the pre-siding officer not later than five (5)days after the conference. Nothing inthis rule should be construed to pre-

clude the parties from meeting or con-ferring at an earlier date.

(e) Submission of status reports and re-quests to alter schedule. The partiesshall submit a status report concerningtheir progress under the discoveryschedule established pursuant to para-graph (d) of this section not later thanthirty (30) days after submission ofsuch schedule to the presiding officerand at 30-day intervals thereafter, con-cluding on the final day of the discov-ery schedule, unless the presiding offi-cer otherwise directs. Requests to altersuch schedule beyond the 120-day pe-riod shall set forth clearly and in detailthe reasons why the schedule cannot bemet. Such requests may be submittedwith the status reports unless an eventoccurs which makes adherence to theschedule appear to be impossible, inwhich case the requests shall be sub-mitted promptly after occurrence ofsuch event.

(f) Conferences. The presiding officermay at any time order the parties ortheir attorneys to participate in a con-ference at which the presiding officermay direct the proper use of the proce-dures of this subpart or make such or-ders as may be necessary to resolve dis-putes with respect to discovery and toprevent delay or undue inconvenience.When a reporter is not present and oralrulings are made at a conference heldpursuant to this paragraph or para-graph (g) of this section, the partiesshall submit to the presiding officer assoon as possible but within three (3)work days, unless the presiding officergrants additional time, a joint memo-randum setting forth their mutual un-derstanding as to each ruling on whichthey agree and, as to each ruling onwhich their understandings differ, theindividual understandings of eachparty. Thereafter, the presiding officershall issue a written order setting forthsuch rulings.

(g) Resolution of disputes. After mak-ing every reasonable effort to resolvediscovery disputes, a party may re-quest a conference or rulings from thepresiding officer on such disputes. Suchrulings shall be made orally upon therecord when feasible and/or by subse-quent ruling in writing. If necessary toprevent undue delay or otherwise fa-cilitate conclusion of the proceeding,


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46 CFR Ch. IV (10–1–96 Edition)§ 502.202

the presiding officer may order a hear-ing to commence before the completionof discovery.

(h) Scope of examination. Persons andparties may be examined regarding anymatter, not privileged, which is rel-evant to the subject matter involved inthe proceeding, whether it relates tothe claim or defense of the examiningparty or to the claim or defense of anyother party, including the existence,description, nature, custody, condition,and location of any books, documents,or other tangible things, and the iden-tity and location of persons havingknowledge of relevant facts. It is notground for objection that the testi-mony will be inadmissible at the hear-ing if the testimony sought appearsreasonably calculated to lead to thediscovery of admissible evidence.

(i) Protective orders. (1) Upon motionby a party or by the person from whomdiscovery is sought, and for good causeshown, the presiding officer may makeany order which justice requires to pro-tect a party or person from annoyance,embarrassment, oppression, or undueburden or expense including one ormore of the following:

(i) That the discovery not be had;(ii) That the discovery may be had

only on specified terms and conditionsincluding a designation of the time orplace;

(iii) That the discovery may be hadonly by a method of discovery otherthan that selected by the party seekingdiscovery;

(iv) That certain matters not be in-quired into, or that the scope of thediscovery be limited to certain mat-ters;

(v) That discovery may be conductedwith no one present except persons des-ignated by the presiding officer;

(vi) That a deposition after beingsealed be opened only by order of thepresiding officer;

(vii) That a trade secret or other con-fidential research, development, orcommercial information not be dis-closed or be disclosed only in a des-ignated way;

(viii) That the parties simulta-neously file specified documents or in-formation enclosed in sealed envelopesto be opened as directed by the presid-ing officer.

(2) If the motion for a protectiveorder is denied in whole or in part, thepresiding officer may, on such termsand conditions as are just, order thatany party or person provide or permitdiscovery. Rulings under this para-graph shall be issued by the presidingofficer at a discovery conference calledunder § 502.201(f) or, if circumstanceswarrant, under such other procedurethe presiding officer may establish.

(j) Supplementation of responses. Aparty who has responded to a requestfor discovery with a response that wascomplete when made is under no dutyto supplement the party’s responses toinclude information thereafter ac-quired, except as follows:

(1) A party is under a duty season-ably to supplement responses with re-spect to any question directly ad-dressed to (i) the identity and locationof persons having knowledge of discov-erable matters, and (ii) the identity ofeach person expected to be called as anexpert witness at a hearing, the subjectmatter on which such person is ex-pected to testify, and the substance ofthe testimony.

(2) A party is under a duty season-ably to amend a prior response if theparty obtains information upon thebasis of which (i) the party knows thatthe response was incorrect when made,or (ii) the party knows that the re-sponse though correct when made is nolonger true and the circumstances aresuch that a failure to amend the re-sponse is in substance a knowing con-cealment.

(3) A duty to supplement responsesmay be imposed by order of the presid-ing officer or by agreement of the par-ties, subject to the time limitations setforth in paragraph (c) of this section orestablished under paragraph (e) of thissection. [Rule 201.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

§ 502.202 Persons before whom deposi-tions may be taken.

(a) Within the United States. Withinthe United States or within a territoryor insular possession subject to the ju-risdiction of the United States, deposi-tions shall be taken before an officerauthorized to administer oaths under


63


the laws of the United States or of theplace where the examination is held.

(b) In foreign countries. In a foreigncountry, depositions may be taken (1)on notice, before a person authorized toadminister oaths in the place in whichthe examination is held, either underthe law thereof or under the law of theUnited States, or (2) before a personcommissioned by the Commission, anda person so commissioned shall havethe power by virtue of his or her com-mission to administer any necessaryoath and take testimony, or (3) pursu-ant to a letter rogatory. A commissionor a letter rogatory shall be issued onapplication and notice and on termsthat are just and appropriate. It is notrequisite to the issuance of a commis-sion or a letter rogatory that the tak-ing of the deposition in any other man-ner is impracticable or inconvenient;and both a commission and a letterrogatory may be issued in proper cases.A notice or commission may designatethe person before whom the depositionis to be taken either by name or de-scriptive title. A letter rogatory maybe addressed ‘‘To the Appropriate Au-thority in [here name the country].’’Evidence obtained in response to a let-ter rogatory need not be excludedmerely for the reason that it is not averbatim transcript or that the testi-mony was not taken under oath or forany similar departure from the require-ments for depositions taken within theUnited States under the rules in thissubpart. (See 22 CFR 92.49—92.66.)

(c) Disqualification for interest. No dep-osition shall be taken before a personwho is a relative or employee or attor-ney or counsel of any of the parties, oris a relative or employee of such attor-ney or counsel, or is financially inter-ested in the action.

(d) Waiver of objection. Objection totaking a deposition because of disquali-fication of the officer before whom it isto be taken is waived unless made be-fore the deposition begins or as soonthereafter as the disqualification be-comes known or could be discoveredwith reasonable diligence

(e) Stipulations. If the parties so stip-ulate in writing, depositions may betaken before any person, at any timeor place, upon any notice, and in any

manner and when so taken may be usedlike other depositions. [Rule 202.]

§ 502.203 Depositions upon oral exam-ination.

(a) Notice of examination. (1) A partydesiring to take the deposition of anyperson upon oral examination shallgive reasonable notice in writing tosuch person and to every other party tothe action, pursuant to subpart H ofthis part. The notice shall state thetime and place for taking the deposi-tion and the name and address of eachperson to be examined, if known, and,if the name is not known, a general de-scription sufficient to identify the per-son or the particular class or group towhich the person belongs. The noticeshall also contain a statement of thematters concerning which each witnesswill testify.

(2) The attendance of witnesses maybe compelled by subpena as provided insubpart I of this part. If a subpenaduces tecum is to be served on the per-son to be examined, the designation ofthe materials to be produced as setforth in the subpena shall be attachedto or included in the notice.

(3) All errors and irregularities in thenotice or subpena for taking of a depo-sition are waived unless written objec-tion is promptly served upon the partygiving the notice.

(4) Examination and cross-examina-tion of deponents may proceed as per-mitted at the hearing under the provi-sions of § 502.154.

(b) Record of examination; oath; objec-tions. (1) The officer before whom thedeposition is to be taken shall put thewitness on oath and shall personally,or by someone acting under the direc-tion and in his or her presence, recordthe testimony of the witness. The tes-timony shall be taken stenographicallyand transcribed unless the partiesagree otherwise. All objections made atthe time of the examination to thequalifications of the officer taking it,or to the evidence presented, or to theconduct of any party, and any other ob-jection to the proceedings, shall benoted by the officer upon the deposi-tion. Evidence objected to shall betaken subject to the objections. Objec-tions shall be resolved at a discoveryconference called under § 502.201(f) or, if


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46 CFR Ch. IV (10–1–96 Edition)§ 502.204

circumstances warrant, by such otherprocedure as the presiding officer mayestablish.

(2) In lieu of participating in the oralexamination, parties served with no-tice of taking a deposition may trans-mit written interrogatories to the offi-cer, who shall propound them to thewitness and record the answers ver-batim.

(3) The parties may stipulate or thepresiding officer may upon motionorder that a deposition be taken bytelephone or other reliable device.

(c) Motion to terminate or limit exam-ination. At any time during the takingof the deposition, on motion of anyparty or of the deponent and upon ashowing that the examination is beingconducted in bad faith or in such man-ner as unreasonably to annoy, embar-rass, or oppress the deponent or party,the presiding officer may order the of-ficer conducting the examination tocease forthwith from taking the deposi-tion, or may limit the scope and man-ner of the taking of the deposition asprovided in paragraph (b) of this sec-tion. If the order made terminates theexamination, it shall be resumed there-after only upon the order of the presid-ing officer. Upon demand of the object-ing party or deponent, the taking ofthe deposition shall be suspended forthe time necessary to make a motionfor an order. Rulings under this para-graph shall be issued by the presidingofficer at a discovery conference calledunder § 502.201(f) or, if circumstanceswarrant, by such other procedure asthe presiding officer may establish.

(d) Submission to witness; changes;signing. When the testimony is fullytranscribed, the deposition shall besubmitted to the witness for examina-tion and shall be read to or by the wit-ness, unless such examination andreading are waived by the witness andby the parties. Any changes in form orsubstance which the witness desires tomake shall be entered upon the deposi-tion by the officer with a statement ofthe reasons given by the witness formaking them. The deposition shallthen be signed by the witness unlessthe parties by stipulation waive thesigning or the witness is ill or cannotbe found or refuses to sign. If the depo-sition is not signed by the witness, the

officer shall sign it and state on therecord the fact of the waiver or of theillness or absence of the witness or thefact of the refusal to sign, togetherwith the reason, if any, given therefor,and the deposition may then be used asfully as though signed, unless upon ob-jection, the presiding officer holds thatthe reasons given for the refusal tosign require rejection of the depositionin whole or in part.

(e) Certification and filing by officer;copies, notice of filing. (1) The officertaking the deposition shall certify onthe deposition that the witness wasduly sworn by the officer and that thedeposition is a true record of the testi-mony given by the witness. The officershall then securely seal the depositionin an envelope endorsed with the titleof the action and marked ‘‘Depositionof [here insert name of witness]’’ andshall promptly file it with the Sec-retary of the Commission by hand orregistered or certified mail.

(2) Interested parties shall maketheir own arrangements with the offi-cer taking the deposition for copies ofthe testimony and the exhibits.

(3) The party taking the depositionshall give prompt notice of its filing toall other parties.

(f) Effect of errors and irregularities.Errors and irregularities in the mannerin which the testimony is transcribedor the deposition is prepared, signed,certified, sealed, endorsed, transmit-ted, filed, or otherwise dealt with bythe officer under this section and§ 502.204 are waived unless a motion tosuppress the deposition or some partthereof is made within ten (10) days offiling. [Rule 203.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984, as amended at 58 FR 27211, May 7, 1993]

§ 502.204 Depositions upon written in-terrogatories.

(a) Serving interrogatories; notice. Aparty desiring to take the deposition ofany person upon written interrog-atories shall serve them upon everyother party pursuant to subpart H ofthis part with a notice stating thename and address of the person who isto answer them and the name or de-scriptive title and address of the officerbefore whom the deposition is to betaken. Within ten (10) days thereafter,


65


a party so served may serve cross in-terrogatories upon the party proposingto take the deposition. All errors andirregularities in the notice are waivedunless written objection is promptlyserved upon the party giving the no-tice.

(b) Officer to take responses and pre-pare record. A copy of the notice andcopies of all interrogatories servedshall be delivered by the party takingthe deposition to the officer designatedin the notice, who shall proceedpromptly in the manner provided byparagraphs (b), (d) and (e) of § 502.203 totake the testimony of the witness inresponse to the interrogatories and toprepare, certify, and file or mail thedeposition, attaching thereto the copyof the notice and the interrogatoriesreceived by him or her.

(c) Notice of filing. When the deposi-tion is filed, the party taking it shallpromptly give notice thereof to allother parties. [Rule 204.]

§ 502.205 Interrogatories to parties.(a) Service; answers. (1) Any party

may serve, pursuant to subpart H ofthis part, upon any other party writteninterrogatories to be answered by theparty served or, if the party served is apublic or private corporation or a part-nership or association, by any officeror agent, who shall furnish such infor-mation as is available to the party.Any party desiring to serve interrog-atories as provided by this sectionmust comply with the applicable provi-sions of § 502.201 and make servicethereof on all parties to the proceed-ing.

(2) Each interrogatory shall be an-swered separately and fully in writingunder oath, unless it is objected to, inwhich event the reasons for objectionshall be stated in lieu of an answer.The answers are to be signed by theperson making them, and the objec-tions signed by the attorney makingthem.

(3) The party upon whom the inter-rogatories have been served shall servea copy of the answers, and objections ifany, on all parties to the proceedingunder the schedule established pursu-ant to § 502.201. The presiding officer,for good cause, may limit service of an-swers.

(b) Objections to interrogatories. All ob-jections to interrogatories shall be re-solved at the conference or meetingprovided for under § 502.201(f) or, if cir-cumstances warrant, by such otherprocedure as the presiding officer mayestablish. Written replies to objectionsto interrogatories shall be permittedonly to the extent that the discoveryschedule previously established under§ 502.201(d) is not delayed.

(c) Scope, time, number and use. (1) In-terrogatories may relate to any mat-ters which can be inquired into under§ 502.201(h), and the answers may beused to the same extent as provided in§ 502.209 for the use of the deposition ofa party.

(2) Interrogatories may be soughtafter interrogatories have been an-swered, but the presiding officer, onmotion of the deponent or the party in-terrogated, may make such protectiveorder as justice may require.

(3) The number of interrogatories orof sets of interrogatories to be served isnot limited except as justice requiresto protect the party from annoyance,expense, embarrassment, or oppression.

(4) An interrogatory otherwise properis not necessarily objectionable merelybecause an answer to the interrogatoryinvolves an opinion or contention thatrelates to fact or the application of lawto fact, but the presiding officer mayorder that such an interrogatory neednot be answered until after designateddiscovery has been completed or until aprehearing conference or other latertime.

(d) Option to produce business records.Where the answer to an interrogatorymay be derived or ascertained from thebusiness records of the party uponwhom the interrogatory has beenserved or from an examination, auditor inspection of such business records,or from a compilation, abstract orsummary based thereon, and the bur-den of deriving or ascertaining the an-swer is substantially the same for theparty serving the interrogatory as forthe party served, it is a sufficient an-swer to such interrogatory to specifythe records from which the answer maybe derived or ascertained and to affordto the party serving the interrogatoryreasonable opportunity to examine,audit or inspect such records and to


66

46 CFR Ch. IV (10–1–96 Edition)§ 502.206

make copies, compilations, abstractsor summaries. [Rule 205.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

§ 502.206 Production of documents andthings and entry upon land for in-spection and other purposes.

(a) Scope. Any party may serve, pur-suant to subpart H of this part, on anyother party a request (1) to produceand permit the party making the re-quest, or someone acting on its behalf,to inspect and copy any designateddocuments (including writings, draw-ings, graphs, charts, photographs,sound or video recordings, and otherdata compilations from which informa-tion can be obtained, translated, if nec-essary, by the respondent through de-tection devices into reasonably usableform), or to inspect and copy, test, orsample any tangible things which con-stitute or contain matters within thescope of § 502.203(a) and which are inthe possession, custody or control ofthe party upon whom the request isserved; or (2) to permit entry upon des-ignated land or other property in thepossession or control of the party uponwhom the request is served for the pur-pose of inspection and measuring, sur-veying, photographing, testing, or sam-pling the property of any designatedobject or operation thereon, within thescope of § 502.203(a).

(b) Procedure. The request shall setforth the items to be inspected eitherby individual item or by category, anddescribe each item and category withreasonable particularity. The requestshall specify a reasonable time, place,and manner of making the inspectionand performing the related acts. Re-sponses shall be served under theschedule established pursuant to§ 502.201. The response shall state, withrespect to each item or category, thatinspection and related activities willbe permitted as requested, unless therequest is objected to, in which eventthe reasons for objection shall be stat-ed. Objections to requests for produc-tion of documents shall be resolved atthe conference or meeting requiredunder § 502.201(f) or, if circumstanceswarrant, by such other procedure asthe presiding officer may establish.Written replies to objections to re-

quests for production of documentsshall be permitted only to the extentthat the discovery schedule previouslyestablished under § 502.201(d) is not de-layed. [Rule 206.]

§ 502.207 Requests for admission.(a)(1) A party may serve, pursuant to

subpart H of this part, upon any otherparty a written request for the admis-sion, for purposes of the pending actiononly, of the truth of any matters with-in the scope of § 502.203(a) set forth inthe request that relate to statementsor opinions of fact or of the applicationof law to fact, including the genuine-ness of any documents described in therequest. Copies of documents shall beserved with the request unless theyhave been or are otherwise furnished ormade available for inspection andcopying. Any party desiring to serve arequest as provided by this sectionmust comply with the applicable provi-sions of § 502.201.

(2)(i) Each matter of which an admis-sion is requested shall be separately setforth.

(ii) The matter is admitted unless,within thirty (30) days after service ofthe request, or within such shorter orlonger time as the presiding officermay allow pursuant to § 502.201, theparty to whom the request is directedserves upon the party requesting theadmission a written answer or objec-tion addressed to the matter, signed bythe party or the party’s attorney. If ob-jection is made, the reasons thereforshall be stated. The answer shall spe-cifically deny the matter or set forthin detail the reasons why the answer-ing party cannot truthfully admit ordeny the matter. A denial shall fairlymeet the substance of the requested ad-mission, and when good faith requiresthat a party qualify the answer or denyonly a part of the matter of which anadmission is requested, the party shallspecify so much of it as is true andqualify or deny the remainder.

(iii) An answering party may not givelack of information or knowledge as areason for failure to admit or deny un-less the party states that reasonableinquiry has been made and that the in-formation known or readily obtainableis insufficient to enable the party toadmit or deny. A party who considers


67


that a matter of which an admissionhas been requested presents a genuineissue for trial may not, on that groundalone, object to the request; a partymay, subject to the provisions of§ 502.207(c) deny the matter or set forthreasons why it cannot be admitted ordenied.

(3) The party who has requested ad-missions may request rulings on thesufficiency of the answers or objec-tions. Rulings on such requests shall beissued at a conference called under§ 502.201(f) or, if circumstances warrant,by such other procedure as the presid-ing officer may establish. Unless thepresiding officer determines that anobjection is justified, the presiding of-ficer shall order that an answer beserved. If the presiding officer deter-mines that an answer does not complywith the requirements of this rule, thepresiding officer may order either thatthe matter is admitted or that anamended answer be served. The presid-ing officer may, in lieu of these orders,determine that final disposition of therequest be made at a prehearing con-ference or at a designated time prior tohearing.

(b) Effect of admission. Any matter ad-mitted under this rule is conclusivelyestablished unless the presiding officeron motion permits withdrawal oramendment when the presentation ofthe merits of the action will be sub-served thereby and the party who ob-tained the admission fails to satisfythe presiding officer that withdrawalor amendment will be prejudicial inmaintaining the party’s action or de-fense on the merits. Any admissionmade by a party under this rule is forthe purpose of the pending proceedingonly and is not an admission for anyother purpose, nor may it be usedagainst the party in any other proceed-ing.

(c) Expenses on failure to admit. If aparty fails to admit the genuineness ofany document or the truth of any mat-ter as requested under paragraph (a) ofthis section, and if the party request-ing the admission thereafter proves thegenuineness of the document or thetruth of the matter, that party mayapply to the presiding officer for anorder requiring the other party to paythe reasonable expenses incurred in

making that proof, including reason-able attorney’s fees. Such applicationmust be made to the presiding officerbefore issuance of the initial decisionin the proceeding. The presiding officershall make the order unless it is foundthat:

(1) The request was held objection-able pursuant to paragraph (a) of thissection, or

(2) The admission sought was of nosubstantial importance, or

(3) The party failing to admit hadreasonable ground to believe that itmight prevail on the matter, or

(4) There was other good reason forthe failure to admit. [Rule 207.]

§ 502.208 Use of discovery proceduresdirected to Commission staff per-sonnel.

(a) Discovery procedures described in§§ 502.202, 502.203, 502.204, 502.205, 502.206,and 502.207, directed to Commissionstaff personnel shall be permitted andshall be governed by the procedures setforth in those sections except as modi-fied by paragraphs (b) and (c) of thissection. All notices to take deposi-tions, written interrogatories, requestsfor production of documents and otherthings, requests for admissions, andany motions in connection with theforegoing, shall be served on the Sec-retary of the Commission.

(b) The General Counsel shall des-ignate an attorney to represent anyCommission staff personnel to whomany discovery requests or motions aredirected. The attorney so designatedshall not thereafter participate in theCommission’s decision-making processconcerning any issue in the proceeding.

(c) Rulings of the presiding officer is-sued under paragraph (a) of this sectionshall become final rulings of the Com-mission unless an appeal is filed withinten (10) days after date of issuance ofsuch rulings or unless the Commissionon its own motion reverses, modifies,or stays such rulings within twenty (20)days of their issuance. Replies to ap-peals may be filed within ten (10) days.No motion for leave to appeal is nec-essary in such instances and no rulingof the presiding officer shall be effec-tive until twenty (20) days from date ofissuance unless the Commission other-wise directs. [Rule 208.]


68

46 CFR Ch. IV (10–1–96 Edition)§ 502.209

§ 502.209 Use of depositions at hear-ings.

(a) General. At the hearing, any partor all of a deposition, so far as admissi-ble under the rules of evidence, may beused against any party who waspresent or represented at the taking ofthe deposition or who had due noticethereof in accordance with any one ofthe following provisions:

(1) Any deposition may be used byany party for the purpose of con-tradicting or impeaching the testi-mony of deponent as a witness.

(2) The deposition of a party or ofanyone who at the time of taking thedeposition was an officer, director, orduly authorized agent of a public orprivate corporation, partnership, or as-sociation which is a party, may be usedby any other party for any purpose.

(3) The deposition of a witness,whether or not a party, may be used byany party for any purpose if the presid-ing officer finds:

(i) That the witness is dead; or(ii) That the witness is out of the

United States unless it appears thatthe absence of the witness was pro-cured by the party offering the deposi-tions; or

(iii) That the witness is unable to at-tend or testify because of age, sickness,infirmity, or imprisonment; or

(iv) That the party offering the depo-sition has been unable to procure theattendance of the witness by subpoena;or

(v) Upon application and notice, thatsuch exceptional circumstances existas to make it desirable, in the interestof justice and with due regard to theimportance of presenting the testi-mony of witnesses orally in open hear-ing, to allow the deposition to be used.

(4) If only part of a deposition is of-fered in evidence by a party, any otherparty may require introduction of allof it which is relevant to the part in-troduced, and any party may introduceany other parts.

(5) Substitution of parties does notaffect the right to use depositions pre-viously taken; and, when a proceedingin any hearing has been dismissed andanother proceeding involving the samesubject matter is afterward brought be-tween the same parties or their rep-resentatives or successors in interest,

all depositions lawfully taken and dulyfiled in the former proceeding may beused in the latter as if originally takentherefor.

(b) Objections to admissibility. (1) Ex-cept as otherwise provided in this para-graph, objection may be made at thehearing to receiving in evidence anydeposition or part thereof for any rea-son which would require the exclusionof the evidence if the witness were thenpresent and testifying.

(2) Objections to the competency of awitness or to the competency, rel-evancy, or materiality of testimonyare not waived by failure to make thembefore or during the taking of the depo-sition, unless the ground of the objec-tion is one which might have been ob-viated or removed if presented at thetime.

(3) Errors and irregularities occur-ring at the oral examination in themanner of taking the deposition, in theform of the questions or answers, inthe oath or affirmation, or in the con-duct of parties and errors of any kindwhich might be obviated, removed, orcured if promptly presented, are waivedunless reasonable objection thereto ismade at the taking of the deposition.

(4) Objections to the form of writteninterrogatories submitted under§ 502.204 are waived unless served inwriting upon the party propoundingthem within the time allowed for serv-ing the succeeding cross interrog-atories.

(c) Effect of taking or using depositions.A party shall not be deemed to make aperson its own witness for any purposeby taking such person’s deposition. Theintroduction in evidence of the deposi-tion or any part thereof for any pur-pose other than that of contradictingor impeaching the deponent makes thedeponent the witness of the party in-troducing the deposition, but this shallnot apply to the use by any other partyof a deposition as described in para-graph (a)(3) of this section. At thehearing, any party may rebut anyrelevent evidence contained in a depo-sition whether introduced by it or byany other party. [Rule 209.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]


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§ 502.210 Refusal to comply with or-ders to answer or produce docu-ments; sanctions; enforcement.

(a) Sanctions for failure to comply withorder. If a party or an officer or dulyauthorized agent of a party refuses toobey an order requiring such party toanswer designated questions or toproduce any document or other thingfor inspection, copying orphotographing or to permit it to bedone, the presiding officer may makesuch orders in regard to the refusal asare just, and among others, the follow-ing:

(1) An order that the matters regard-ing which the order was made or anyother designated facts shall be taken tobe established for the purposes of theaction in accordance with the claim ofthe party obtaining the order;

(2) An order refusing to allow the dis-obedient party to support or opposedesignated claims or defenses, or pro-hibiting the disobedient party from in-troducing designated matters in evi-dence or an order that with respect tomatters regarding which the order wasmade or any other designated fact, in-ferences will be drawn adverse to theperson or party refusing to obey suchorder;

(3) An order striking out pleadings orparts thereof, or staying further pro-ceedings until the order is obeyed, ordismissing the action or proceeding orany party thereto, or rendering ajudgement by default against the dis-obedient party.

(b) Enforcement of orders and subpenas.In the event of refusal to obey an orderor failure to comply with a subpena,the Attorney General at the request ofthe Commission, or any party injuredthereby may seek enforcement by aUnited States district court having ju-risdiction over the parties. Any actionwith respect to enforcement of subpe-nas or orders relating to depositions,written interrogatories, or other dis-covery matters shall be taken withintwenty (20) days of the date of refusalto obey or failure to comply. A privateparty shall advise the Commission five(5) days (excluding Saturdays, Sundaysand legal holidays) before applying tothe court of its intent to seek enforce-ment of such supenas and discovery or-ders.

(c) Persons and documents located in aforeign country. Orders of the presidingofficer directed to persons or docu-ments located in a foreign countryshall become final orders of the Com-mission unless an appeal to the Com-mission is filed within ten (10) daysafter date of issuance of such orders orunless the Commission on its own mo-tion reverses, modifies, or stays suchrulings within twenty (20) days of theirissuance. Replies to appeals may befiled within ten (10) days. No motionfor leave to appeal is necessary in suchinstances and no orders of the presid-ing officer shall be effective until twen-ty (20) days from date of issuance un-less the Commission otherwise directs.[Rule 210.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

Subpart M—Briefs; Requests forFindings; Decisions; Exceptions

§ 502.221 Briefs; requests for findings.

(a) The presiding officer shall fix thetime and manner of filing briefs andany enlargement of time. The period oftime allowed shall be the same for allparties unless the presiding officer, forgood cause shown, directs otherwise.

(b) Briefs shall be served upon allparties pursuant to subpart H of thispart.

(c) In investigations instituted on theCommission’s own motion, the presid-ing officer may require the Bureau ofEnforcement to file a request for find-ings of fact and conclusions within areasonable time prior to the filing ofbriefs. Service of the request shall be inaccordance with the provisions of sub-part H of this part.

(d) Unless otherwise ordered by thepresiding officer, opening or initialbriefs shall contain the following mat-ters in separately captioned sections:(1) Introductory section describing thenature and background of the case, (2)proposed findings of fact in seriallynumbered paragraphs with reference toexhibit numbers and pages of the tran-script, (3) argument based upon prin-ciples of law with appropriate citationsof the authorities relied upon, and (4)conclusions.


70

46 CFR Ch. IV (10–1–96 Edition)§ 502.222

(e) All briefs shall contain a subjectindex or table of contents with pagereferences and a list of authoritiescited.

(f) The presiding officer may limitthe number of pages to be contained ina brief. [Rule 221.]

[49 FR 44369, Nov. 6, 1984, as amended at 61FR 51233, Oct. 1, 1996]

§ 502.222 Requests for enlargement oftime for filing briefs.

Requests for enlargement of timewithin which to file briefs shall con-form to the requirements of § 502.102.Except for good cause shown, such re-quests shall be filed and served pursu-ant to subpart H of this part not laterthan five (5) days before the expirationof the time fixed for the filing of thebriefs. [Rule 222.]

§ 502.223 Decisions—administrativelaw judges.

To the administrative law judges isdelegated the authority to make andserve initial or recommended decisions.[Rule 223.]

§ 502.224 Separation of functions.The separation of functions as re-

quired by 5 U.S.C. 554(d) shall be ob-served in proceedings under subparts Ato Q inclusive, of this part. [Rule 224.]

§ 502.225 Decisions—contents andservice.

All initial, recommended, and finaldecisions will include a statement offindings and conclusions, as well as thereasons or basis therefor, upon all thematerial issues of fact, law, or discre-tion presented on the record, and theappropriate rule, order, sanction, re-lief, or denial thereof. A copy of eachdecision when issued shall be served onthe parties to the proceeding. In pro-ceedings involving overcharge claims,the presiding officer may, where appro-priate, require that the carrier publishnotice in its tariff of the substance ofthe decision. This provision shall alsoapply to decisions issued pursuant tosubpart T of this part. [Rule 225.]

§ 502.226 Decision based on official no-tice; public documents.

(a) Official notice may be taken ofsuch matters as might be judicially no-

ticed by the courts, or of technical orscientific facts within the generalknowledge of the Commission as an ex-pert body, provided, that where a deci-sion or part thereof rests on the officialnotice of a material fact not appearingin the evidence in the record, the factof official notice shall be so stated inthe decision, and any party, upon time-ly request, shall be afforded an oppor-tunity to show the contrary.

(b) Whenever there is offered in evi-dence (in whole or in part) a public doc-ument, such as an official report, deci-sion, opinion, or published scientific oreconomic statistical data issued by anyof the executive departments (or theirsubdivisions), legislative agencies orcommittees, or administrative agen-cies of the Federal Government (in-cluding Government-owned corpora-tions), or a similar document issued bya state or its agencies, and such docu-ment (or part thereof) has been shownby the offeror to be reasonably avail-able to the public, such document neednot be produced or marked for identi-fication, but may be offered in evidenceas a public document by specifying thedocument or relevant part thereof.[Rule 226.]

§ 502.227 Exceptions to decisions or or-ders of dismissal of administrativelaw judges; replies thereto; and re-view of decisions or orders of dis-missal by Commission.

(a)(1) Within twenty-two (22) daysafter date of service of the initial deci-sion, unless a shorter period is fixedunder § 502.103, any party may file amemorandum excepting to any conclu-sions, findings, or statements con-tained in such decision, and a brief insupport of such memorandum. Such ex-ceptions and brief shall constitute onedocument, shall indicate with particu-larity alleged errors, shall indicatetranscript page and exhibit numberwhen referring to the record, and shallbe served on all parties pursuant tosubpart H of this part.

(2) Any adverse party may file andserve a reply to such exceptions withintwenty-two (22) days after the date ofservice thereof, which shall contain ap-propriate transcript and exhibit ref-erences.

(3) Whenever the officer who presidedat the reception of the evidence, or


71


other qualified officer, makes an initialdecision, such decision shall becomethe decision of the Commission thirty(30) days after date of service thereof(and the Secretary shall so notify theparties), unless within such 30-day pe-riod, or greater time as enlarged by theCommission for good cause shown, re-quest for review is made in exceptionsfiled or a determination to review ismade by the Commission on its owninitiative.

(4) Upon the filing of exceptions to,or review of, an initial decision, suchdecision shall become inoperative untilthe Commission determines the mat-ter.

(5) Where exceptions are filed to, orthe Commission reviews, an initial de-cision, the Commission, except as itmay limit the issues upon notice or byrule, will have all the powers which itwould have in making the initial deci-sion. Whenever the Commission shalldetermine to review an initial decisionon its own initiative, notice of such in-tention shall be served upon the par-ties.

(6) The time periods for filing excep-tions and replies to exceptions, pre-scribed by this section, shall not applyto proceedings conducted under §§ 502.67and 502.75.

(b)(1) If an administrative law judgehas granted a motion for dismissal ofthe proceeding in whole or in part, anyparty desiring to appeal must file suchappeal no later than twenty-two (22)days after service of the ruling on themotion in question.

(2) Any adverse party may file andserve a reply to an appeal under thisparagraph within twenty-two (22) daysafter the appeal is served.

(3) The denial of a petition to inter-vene or withdrawal of a grant of inter-vention shall be deemed to be a dismis-sal within the meaning of this para-graph.

(c) Whenever an administrative lawjudge orders dismissal of a proceedingin whole or in part, such order, in theabsence of appeal, shall become theorder of the Commission thirty (30)days after date of service of such order(and the Secretary shall so notify theparties), unless within such 30-day pe-riod the Commission decides to reviewsuch order on its own motion, in which

case notice of such intention shall beserved upon the parties.

(d) The Commission shall not, on itsown initiative, review any initial deci-sion or order of dismissal unless suchreview is requested by an individualCommissioner. Any such request mustbe transmitted to the Secretary withinthirty (30) days after date of service ofthe decision or order. Such requestshall be sufficient to bring the matterbefore the Commission for review.[Rule 227.]


§ 502.228 Request for enlargement oftime for filing exceptions and re-plies thereto.

Requests for enlargement of timewithin which to file exceptions, andbriefs in support thereof, or replies toexceptions shall conform to the appli-cable provisions of § 502.102. Requestsfor extensions of these periods will begranted only under exceptional cir-cumstances duly demonstrated in therequest. Except for good cause shown,such requests shall be filed and servednot later than five (5) days before theexpiration of the time fixed for the fil-ing of such documents. Any enlarge-ment of time granted will automati-cally extend by the same period thedate for the filing of notice or reviewby the Commission. [Rule 228.]

§ 502.229 Certification of record bypresiding or other officer.

The presiding or other officer shallcertify and transmit the entire recordto the Commission when (a) exceptionsare filed or the time therefor has ex-pired, (b) notice is given by the Com-mission that the initial decision will bereviewed on its own initiative, or (c)the Commission requires the case to becertified to it for initial decision. [Rule229.]

§ 502.230 Reopening by presiding offi-cer or Commission.

(a) Motion to reopen. At any timeafter the conclusion of a hearing in aproceeding, but before issuance by thepresiding officer of a recommended orinitial decision, any party to the pro-ceeding may file with the presiding of-ficer a motion to reopen the proceeding


72

46 CFR Ch. IV (10–1–96 Edition)§ 502.241

for the purpose of receiving additionalevidence. A motion to reopen shall beserved in conformity with the require-ments of subpart H and shall set forththe grounds requiring reopening of theproceeding, including material changesof fact or of law alleged to have oc-curred since the conclusion of the hear-ing.

(b) Reply. Within ten (10) days follow-ing service of a motion to reopen, anyparty may reply to such motion.

(c) Reopening by presiding officer. Atany time prior to filing his or her deci-sion, the presiding officer upon his orher own motion may reopen a proceed-ing for the reception of further evi-dence.

(d) Reopening by the Commission.Where a decision has been issued by thepresiding officer or where a decision bythe presiding officer has been omitted,but before issuance of a Commissiondecision, the Commission may, afterpetition and reply in conformity withparagraphs (a) and (b) of this section,or upon its own motion, reopen a pro-ceeding for the purpose of taking fur-ther evidence.

(e) Remand by the Commission. Noth-ing contained in this rule shall pre-clude the Commission from remandinga proceeding to the presiding officer forthe taking of additional evidence or de-termining points of law. [Rule 230.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

Subpart N—Oral Argument;Submission for Final Decision

§ 502.241 Oral argument.(a) The Commission may hear oral

argument either on its own motion orupon the written request of a party. Iforal argument before the Commissionis desired on exceptions to an initial orrecommended decision, or on a motion,petition, or application, a requesttherefor shall be made in writing. Anyparty may make such a request irre-spective of its filing exceptions under§ 502.227. If a brief on exceptions is filed,the request for oral argument shall beincorporated in such brief. Requests fororal argument on any motion, petition,or application shall be made in the mo-tion, petition, or application, or in the

reply thereto. If the Commission deter-mines to hear oral argument, a noticewill be issued setting forth the order ofpresentation and the amount of timeallotted to each party.

(b)(1) Requests for oral argument willbe granted or denied in the discretionof the Commission.

(2) Parties requesting oral argumentshall set forth the specific issues theypropose to address at oral argument.

(c) Those who appear before the Com-mission for oral argument shall confinetheir argument to points of controllingimportance raised on exceptions or re-plies thereto. Where the facts of a caseare adequately and accurately dealtwith in the initial or recommended de-cision, parties should, as far as pos-sible, address themselves in argumentto the conclusions.

(d) Effort should be made by partiestaking the same position to agree inadvance of the argument upon thosepersons who are to present their side ofthe case, and the names of such personsand the amount of time requestedshould be received by the Commissionnot later than ten (10) days before thedate set for the argument. The fewerthe number of persons making the ar-gument the more effectively can theparties’ interests be presented in thetime allotted. [Rule 241.]

[49 FR 44369, Nov. 6, 1984, as amended at 52FR 4144, Feb. 10, 1987]

§ 502.242 Submission to Commissionfor final decision.

A proceeding will be deemed submit-ted to the Commission for final deci-sion as follows: (a) If oral argument ishad, the date of completion thereof, orif memoranda on points of law are per-mitted to be filed after argument, thelast date of such filing; (b) if oral argu-ment is not had, the last date when ex-ceptions or replies thereto are filed, orif exceptions are not filed, the expira-tion date for such exceptions; (c) in thecase of an initial decision, the date ofnotice of the Commission’s intentionto review the decision, if such notice isgiven. [Rule 242.]

§ 502.243 Participation of absent Com-missioner.

Any Commissioner who is notpresent at oral argument and who is


73

Federal Maritime Commission Pt. 502, Subpt O, Exh. I

otherwise authorized to participate ina decision shall participate in makingthat decision after reading the tran-script of oral argument unless he orshe files in writing an election not toparticipate. [Rule 243.]

Subpart O—Reparation§ 502.251 Proof on award of repara-

tion.If many shipments or points of origin

or destination are involved in a pro-ceeding in which reparation is sought(See § 502.63), the Commission will de-termine in its decision the issues as toviolations, injury to complainant, andright to reparation. If complainant isfound entitled to reparation, the par-ties thereafter will be given an oppor-tunity to agree or make proof respect-ing the shipments and pecuniaryamount of reparation due before theorder of the Commission awarding rep-aration is entered. In such cases,freight bills and other exhibits bearingon the details of all shipments, and theamount of reparation on each, need notbe produced at the original hearing un-less called for or needed to developother pertinent facts. [Rule 251.]

§ 502.252 Reparation statements.When the Commission finds that rep-

aration is due, but that the amountcannot be ascertained upon the recordbefore it, the complainant shall imme-diately prepare a statement in accord-ance with the approved reparationstatement in Exhibit No. 1 to this sub-part, showing details of the shipmentson which reparation is claimed. Thisstatement shall not include any ship-ments not covered by the findings ofthe Commission. Complainant shallforward the statement, together withthe paid freight bills on the shipments,or true copies thereof, to the respond-ent or other person who collected thecharges for checking and certificationas to accuracy. Statements so preparedand certified shall be filed with theCommission for consideration in deter-mining the amount of reparation due.Disputes concerning the accuracy ofamounts may be assigned for con-ference by the Commission, or in itsdiscretion referred for further hearing.[Rule 252.]

§ 502.253 Inerest in reparation pro-ceedings.

Except as to applications for refundor waiver of freight charges under§ 502.92 and claims which are settled byagreement of the parties, and absentfraud or misconduct of a party, inter-est granted on awards of reparation incomplaint proceedings instituted underthe Shipping Act of 1984, the ShippingAct, 1916, and the Intercoastal Ship-ping Act, 1933, will accrue from thedate of injury to the date specified inthe Commission order awarding repara-tion. Compounding will be daily fromthe date of injury to the date specifiedin the Commission order awarding rep-aration. Normally, the date specifiedwithin which payment must be madewill be fifteen (15) days subsequent tothe date of service of the Commissionorder.

(a) On awards of reparation grantedunder the Shipping Act of 1984, or theShipping Act, 1916, interest shall becomputed on the basis of the averagemonthly secondary market rate on six-month U.S.Treasury bills commencingwith the rate for the month that theinjury occurred and concluding withthe latest available monthly U.S.Treasury bill rate at the date of theCommission order awarding reparation.The monthly secondary market rateson six-month U.S. Treasury bills forthe reparation period will be summedup and divided by the number ofmonths for which interest rates areavailable in the reparation period todetermine the average interest rate ap-plicable during the period.

(b) On refunds ordered under section3(c)(2) and awards of reparation grant-ed under section 4 of the IntercoastalShipping Act, 1933 interest shall becomputed on the basis of the average ofthe prime rate charged by major banks,as published by the Board of Governorsof the Federal Reserve System duringthe period to which the reparation ap-plies. (Rule 253.)

[56 FR 47001, Sept. 17, 1991]

Pt. 502, Subpt O, Exh. I Attorney’s feesin reparation proceedings.

(a) Scope. Except for proceedingsunder subpart S of this part, the Com-mission shall, upon petition, award the


74

46 CFR Ch. IV (10–1–96 Edition)Pt. 502, Subpt O, Exh. I

complainant reasonable attorney’s feesdirectly related to obtaining a repara-tions award in any complaint proceed-ing under section 11 of the ShippingAct of 1984. For purposes of this sec-tion, ‘‘attorney’s fees’’ includes the fairmarket value of the services of anyperson permitted to appear and prac-tice before the Commission in accord-ance with subpart B of this part, andmay include compensation for servicesrendered the complainant in a relatedproceeding in Federal court that is use-ful and necessary to the determinationof a reparations award in the com-plaint proceeding.

(b) Content of petitions. Petitons forattorney’s fees under this section shallspecify the number of hours claimed byeach person representing the complain-ant at each identifiable stage of theproceeding, and shall be supported byevidence of the reasonableness of hoursclaimed and the customary feescharged by attorneys and associatedlegal representative in the communitywhere the petitioner practices. Re-quests for additional compensationmust be supported by evidence that thecustomary fees for the hours reason-ably expended on the case would resultin an unreasonable fee award.

(c) Filing of petition. (1) Petitions forattorney’s fees shall be filed within 30days of a final reparation award:

(i) With the presiding officer wherethe presiding officer’s decision award-ing reparations became administra-tively final pursuant to § 502.227(a)(3) ofthis part; or

(ii) With the Commission, if excep-tions were filed to, or the Commissionreviewed, the presiding officer’s repara-tion award decision pursuant to§ 502.227 of this part.

(2) For purposes of this section, a rep-aration award shall be considered finalafter a decision disposing of the meritsof a complaint is issued and the timefor the filing of court appeals has runor after a court appeal has terminated.

(d) Replies to petitions. Within 20 daysof filing of the petition, a reply to thepetition may be filed by the respond-ent, addressing the reasonableness ofany aspect of the petitioner’s claim. Arespondent may also suggest adjust-ments to the claim under the criteriastated in paragraph (b) of this section.

(e) Ruling on petitions. Upon consider-ation of a petition and any reply there-to, the Commission or the presiding of-ficer shall issue an order stating thetotal amount of attorney’s fees award-ed. The order shall specify the hoursand rate of compensation foundawardable and shall explain the basisfor any additional adjustments. Anaward order shall be served within 60days of the date of the filing of thereply to the petition or expiration ofthe reply period; except that in casesinvolving a substantial dispute of factscritical to the award determination,the Commission or presiding officermay hold a hearing on such issues andextend the time for issuing a fee awardorder by an additional 30 days. TheCommission or the presiding officermay adopt a stipulated settlement ofattorney’s fees.

(f) In cases where the presiding offi-cer issues an award order, appeal ofthat order and Commission review ofthat order in the absence of appealshall be governed by the procedures of§ 502.227 of this part. [Rule 254.]

[52 FR 6331, Mar. 3, 1987, as amended at 58 FR27211, May 7, 1993]


75

Federal Maritime Commission Pt. 502, Subpt O, Exh. I

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76

46 CFR Ch. IV (10–1–96 Edition)§ 502.261

Subpart P—Reconsideration ofProceedings

§ 502.261 Petitions for reconsiderationand stay.

(a) Within thirty (30) days after issu-ance of a final decision or order by theCommission, any party may file a peti-tion for reconsideration. Such petitionshall be limited to 25 pages in lengthand shall be served in conformity withthe requirements of subpart H of thispart. A petition will be subject to sum-mary rejection unless it:

(1) Specifies that there has been achange in material fact or in applicablelaw, which change has occurred afterissuance of the decision or order;

(2) Identifies a substantive error inmaterial fact contained in the decisionor order; or

(3) Addresses a finding, conclusion orother matter upon which the party hasnot previously had the opportunity tocomment or which was not addressedin the briefs or arguments of anyparty. Petitions which merely elabo-rate upon or repeat arguments madeprior to the decision or order will notbe received. A petition shall be verifiedif verification of the original pleadingis required and shall not operate as astay of any rule or order of the Com-mission.

(b) A petition for stay of a Commis-sion order which directs the dis-continuance of statutory violationswill not be received.

(c) The provisions of this section arenot applicable to decisions issued pur-suant to subpart S of this part. [Rule261.]


§ 502.262 Reply to petition for recon-sideration or stay.

Any party may file a reply in opposi-tion to a petition for reconsiderationor stay within fifteen (15) days afterthe date of service of the petition in ac-cordance with § 502.74. The reply shallbe limited to 25 pages in length andshall be served in conformity with sub-part H of this part. [Rule 262.]

[58 FR 27211, May 7, 1993]

Subpart Q—Schedules and Forms§ 502.271 Schedule of information for

presentation in regulatory cases.The following approved forms and il-

lustrative wording for use in Commis-sion proceedings appear in this part asfollows:

(a) Notice of appearance. Exhibit No. 1to Subpart B (following § 502.32).

(b) Certification. Certification of non-disclosure by persons requesting under-lying data from carriers filing generalrate increase or decrease (§ 502.67(a)(3)).

(c) Complaint. Exhibit No. 1 to Sub-part E (following § 502.75).

(d) Verification. See complaint formin Exhibit No. 1 to Subpart E (follow-ing § 502.75).

(e) Answer to complaint. Exhibit No. 2to Subpart E (following § 502.75).

(f) Petition for leave to intevene. Ex-hibit No. 3 to Subpart E (following§ 502.75).

(g) Special docket application. ExhibitNo. 1 to Subpart F (following § 502.95).

(h) Certificate of service. § 502.117 (Sub-part H). See also § 502.320 for smallclaims.

(i) Reparation statement. Where theCommission finds reparation is due butthat the amount cannot be ascertained:Exhibit No. 1 to Subpart O (following§ 502.253).

(j) Small claim form for informal adju-dication. Exhibit No. 1 to Subpart S(following § 502.305).

(k) Respondent’s consent form for infor-mal adjudication. Exhibit No. 2 to Sub-part S (following § 502.305). [Rule 271.]

Subpart R—NonadjudicatoryInvestigations

§ 502.281 Investigational policy.The Commission has extensive regu-

latory duties under the various acts itis charged with administering. Theconduct of investigations is essentialto the proper exercise of the Commis-sion’s regulatory duties. It is the pur-pose of this subpart to establish proce-dures for the conduct of such investiga-tions which will insure protection ofthe public interest in the proper and ef-fective administration of the law. TheCommission encourages voluntary co-operation in its investigations wheresuch can be effected without delay or


77


without prejudice to the public inter-est. The Commission may, in any mat-ter under investigation, invoke any orall of the compulsory processes author-ized by law. [Rule 281.]

§ 502.282 Initiation of investigations.Commission inquiries and nonadju-

dicatory investigations are originatedby the Commission upon its own mo-tion when in its discretion the Com-mission determines that information isrequired for the purposes of rule-making or is necessary or helpful inthe determination of its policies or thecarrying out of its duties, includingwhether to institute formal proceed-ings directed toward determiningwhether any of the laws which theCommission administers have been vio-lated. [Rule 282.]

§ 502.283 Order of investigation.When the Commission has deter-

mined that an investigation is nec-essary, an Order of Investigation shallbe issued. [Rule 283.]

§ 502.284 By whom conducted.Investigations are conducted by Com-

mission representatives designated andduly authorized for the purpose. (See§ 502.25.) Such representatives are au-thorized to exercise the duties of theiroffice in accordance with the laws ofthe United States and the regulationsof the Commission, including the re-sort to all compulsory processes au-thorized by law, and the administra-tion of oaths and affirmances in anymatters under investigation by theCommission. [Rule 284.]

§ 502.285 Investigational hearings.(a) Investigational hearings, as dis-

tinguished from hearings in adjudica-tory proceedings, may be conducted inthe course of any investigation under-taken by the Commission, including in-quiries initiated for the purpose of de-termining whether or not a person iscomplying with an order of the Com-mission.

(b) Investigational hearings may beheld before the Commission, one ormore of its members, or a duly des-ignated representative, for the purposeof hearing the testimony of witnessesand receiving documents and other

data relating to any subject under in-vestigation. Such hearings shall bestenographically reported and a tran-script thereof shall be made a part ofthe record of investigation. [Rule 285.]

§ 502.286 Compulsory process.

The Commission, or its designatedrepresentative may issue orders or sub-penas directing the person namedtherein to appear before a designatedrepresentative at a designated timeand place to testify or to produce docu-mentary evidence relating to any mat-ter under investigation, or both. Suchorders and subpenas shall be served inthe manner provided in § 502.134. [Rule286.]

§ 502.287 Depositions.The Commission, or its duly author-

ized representative, may order testi-mony to be taken by deposition in anyinvestigation at any stage of such in-vestigation. Such depositions may betaken before any person designated bythe Commission having the power toadminister oaths. Such testimony shallbe reduced to writing by the persontaking the deposition or under his orher direction, and shall then be sub-scribed by the deponent. Any personmay be compelled to appear and be de-posed and to produce evidence in thesame manner as witnesses may be com-pelled to appear and testify andproduce documentary evidence as pro-vided in § 502.131. [Rule 287.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

§ 502.288 Reports.The Commission may issue an order

requiring a person to file a report oranswers in writing to specific questionsrelating to any matter under investiga-tion. [Rule 288.]

§ 502.289 Noncompliance with inves-tigational process.

In case of failure to comply withCommission investigational processes,appropriate action may be initiated bythe Commission, including actions forenforcement by the Commission or theAttorney General and forfeiture of pen-alties or criminal actions by the Attor-ney General. [Rule 289.]


78

46 CFR Ch. IV (10–1–96 Edition)§ 502.290

§ 502.290 Rights of witness.

Any person required to testify or tosubmit documentary evidence shall beentitled to retain or, on payment oflawfully prescribed cost, procure acopy of any document produced bysuch person and of his or her own testi-mony as stenographically reported or,in the depositions, as reduced to writ-ing by or under the direction of theperson taking the deposition. Anyparty compelled to testify or toproduce documentary evidence may beaccompanied and advised by counsel,but counsel may not, as a matter orright, otherwise participate in the in-vestigation. [Rule 290.]

§ 502.291 Nonpublic proceedings.

Unless otherwise ordered by the Com-mission, all investigatory proceedingsshall be nonpublic. [Rule 291.]

Subpart S—Informal Procedure forAdjudication of Small Claims

§ 502.301 Statement of policy.

(a) Section 11(a) of the Shipping Actof 1984 permits any person to file acomplaint with the Commission claim-ing a violation occurring in connectionwith the foreign commerce of the Unit-ed States and to seek reparation forany injury caused by that violation.

(b) Section 22 of the Shipping Act,1916, permits any person to file a com-plaint against any common carrier bywater in interstate and offshore domes-tic commerce or against any other per-son subject to the Shipping Act, 1916,or the Intercoastal Shipping Act, 1933,claiming a violation of those statutesand to seek reparation for that viola-tion.

(c) With the consent of both parties,claims filed under this subpart in theamount of $10,000 or less will be re-ferred to the Commission’s InformalDockets Activity for adjudication anddecision by its Settlement Officerswithout the necessity of formal pro-ceedings under the rules of this part.

(d) Determination of claims underthis subpart shall be administrativelyfinal and conclusive. [Rule 301.]

§ 502.302 Limitations of actions.(a) Claims alleging violations of the

Shipping Act of 1984 must be filed with-in three years from the time the causeof action accrues.

(b) Claims alleging violations of theShipping Act, 1916, or IntercoastalShipping Act, 1933, must be filed withintwo years from the time the cause ofaction arises.

(c) A claim is deemed filed on thedate it is received by the Commission.[Rule 302.]


§ 502.304 Procedure and filing fee.(a) A sworn claim under this subpart

shall be filed in the form prescribed inExhibit No. 1 to this subpart. Three (3)copies of this claim must be filed, to-gether with the same number of copiesof such supporting documents as maybe deemed necessary to establish theclaim. Copies of tariff pages need notbe filed; reference to such tariffs or topertinent parts thereof will be suffi-cient. Supporting documents may con-sist of affidavits, correspondence, billsof lading, paid freight bills, export dec-larations, dock or wharf receipts, or ofsuch other documents as, in the judg-ment of the claimant, tend to establishthe claim. The Settlement Officer may,if deemed necessary, request additionaldocuments or information from claim-ants. Claimant may attach a memoran-dum, brief or other document contain-ing discussion, argument, or legal au-thority in support of its claim. If aclaim filed under this subpart involvesany shipment which has been the sub-ject of a previous claim filed with theCommission, formally or informally,full reference to such previous claimmust be given.

(b) Claims under this subpart shall beaddressed to the Office of the Sec-retary, Federal Maritime Commission,Washington, DC 20573. Such claimsshall be accompanied by remittance ofa $68 filing fee.

(c) Each claim under this subpartwill be acknowledged with a referenceto the Informal Docket Number as-signed. The number shall consist of anumeral(s) followed by capital ‘‘I’’ inparentheses. All further correspond-ence pertaining to such claims must


79

Federal Maritime Commission Pt. 502, Subpt. S, Exh. 1

refer to the assigned Informal DocketNumber. If the documents filed fail toestablish a claim for which relief maybe granted, the parties affected will beso notified in writing. The claimantmay thereafter, but only if the periodof limitation has not run, resubmit itsclaim with such additional proof asmay be necessary to establish theclaim. In the event a complaint hasbeen amended because it failed to statea claim upon which relief may begranted, it will be considered as a newcomplaint.

(d) A copy of each claim filed underthis subpart, with attachments, shallbe served by the Settlement Officer onthe respondent involved.

(e) Within twenty-five (25) days fromthe date of service of the claim, the re-spondent shall serve upon the claimantand file with the Commission its re-sponse to the claim, together with anindication, in the form prescribed inExhibit No. 2 to this subpart, as towhether the informal procedure pro-vided in this subpart is consented to.Failure of the respondent to indicaterefusal or consent in its response willbe conclusively deemed to indicatesuch consent. The response shall con-sist of documents, arguments, legal au-thorities, or precedents, or any othermatters considered by the respondentto be a defense to the claim. The Set-tlement Officer may request the re-spondent to furnish such further docu-ments or information as deemed nec-essary, or he or she may require theclaimant to reply to the defenses raisedby the respondent.

(f) If the respondent refuses to con-sent to the claim being informally ad-judicated pursuant to this subpart, theclaim will be considered a complaintunder § 502.311 and will be adjudicatedunder subpart T of this part.

(g) Both parties shall promptly beserved with the Settlement Officer’sdecision which shall state the basisupon which the decision was made.Where appropriate, the Settlement Of-ficer may require that the respondentpublish notice in its tariff of the sub-stance of the decision. This decisonshall be final, unless, within thirty (30)days from the date of service of the de-cision, the Commission exercises itsdiscretionary right to review the deci-

sion. The Commission shall not, on itsown initiative, review any decision ororder of dismissal unless such review isrequested by an individual Commis-sioner. Any such request must betransmitted to the Secretary withinthirty (30) days after date of service ofthe decision or order. Such requestshall be sufficient to bring the matterbefore the Commission for review.

(h) Within thirty (30) days after serv-ice of a final decision by a SettlementOfficer, any party may file a petitionfor reconsideration. Such petition shallbe directed to the Settlement Officerand shall act as a stay of the review pe-riod prescribed in paragraph (g) of thissection. A petition will be subject tosummary rejection unless it: (1) Speci-fies that there has been a change inmaterial fact or in applicable law,which change has occurred after issu-ance of the decision or order; (2) identi-fies a substantive error in material factcontained in the decision or order; (3)addresses a material matter in the Set-tlement Officer’s decision upon whichthe petitioner has not previously hadthe opportunity to comment. Petitionswhich merely elaborate upon or repeatarguments made prior to the decisionor order will not be received. Upon is-suance of a decision or order on recon-sideration by the Settlement Officer,the review period prescribed in para-graph (g) of this section will recom-mence. [Rule 304.]


§ 502.305 Applicability of other rules ofthis part.

Except as specifically provided inthis subpart, the Rules in subparts Athrough Q, inclusive, of this part donot apply to situations covered by thissubpart. [Rule 305.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

EXHIBIT NO. 1 TO SUBPART S[§ 502.304(a)]—SMALL CLAIM FORMFOR INFORMAL ADJUDICATION ANDINFORMATION CHECKLIST

Federal Maritime Commission, Washington, DC.

Informal Docket No.———————————————————————————(Claimant)


80

46 CFR Ch. IV (10–1–96 Edition)Pt. 502, Subpt. S, Exh. 1

vs.————————————————————————(Respondent)

I. The claimant is [state in this paragraphwhether claimant is an association, corpora-tion, firm or partnership, and if a firm orpartnership, the names of the individualscomposing the same. State the nature andprincipal place of business.]

II. The respondent named above is [state inthis paragraph whether respondent is an as-sociation, corporation, firm or partnership,and if a firm or partnership, the names of theindividuals composing the same. State thenature and principal place of business.]

III. That [state in this and subsequentparagraphs to be lettered A, B, etc., the mat-ters that gave rise to the claim. Name spe-cifically each rate, charge, classification,regulation or practice which is challenged.Refer to tariffs, tariff items or rules, oragreement numbers, if known. If claim isbased on the fact that a firm is a commoncarrier, state where it is engaged in trans-portation by water and which statute(s) it issubject to under the jurisdiction of the Fed-eral Maritime Commission].

IV. If claim is for overcharges, state com-modity, weight and cube, origin, destination,bill of lading description, bill of lading num-ber and date, rate and/or charges assessed,date of delivery, date of payment, by whompaid, rate or charge claimed to be correctand amount claimed as overcharges. [Specifytariff item for rate or charge claimed to beproper].

V. State section of statute claimed to havebeen violated. (Not required if claim is forovercharges).

VI. State how claimant was injured andamount of damages requested.

VII. The undersigned authorizes the Settle-ment Officer to determine the above-statedclaim pursuant to the informal procedureoutlined in subpart S (46 CFR 502.301–502.305)of the Commission’s informal procedure foradjudication of small claims subject to dis-cretionary Commission review.

Attach memorandum or brief in support ofclaim. Also attach bill of lading, copies ofcorrespondence or other documents in sup-port of claim.

————————————————————————(Date)————————————————————————(Claimant’s signature)————————————————————————(Claimant’s address)————————————————————————(Signature of agent or attorney)————————————————————————(Agent’s or attorney’s address)

Verification

State of ———, County of ———, ss: ———,being first duly sworn on oath deposes andsays that he or she is————————————————————————

The claimant [or if a firm, association, orcorporation, state the capacity of the affi-ant] and is the person who signed the fore-going claim, that he or she has read the fore-going and that the facts set forth withoutqualification are true and that the factsstated therein upon information receivedfrom others, affiant believes to be true.————————————————————————

Subscribed and sworn to before me, a notarypublic in and for the State of ———, Countyof ———, this —— day of ——— 19—. (Seal)————————————————————————

(Notary Public)

My Commission expires, ——————————

Information To Assist in Filing InformalComplaints

Informal Docket procedures are limited toclaims of $10,000 or less and are appropriateonly in instances when an evidentiary hear-ing on disputed facts is not necessary.Where, however, a respondent elects not toconsent to the informal procedures [See Ex-hibit No. 2 to subpart S], the claim will beadjudicated by an administrative law judgeunder subpart T of Part 502.

Under the Shipping Act of 1984 [for foreigncommerce], the claim must be filed withinthree (3) years from the time the cause of ac-tion accrues and may be brought against anyperson alleged to have violated the 1984 Actto the injury of claimant.

Under the Shipping Act, 1916 and the Inter-coastal Shipping Act, 1933 [domestic com-merce], the claim must be filed within two(2) years from the time the cause of actionaccrues and may only be brought against a‘‘person subject to the Act’’, e.g., a commoncarrier, terminal operator or freight for-warder.

A violation of a specific section of a par-ticular shipping statute must be alleged.

The format of Exhibit No. 1 must be fol-lowed and a verification must be included.(See §§ 502.21–502.32, 502.112, and 502.304.) Anoriginal and two (2) copies of the claim andall attachments, including a brief in supportof the claim, must be submitted.



81


EXHIBIT NO. 2 TO SUBPART S[§ 502.304(e)]—RESPONDENT’S CON-SENT FORM FOR INFORMAL ADJU-DICATION

Federal Maritime Commission, Washington, DC.

Informal Docket No. ———

Respondent’s Affidavit

I authorize the Settlement Officer to deter-mine the above-numbered claim in accord-ance with subpart S (46 CFR 502) of the Com-mission’s informal procedure for adjudica-tion of small claims subject to discretionaryCommission Review.

(Date) ————————————————————

(Signed) ———————————————————

(Capacity) ——————————————————

Verification

State of ———, County of ———, ss: ———,being first duly sworn on oath deposes andsays that he or she is ———, (Title or Posi-tion) and is the person who signed the fore-going and agrees without qualification to itstruth.————————————————————————

Subscribed and sworn to before me, a no-tary public in and for the State of ———,County of ———, this —— day of ———, 19—.(Seal)

————————————————————————(Notary Public)

My Commission expires. ——————————

Certificate of Service [See § 502.320]

Subpart T—Formal Procedure forAdjudication of Small Claims

§ 502.311 Applicability.In the event the respondent elects

not to consent to determination of theclaim under subpart S of this part, itshall be adjudicated by the administra-tive law judges of the Commissionunder procedures set forth in this sub-part, if timely filed under § 502.302. Thepreviously assigned Docket Numbershall be used except that it shall nowbe followed by capital ‘‘F’’ instead of‘‘I’’ in parentheses (See § 502.304(c)).The complaint shall consist of the doc-uments submitted by the claimantunder subpart S of this part. [Rule 311.]

§ 502.312 Answer to complaint.The respondent shall file with the

Commission an answer within twenty-

five (25) days of service of the com-plaint and shall serve a copy of said an-swer upon complainant. The answershall admit or deny each matter setforth in the complaint. Matters notspecifically denied will be deemed ad-mitted. Where matters are urged in de-fense, the answer shall be accompaniedby appropriate affidavits, other docu-ments, and memoranda. [Rule 312.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

§ 502.313 Reply of complainant.Complainant may, within twenty (20)

days of service of the answer filed byrespondent, file with the Commissionand serve upon the respondent a replymemorandum accompanied by appro-priate affidavits and supporting docu-ments. [Rule 313.]

§ 502.314 Additional information.The administrative law judge may re-

quire the submission of additional affi-davits, documents, or memoranda fromcomplainant or respondent. [Rule 314.]

§ 502.315 Request for oral hearing.In the usual course of disposition of

complaints filed under this subpart, nooral hearing will be held, but, the ad-ministrative law judge, in his or herdiscretion, may order such hearing. Arequest for oral hearing may be incor-porated in the answer or in complain-ant’s reply to the answer. Requests fororal hearing will not be entertained un-less they set forth in detail the reasonswhy the filing of affidavits or otherdocuments will not permit the fair andexpeditious disposition of the claim,and the precise nature of the factssought to be proved at such oral hear-ing. The administrative law judge shallrule upon a request for oral hearingwithin ten (10) days of its receipt. Inthe event an oral hearing is ordered, itwill be held in accordance with therules applicable to other formal pro-ceedings, as set forth in subparts Athrough Q of this part. [Rule 315.]

[49 FR 44369, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

§ 502.316 Intervention.Intervention will ordinarily not be

permitted. [Rule 316.]


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46 CFR Ch. IV (10–1–96 Edition)§ 502.317

§ 502.317 Oral argument.No oral argument will be held unless

otherwise directed by the administra-tive law judge. [Rule 317.]

§ 502.318 Decision.(a) The decision of the administra-

tive law judge shall be final, unless,within twenty-two (22) days from thedate of service of the decision, eitherparty requests review of the decisionby the Commission, asserting asgrounds therefor that a material find-ing of fact or a necessary legal conclu-sion is erroneous or that prejudicialerror has occurred, or unless, withinthirty (30) days from the date of serviceof the decision, the Commission exer-cises its discretionary right to reviewthe decision. The Commission shallnot, on its own initiative, review anydecision or order of dismissal unlesssuch review is requested by an individ-ual Commissioner. Any such requestmust be transmitted to the Secretarywithin thirty (30) days after date ofservice of the decision or order. Suchrequest shall be sufficient to bring thematter before the Commission for re-view. [Rule 318.]

(b) If the complainant is awarded rep-arations pursuant to section 11 of theShipping Act of 1984, attorney’s feesshall also be awarded in accordancewith § 502.254 of this part. [Rule 318.]

[49 FR 44369, Nov. 6, 1984, as amended at 52FR 6332, Mar. 3, 1987]

§ 502.319 Date of service and computa-tion of time.

The date of service of documentsserved by the Commission shall be thatwhich is shown in the service stampthereon. The date of service of docu-ments served by parties shall be thedate when the matter served is mailedor delivered in person, as the case maybe. When the period of time prescribedor allowed is ten (10) days or less, in-termediate Saturdays, Sundays, andholidays shall be excluded from thecomputation. [Rule 319.]

§ 502.320 Service.All claims, resubmitted claims, peti-

tions to intervene and rulings thereon,notices of oral hearings, notices of oralarguments (if necessary), decisions of

the administrative law judge, noticesof review, and Commission decisionsshall be served by the administrativelaw judge or the Commission. All otherpleadings, documents and filings shall,when tendered to the Commission, evi-dence service upon all parties to theproceeding. Such certificate shall be insubstantially the following form:


I hereby certify that I have this day servedthe foregoing document upon all parties ofrecord in this proceeding by [mailing, deliv-ering to courier, or delivering in person], acopy to each such person in sufficient timeto reach such person on the date the docu-ment is due to be filed with the Commission.

Dated at ——— this ——— day of ———,19—.

(Signature) —————————————————

(For) ————————————————————

[Rule 320.]

§ 502.321 Applicability of other rules ofthis part.

Except as specifically provided inthis subpart, rules in subparts Athrough Q, inclusive, of this part donot apply to situations covered by thissubpart. [Rule 321.]

Subpart U—Conciliation Service

§ 502.401 Definitions.

For purposes of this subpart:(a) Disputes means disagreements be-

tween two or more parties arising fromthe transportation of goods or the per-formance of services in connectionwith such transportation in the domes-tic offshore commerce or the foreigncommerce of the United States; a dif-ference of opinion regarding the inter-pretation of any tariff, rate, rule, orregulation; a disagreement regardingthe performance of any service in con-nection with such transportation; adisagreement with respect to an al-leged violation of the shipping stat-utes; and other disagreement or oppos-ing opinion regarding any matter con-nected with transportation of cargoesin the waterborne commerce of theUnited States. This definition is lim-ited to those disputes which fall withinthe jurisdiction of the Federal Mari-time Commission.


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(b) Shipping statutes means the Ship-ping Act of 1984, 46 U.S.C. app. 1701–1720; Shipping Act, 1916, 46 U.S.C. app.801 et seq.; Merchant Marine Act, 1936,46 U.S.C. app. 1101 et seq.; MerchantMarine Act, 1920, 46 U.S.C. app. 861 etseq., the Intercoastal Shipping Act,1933, 46 U.S.C. app. 843 et seq.; andamendments of and Acts relating tothe foregoing, to the extent of the Fed-eral Maritime Commission’s jurisdic-tion under such Acts.

(c) Advisory opinions means non-bind-ing conclusions reached by a concilia-tor on the basis of oral presentationand/or documentary authority.

(d) Domestic offshore commerce meanswaterborne common carriage between:

(1) The Continental United Statesand Alaska or Hawaii;

(2) Alaska and Hawaii;(3) The United States or the District

of Columbia and any territory, com-monwealth, possession or district (ex-cluding the District of Columbia);

(4) Any territory, commonwealth,possession or district (excluding theDistrict of Columbia) and any othersuch territory, commonwealth, posses-sion or district; and

(5) Places in the same district, terri-tory, commonwealth or possession (ex-cluding the District of Columbia); andwhich are not solely engaged in trans-portation subject to the jurisdiction ofthe Interstate Commerce Commissionunder 49 U.S.C. chapter 105.

(e) Foreign commerce means water-borne common carriage between theUnited States or any of its territories,commonwealths, districts or posses-sions, and a foreign country. [Rule 401.]

§ 502.402 Policy.

It is the policy of the Federal Mari-time Commission:

(a) To offer its good offices and ex-pertise to parties to disputes involvingmatters within its jurisdiction, so as topermit resolution of such disputes withdispatch and without the necessity ofcostly and time-consuming formal pro-ceedings;

(b) To facilitate and promote the res-olution of problems and disputes by en-couraging affected parties to resolvedifferences through their own re-sources;

(c) To create a forum in which griev-ances, interpretations, problems, andquestions involving the waterbornecommerce of the United States may beaired, discussed and, hopefully, re-solved to the mutual advantage of allconcerned parties. [Rule 402.]

§ 502.403 Persons eligible for service.

Request for conciliation service maybe made by any shipper, shippers’ asso-ciation, merchant, carrier, conferenceof carriers, freight forwarder, marineterminal operator, Government agen-cy, or any other person affected by orinvolved in the transportation of goodsby common carrier in the waterbornedomestic offshore or foreign commerceof the United States. [Rule 403.]

§ 502.404 Procedure and fee.

(a) The request for conciliationshould be addressed to the FederalMaritime Commission ConciliationService, Washington, DC 20573, andshould contain the details of the dis-pute, names and addresses of all in-volved parties, the contentions of eachparty or parties, and copies of any doc-uments that are relevant to the dis-position of the issues. If the request ismade by any one party to the dispute,the party requesting conciliationshould mail or deliver to the otherparty or parties to the dispute a copyof the letter of request, with attach-ments, if any. The request shall be ac-companied by remittance of a $61 serv-ice fee.

(b) Each matter will be assigned anumber prefixed by the letters FMCCSand assigned to a conciliator for dis-position and the involved parties willbe informed of the case number and thename of the conciliator.

(c) While it is preferable that all par-ties involved in a dispute request aservice jointly, a request by a singleparty for the service will be actedupon, provided all parties agree thatthe dispute should be conciliated. Inthe event that the request is made byonly one party, the conciliator willcontact the other party or parties tothe dispute and be advised as to wheth-er such parties agree to participate inthe conciliation. If the other party orparties to the dispute do not agree to


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the Conciliation Service, no further ac-tion will be taken by the conciliatorand the conciliation ceases.

(d) The parties will be free to deter-mine the best procedures to be usedwith the qualification that the concil-iator may disapprove procedures thatwould in his or her opinion be eithertoo time-consuming or involve inordi-nate expense to the Federal MaritimeCommission. The parties may agree to(1) fix a time and place for the oralpresentation of each party’s conten-tion; and (2) request affidavits, docu-ments, or other materials that couldhelp resolve the dispute. The concilia-tor will be in a strictly advisory capac-ity. There will be no written record ofthe conciliation discussions.

(e) Participation in the conciliationof a dispute is purely voluntary at allstages and the parties involved maywithdraw at any time without preju-dice. [Rule 404.]


§ 502.405 Assignment of conciliator.

The Secretary of the Commission,giving due regard to the type and com-plexity of the problem presented andthe degree of expertise required, willassign a conciliator to each dispute.[Rule 405.]

§ 502.406 Advisory opinion.

(a) The conciliator will write an advi-sory opinion that must meet the ap-proval of all parties. If the advisoryopinion, or revision thereof requestedby one or more of the parties, is notunanimously agreed upon, then theconciliation will cease, without preju-dice to any of the parties involved. Ifunanimity is not reached, the concilia-tor will note in a report to the Com-mission, which shall be served on allparties, that the parties failed to reachagreement. Only if unanimity isreached will the informal advisoryopinion, although not binding, be sentto all interested parties and be madeavailable to the public.

(b) There will be no appeal from, orreview of, such opinions and any partymay pursue any further course of ac-tion under any other rule or statutethat it deems advisable. [Rule 406.]

Subpart V—Implementation of theEqual Access to Justice Act inCommission Proceedings

SOURCE: 52 FR 28264, July 29, 1987, unlessotherwise noted.

§ 502.501 General provisions.

(a) Purpose. The Equal Access to Jus-tice Act, 5 U.S.C. 504 (‘‘EAJA’’), pro-vides for the award of attorney fees andother expenses to eligible individualsand entities who are parties to certainadministrative proceedings (called ‘‘ad-versary adjudications’’) before the Fed-eral Maritime Commission (‘‘the Com-mission’’). An eligible party may re-ceive an award when it prevails over anagency, unless the agency’s positionwas substantially justified or specialcircumstances make an award unjust.The rules in this subpart describe theparties eligible for awards and the pro-ceedings that are covered. They alsoexplain how to apply for awards, andthe procedures and standards that theCommission will use to make them.

(b) When EAJA applies. EAJA appliesto any adversary adjudication:

(1) Pending or commenced before theCommission on or after August 5, 1985;

(2) Commenced on or after October 1,1984, and finally disposed of before Au-gust 5, 1985, provided that an applica-tion for fees and expenses, as describedin § 502.502 of this subpart, has beenfiled with the Commission within 30days after August 5, 1985; or

(3) Pending on or commenced on orafter October 1, 1981, in which an appli-cation for fees and other expenses wastimely filed and was dismissed for lackof jurisdiction.

(c) Proceedings covered. (1)(i) EAJAapplies to adversary adjudications con-ducted by the Commission under thispart. These are adjudications under 5U.S.C. 554 in which the position of thisor any other agency of the UnitedStates, or any component of any agen-cy, is presented by an attorney or otherrepresentative who enters an appear-ance and participates in the proceed-ing.

(ii) Any proceeding in which theCommission may prescribe a lawfulpresent or future rate is not covered bythe Act.


85


(iii) Proceedings to grant or renew li-censes are also excluded, but proceed-ings to modify, suspend, or revoke li-censes are covered if they are other-wise ‘‘adversary adjudications.’’

(2) The Commission’s failure to iden-tify a type of proceeding as an adver-sary adjudication shall not precludethe filing of an application by a partywho believes the proceeding is coveredby the EAJA; whether the proceedingis covered will then be an issue for res-olution in proceedings on the applica-tion.

(3) If a proceeding includes both mat-ters covered by EAJA and matters spe-cifically excluded from coverage, anyaward made will include only fees andexpenses related to covered issues.

(d) Eligibility of applicants. (1) To beeligible for an award of attorney feesand other expenses under EAJA, theapplicant must be a party to the adver-sary adjudication for which it seeks anaward. The term ‘‘party’’ is defined in5 U.S.C. 551(3). The applicant mustshow that it meets all conditions of eli-gibility set out in this section and§ 502.502.

(2) The types of eligible applicantsare:

(i) An individual with a net worth ofnot more than $2 million;

(ii) The sole owner of an unincor-porated business who has a net worthof not more than $7 million, includingboth personal and business interests,and not more than 500 employees;

(iii) A charitable or other tax-exemptorganization described in section501(c)(3) of the Internal Revenue Code(26 U.S.C. 501(c)(3)) with not more than500 employees;

(iv) A cooperative association as de-fined in section 15(a) of the Agricul-tural Marketing Act (12 U.S.C. 1141j(a))with not more than 500 employees; and

(v) Any other partnership, corpora-tion, association, unit of local govern-ment, or organization with a net worthof not more than $7 million and notmore than 500 employees.

(3) For the purpose of eligibility, thenet worth and number of employees ofan applicant shall be determined as ofthe date the proceeding was initiated.

(4) An applicant who owns an unin-corporated business will be consideredas an ‘‘individual’’ rather than a ‘‘sole

owner of an unincorporated business’’if the issues on which the applicantprevails are related primarily to per-sonal interests rather than to businessinterests.

(5) The employees of an applicant in-clude all persons who regularly per-form services for remuneration for theapplicant, under the applicant’s direc-tion and control. Part-time employeesshall be included on a proportionalbasis.

(6) The net worth and number of em-ployees of the applicant and all of itsaffiliates shall be aggregated to deter-mine eligibility. Any individual cor-poration or other entity that directlyor indirectly controls or owns a major-ity of the voting shares or other inter-ests of the applicant, or any corpora-tion or other entity of which the appli-cant directly or indirectly owns or con-trols a majority of the voting shares orother interests, will be considered anaffiliate for purposes of this subpart,unless the adjudicative officer deter-mines that such treatment would beunjust and contrary to the purposes ofEAJA in light of the actual relation-ship between the affiliated entities. Inaddition, the adjudicative officer maydetermine that financial relationshipsof the applicant other than those de-scribed in this paragraph constitutespecial circumstances that would makean award unjust.

(7) An applicant that participates ina proceeding primarily on behalf of oneor more other persons or entities thatwould be ineligible is not itself eligiblefor an award.

(e) Standards for awards. (1) A prevail-ing applicant may receive an award forfees and expenses incurred in connec-tion with a proceeding or in a signifi-cant and discrete substantive portionof the proceeding, unless the positionof the agency over which the applicanthas prevailed was substantially justi-fied. The position of the agency in-cludes, in addition to the positiontaken by the agency in the adversaryadjudication, the action or failure toact by the agency upon which the ad-versary adjudication is based. The bur-den of proof that an award should notbe made to an eligible prevailing appli-cant is on agency counsel.


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(2) An award will be reduced or de-nied if the applicant has unduly or un-reasonably protracted the proceedingor if special circumstances make theaward sought unjust.

(f) Allowable fees and expenses. (1)Awards will be based on rates cus-tomarily charged by the persons en-gaged in the business of acting as at-torneys, agents and expert witnesses,even if the services were made avail-able without charge or at a reducedrate to the applicant.

(2) No award for the fee of an attor-ney or agent under this subpart mayexceed $75.00 per hour. No award tocompensate an expert witness may ex-ceed the highest rate at which theCommission pays expert witnesses.However, an award may also includethe reasonable expenses of the attor-ney, agent, or witness as a separateitem, if the attorney, agent or witnessordinarily charges clients separatelyfor such expenses.

(3) In determining the reasonablenessof the fee sought for an attorney, agentor expert witness, the adjudicative offi-cer shall consider the following:

(i) If the attorney, agent or witness isin private practice, his or her cus-tomary fees for similar services, or, ifan employee of the applicant, the fullyallocated costs of the services;

(ii) The prevailing rate for similarservices in the community in which theattorney, agent or witness ordinarilyperforms services;

(iii) The time actually spent in therepresentation of the applicant;

(iv) The time reasonably spent inlight of the difficulty or complexity ofthe issues in the proceeding; and

(v) Such other factors as may bear onthe value of the services provided.

(4) The reasonable cost of any study,analysis, engineering report, testproject or similar matter prepared onbehalf of a party may be awarded, tothe extent that the charge for the serv-ices does not exceed the prevailing ratefor similar services, and the study orother matter was necessary for prepa-ration of applicant’s case.

(g) Awards against other agencies. If anapplicant is entitled to an award be-cause it prevails over another agencyof the United States that participatesin a proceeding before the Commission

and takes a position that is not sub-stantially justified, the award or an ap-propriate portion of the award shall bemade against that agency.

§ 502.502 Information required fromapplicants.

(a) Contents of petition. (1) An applica-tion for an award of fees and expensesunder EAJA shall be by petition under§ 502.69 of this part, shall clearly indi-cate that the application is made underEAJA, and shall identify the applicantand the proceeding (including docketnumber) for which an award is sought.The application shall show that the ap-plicant has prevailed and identify theposition of an agency or agencies thatthe applicant alleges was not substan-tially justified. Unless the applicant isan individual, the application shallalso state the number of employees ofthe applicant and describe briefly thetype and purpose of its organization orbusiness.

(2) The petition shall also include astatement that the applicant’s networth does not exceed $2 million (if anindividual) or $7 million (for all otherapplicants, including their affiliates).However, an applicant may omit thisstatement if:

(i) It attaches a copy of a ruling bythe Internal Revenue Service that itqualifies as an organization describedin section 501(c)(3) of the Internal Rev-enue Code (26 U.S.C. 501(c)(3)) or, in thecase of a tax-exempt organization notrequired to obtain a ruling from the In-ternal Revenue Service on its exemptstatus, a statement that describes thebasis for the applicant’s belief that itqualifies under such section; or

(ii) It states that it is a cooperativeassociation as defined in section 15(a)of the Agricultural Marketing Act (12U.S.C. 1141j(a)).

(3) The petition shall state theamount of fees and expenses for whichan award is sought.

(4) The petition may also include anyother matters that the applicant wish-es the Commission to consider in deter-mining whether and in what amount anaward should be made.

(5) The petition shall be signed by theapplicant or an authorized officer orattorney of the applicant. It shall alsocontain or be accompanied by a written


87


verification under oath or under pen-alty of perjury that the informationprovided in the application is true andcorrect.

(b) Net worth exhibit. (1) Each appli-cant except a qualified tax-exempt or-ganization or cooperative associationmust provide with its petition a de-tailed exhibit showing the net worth ofthe applicant and any affiliates (as de-fined in § 502.501(d)(6) of this subpart)when the proceeding was initiated. Theexhibit may be in any form convenientto the applicant that provides full dis-closure of the applicant’s and its affili-ates’ assets and liabilities and is suffi-cient to determine whether the appli-cant qualifies under the standards inthis subpart. The adjudicative officermay require an applicant to file addi-tional information to determine its eli-gibility for an award.

(2) Ordinarily, the net worth exhibitwill be included in the public record ofthe proceeding. However, an applicantthat objects to public disclosure of in-formation in any portion of the exhibitand believes there are legal grounds forwithholding it from disclosure maysubmit that portion of the exhibit di-rectly to the adjudicative officer in asealed envelope labeled ‘‘ConfidentialFinancial Information,’’ accompaniedby a motion to withhold the informa-tion from public disclosure. The mo-tion shall describe the informationsought to be withheld and explain, indetail, why it falls within one or moreof the specific exemptions from manda-tory disclosure under the Freedom ofInformation Act, 5 U.S.C. 552(b)(1)–(9),why public disclosure of the informa-tion would adversely affect the appli-cant, and why disclosure is not re-quired in the public interest. The mate-rial in question shall be served oncounsel representing the agencyagainst which the applicant seeks anaward, but need not be served on anyother party to the proceeding. If theadjudicative officer finds that the in-formation should not be withheld fromdisclosure, it shall be placed in thepublic record of the proceeding. Other-wise, any request to inspect or copythe exhibit shall be disposed of in ac-cordance with the Commission’s estab-lished procedures under the Freedom of

Information Act under §§ 503.31–503.43 ofthis chapter.

(c) Documentation of fees and expenses.The petition shall be accompanied byfull documentation of the fees and ex-penses, including the cost of any study,analysis, engineering report, test,project or similar matter, for which anaward is sought. A separate itemizedstatement shall be submitted for eachprofessional firm or individual whoseservices are covered by the application,showing the hours spent in connectionwith the proceeding by each individual,a description of the specific servicesperformed, the rates at which each feehas been computed, any expenses forwhich reinbursement is sought, thetotal amount claimed, and the totalamount paid or payable by the appli-cant or by any other person or entityfor the services provided. The adjudica-tive officer may require the applicantto provide vouchers, receipts, or othersubstantiation for any expensesclaimed.

(d) When a petition may be filed. (1) Apetition may be filed whenever the ap-plicant has prevailed in the proceedingor in a significant and discrete sub-stantive portion of the proceeding, butin no case later than 30 days after theCommission’s final disposition of theproceeding.

(2) For purposes of this subpart, finaldisposition means the date on which adecision or order disposing of the mer-its of the proceeding or any other com-plete resolution of the proceeding, suchas a settlement or voluntary dismissal,becomes final and unappealable, bothwithin the Commission and to thecourts.

(3) If review or reconsideration issought or taken of a decision as towhich an applicant believes it has pre-vailed, proceedings for the award offees shall be stayed pending final dis-position of the underlying controversy.When the United States appeals the un-derlying merits of an adversary adju-dication to a court, no decision on anapplication for fees and other expensesin connection with that adversary ad-judication shall be made until a finaland unreviewable decision is renderedby the court on the appeal or until theunderlying merits of the case have


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been finally determined pursuant tothe appeal.

§ 502.503 Procedures for consideringpetitions.

(a) Filing and service of documents. (1)Any petition for an award or otherpleading or document related to a peti-tion shall be filed and served on all par-ties to the proceeding in the same man-ner as other pleadings in the proceed-ing, except as provided in § 502.502(b)(2)(confidential financial information).

(2) The petition and all other plead-ings or documents related to the peti-tion will be referred to an Administra-tive Law Judge to initially decide thematter as adjudicative officer.

(b) Reply to petition. (1) Within 30 daysafter service of a petition, counsel rep-resenting the agency against which anaward is sought may file a reply to thepetition. Unless counsel requests an ex-tension of time for filing or files astatement of intent to negotiate underparagraph (b)(2) of this section, failureto file a reply within the 30-day periodmay be treated as a consent to theaward requested.

(2) If agency counsel and the appli-cant believe that the issues in the feeapplication can be settled, they mayjointly file a statement of their intentto negotiate a settlement. The filing ofthis statement shall extend the timefor filing a reply for an additional 30days, and further extension may begranted by the adjudicative officerupon request by agency counsel andthe applicant.

(3) The reply shall explain in detailany objections to the award requestedand identify the facts relied on in sup-port of counsel’s position. If the replyis based on any alleged facts not al-ready in the record of the proceeding,agency counsel shall include with thereply either supporting affidavits or arequest for further proceedings underparagraph (f) of this section.

(c) Response to reply. Within 15 daysafter service of a reply, the applicantmay file a response. If the response isbased on any alleged facts not alreadyin the record of the proceeding, the ap-plicant shall include with the responseeither supporting affidavits or a re-quest for further proceedings underparagraph (f) of this section.

(d) Comments by other parties. Anyparty to a proceeding other than theapplicant and agency counsel may filecomments on an application within 30days after it is served, or on a reply,within 15 days after it is served. A com-menting party may not participate fur-ther in proceedings on the applicationunless the adjudicative officer deter-mines that the public interest requiressuch participation in order to permitfull exploration of matters raised inthe comments.

(e) Settlement. The applicant andagency counsel may agree on a pro-posed settlement of the award beforefinal action on the application, eitherin connection with a settlement of theunderlying proceeding, or after the un-derlying proceeding has been concludedin accordance with the rules of thissubpart pertaining to settlement. If aprevailing party and agency counselagree on a proposed settlement of anaward before a petition is filed, the pe-tition shall be filed with the proposedsettlement.

(f) Further proceedings. (1) Ordinarily,the determination of an award will bemade on the basis of the writtenrecord. However, on request of eitherthe applicant or agency counsel, or onhis or her own initiative, the adjudica-tive officer may order further proceed-ings, such as an informal conference,oral argument, additional written sub-missions or, as to issues other thansubstantial justification (such as theapplicant’s eligibility or substan-tiation of fees and expenses), pertinentdiscovery or an evidentiary hearing.Such further proceedings shall be heldonly when necessary for full and fairresolution of the issues arising fromthe application, and shall be conductedas promptly as possible. Whether ornot the position of the agency was sub-stantially justified shall be determinedon the basis of the administrativerecord, as a whole, which is made inthe adversary adjudication for whichfees and other expenses are sought.

(2) A request that the adjudicative of-ficer order further proceedings underthis section shall specifically identifythe information sought or the disputedissues and shall explain why the addi-tional proceedings are necessary to re-solve the issues.


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(g) Decision. The adjudicative officershall serve an initial decision on theapplication within 60 days after com-pletion of proceedings on the applica-tion. The decision shall include writtenfindings and conclusions on the appli-cant’s eligibility and status as a pre-vailing party, and an explanation ofthe reasons for any difference betweenthe amount requested and the amountawarded. The decision shall also in-clude, if at issue, findings on whetherthe agency’s position was substantiallyjustified, whether the applicant undulyprotracted the proceedings, or whetherspecial circumstances make an awardunjust. If the applicant has sought anaward against more than one agency,the decision shall allocate responsibil-ity for payment of any award madeamong the agencies, and shall explainthe reason for the allocation made.

(h) Commission review. Either the ap-plicant or agency counsel may seek re-view of the initial decision on the feeapplication, or the Commission maydecide to review the decision on itsown initiative, in accordance with§ 502.227 of this part. If neither the ap-plicant nor agency counsel seeks re-view and the Commission does not takereview on its own initiative, the initialdecision on the application shall be-come a final decision of the Commis-sion 30 days after it is issued. Whetherto review a decision is a matter withinthe discretion of the Commission. If re-view is taken, the Commission willissue a final decision on the applica-tion or remand the application to theadjudicative officer for further pro-ceedings.

(i) Judicial review. Judicial review offinal Commission decisions on awardsmay be sought as provided in 5 U.S.C.504(c)(2).

(j) Payment of award. (1)(i) An appli-cant seeking payment of an awardshall submit to the comptroller orother disbursing officer of the payingagency a copy of the Commission’sfinal decision granting the award, ac-companied by a certification that theapplicant will not seek review of thedecision in the United States courts.

(ii) The agency will pay the amountawarded to the applicant within 60days.

(2) Where the Federal Maritime Com-mission is the paying agency, the ap-plication for payment of award shall besubmitted to: Office of Budget and Fi-nancial Management, Federal Mari-time Commission, Washington, DC20573.

Subpart W—Compromise, Assess-ment, Mitigation, Settlement,and Collection of Civil Pen-alties

SOURCE: 49 FR 44418, Nov. 6, 1984, unlessotherwise noted. Redesignated at 58 FR 27211,May 7, 1993.

§ 502.601 Purpose and scope.The purpose of this subpart is to im-

plement the statutory provisions ofsection 32 of the Shipping Act, 1916,section 19 of the Merchant Marine Act,1920, section 13 of the Shipping Act of1984, and sections 2(c) and 3(c) of PublicLaw 89–777 by establishing rules andregulations governing the compromise,assessment, settlement and collectionof civil penalties arising under certaindesignated provisions of the ShippingAct, 1916, the Merchant Marine Act,1920, the Intercoastal Shipping Act,1933, the Shipping Act of 1984, PublicLaw 89–777, and/or any order, rule orregulation (except for procedural rulesand regulations contained in this part)issued or made by the Commission inthe exercise of its powers, duties andfunctions under those statutes.

§ 502.602 Definitions.For the purposes of this subpart:(a) Assessment means the imposition

of a civil penalty by order of the Com-mission after a formal docketed pro-ceeding.

(b) Commission means the FederalMaritime Commission.

(c) Compromise means the processwhereby a civil penalty for a violationis agreed upon by the respondent andthe Commission outside of a formal,docketed proceeding.

(d) Mitigation means the reduction, inwhole or in part, of the amount of acivil penalty.

(e) Person includes individuals, cor-porations, partnerships, and associa-tions existing under or authorized by


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46 CFR Ch. IV (10–1–96 Edition)§ 502.603

the laws of the United States or of aforeign country.

(f) Respondent means any personcharged with a violation.

(g) Settlement means the processwhereby a civil penalty or other dis-position of the case for a violation isagreed to in a formal, docketed pro-ceeding instituted by order of the Com-mission.

(h) Violation includes any violation ofsections 14 through 21 (except section16 First and Third) of the Shipping Act,1916; sections 19(6)(d), 19(7)(d) and 19(11)of the Merchant Marine Act, 1920; sec-tion 2 of the Intercoastal Shipping Act,1933; any provision of the Shipping Actof 1984; sections 2 and 3 of Public Law89–777; and/or any order, rule or regula-tion (except for procedural rules andregulations contained in this part) is-sued or made by the Commission in theexercise of its powers, duties and func-tions under the Shipping Act, 1916, theMerchant Marine Act, 1920, the Inter-coastal Shipping Act, 1933, the Ship-ping Act of 1984, or Public Law 89–777.

(i) Words in the plural form shall in-clude the singular and vice versa; andwords importing the masculine gendershall include the feminine and viceversa. The terms ‘‘includes’’ and ‘‘in-cluding’’ do not exclude matters notlisted but which are in the same gen-eral class. The word ‘‘and’’ includes‘‘or’’, except where specifically statedor where the context requires other-wise.

§ 502.603 Assessment of civil penalties:Procedure; criteria for determiningamount; limitations; relation tocompromise.

(a) Procedure for assessment of penalty.The Commission may assess a civilpenalty only after notice and oppor-tunity for hearing. Civil penalty as-sessment proceedings, including settle-ment negotiations, shall be governedby the Commission’s Rules of Practiceand Procedure in this part. All settle-ments must be approved by the Presid-ing Officer. The full text of any settle-ment must be included in the finalorder of the Commission.

(b) Criteria for determining amount ofpenalty. In determining the amount ofany penalties assessed, the Commissionshall take into account the nature, cir-

cumstances, extent and gravity of theviolation committed and the policiesfor deterrence and future compliancewith the Commission’s rules and regu-lations and the applicable statutes.The Commission shall also consider therespondent’s degree of culpability, his-tory of prior offenses, ability to payand such other matters as justice re-quires.

(c) Limitations; relation to compromise.When the Commission, in its discre-tion, determines that policy, justice orother circumstances warrant, a civilpenalty assessment proceeding may beinstituted at any time for any viola-tion which occurred within five yearsprior to the issuance of the order of in-vestigation. Such proceeding may alsobe instituted at any time after the ini-tiation of informal compromise proce-dures, except where a compromiseagreement for the same violationsunder the compromise procedures hasbecome effective under § 502.604(e).

§ 502.604 Compromise of penalties: Re-lation to assessment proceedings.

(a) Scope. Except in pending civil pen-alty assessment proceedings providedfor in § 502.603, the Commission, when ithas reason to believe a violation hasoccurred, may invoke the informalcompromise procedures of this section.

(b) Notice. When the Commission con-siders it appropriate to afford an oppor-tunity for the compromise of a civilpenalty, it will, except when otherwiseauthorized by the Commission, orwhere circumstances render it unneces-sary, send a registered or certified No-tice and Demand Letter (‘‘NDL’’) tothe respondent. The NDL will describespecific violation(s) on which the claimis based, including the particular facts,dates and other elements necessary forthe respondent to identify the specificconduct constituting the alleged viola-tion; the amount of the penalty de-manded; and the names of Commissionpersonnel with whom the demand maybe discussed, if the person desires tocompromise the penalty. The NDL alsowill state the deadlines for the institu-tion and completion of compromise ne-gotiations and the consequences of fail-ure to compromise.


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Federal Maritime Commission Pt. 502, Subpt. W, App. A

(c) Request for compromise. Any personreceiving a NDL provided for in para-graph (b) of this section may, withinthe time specified, deny the violation,or submit matters explaining, mitigat-ing or showing extenuating cir-cumstances, as well as make voluntarydisclosures of information and docu-ments.

(d) Criteria for compromise. In additionto the factors set forth in § 502.603(b), incompromising a penalty claim, theCommission may consider litigativeprobabilities, the cost of collecting theclaim and enforcement policy.

(e) Disposition of claims in compromiseprocedures. (1) When a penalty is com-promised and the respondent agrees tosettle for that amount, a compromiseagreement shall be executed. (One ex-ample of such compromise agreementis set forth as appendix A to this sub-part.) This agreement, after recitingthe nature of the claim, will include astatement evidencing the respondent’sagreement to the compromise of theCommission’s penalty claim for theamount set forth in the agreement andwill also embody an approval and ac-ceptance provision which is to besigned by the appropriate Commissionofficial. Upon compromise of the pen-alty in the agreed amount, a duplicateoriginal of the executed agreementshall be furnished to the respondent.

(2) Upon completion of the com-promise, the Commission may issue apublic notice thereof, the terms andlanguage of which are not subject tonegotiation.

(f) Relation to assessment proceedings.Except by order of the Commission, nocompromise procedure shall be initi-ated or continued after institution of aCommission assessment proceeding di-rected to the same violations. Anyoffer of compromise submitted by therespondent pursuant to this sectionshall be deemed to have been furnishedby the respondent without prejudiceand shall not be used against the re-spondent in any proceeding.

(g) Delegation of compromise authority.The compromise authority set forth inthis subpart is delegated to the Direc-tor, Bureau of Enforcement.

[49 FR 44418, Nov. 6, 1984. Redesignated at 58FR 27211, May 7, 1993, as amended at 61 FR51233, Oct. 1, 1996]

§ 502.605 Payment of penalty: Method;default.

(a) Method. Payment of penalties bythe respondent is to be made as fol-lows:

(1) By bank cashier’s check or otherinstrument acceptable to the Commis-sion;

(2) Upon execution of a promissorynote containing a confess-judgmentagreement, by periodic regular install-ments, with interest where appro-priate, by bank cashier’s check orother instrument acceptable to theCommission; or

(3) By combination of the alter-natives in paragraphs (a) (1) and (2) ofthis section.

(b) All checks or other instrumentssubmitted in payment of claims shallbe made payable to the Federal Mari-time Commission.

(c) Default in payment. Where a re-spondent fails or refuses to pay a pen-alty properly assessed under § 502.603,or compromised and agreed to under§ 502.604, appropriate collection effortswill be made by the Commission, in-cluding, but not limited to referral tothe Department of Justice for collec-tion. Where such defaulting respondentis a licensed freight forwarder, such de-fault also may be grounds for revoca-tion or suspension of the respondent’slicense, after notice and opportunityfor hearing, unless such notice andhearing have been waived by the re-spondent in writing.

APPENDIX A TO SUBPART W—EXAMPLEOF COMPROMISE AGREEMENT TO BEUSED UNDER 46 CFR 502.604

Compromise Agreement

FMC File No. llll

This Agreement is entered into between:(1) the Federal Maritime Commission,

hereinafter referred to as Commission, and(2) llllllll, hereinafter referred to

as Respondent.Whereas, the Commission is considering

the institution of an assessment proceedingagainst Respondent for the recovery of civilpenalties provided under the [appropriatestatute], for alleged violations of sectionllll;

Whereas, this course of action is the resultof practices believed by the Commission tohave been engaged in by Respondent, to wit:


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46 CFR Ch. IV (10–1–96 Edition)§ 502.991

[General description of practices and datesor time period involved]

Whereas, the Commission has authorityunder the Shipping Act of 1984 and the Ship-ping Act, 1916, to compromise and collectcivil penalties; and,

Whereas, Respondent has terminated thepractices which are the basis for the allega-tions of violation set forth herein, and hasinstituted and indicated its willingness tomaintain measures designed to eliminatethese practices by Respondent, its officers,directors or employees.

Now Therefore, in consideration of thepremises herein, and in compromise of allcivil penalties arising from the alleged viola-tions, Respondent and the Commission here-by agree upon the following terms and condi-tions of compromise and settlement:

1. Respondent shall make a monetary pay-ment to the Commission herewith, by bankcashier’s check, in the total amount of$llll.

2. Upon acceptance in writing of thisAgreement by the Director of the Bureau ofEnforcement of the Commission, this instru-ment shall forever bar the commencement orinstitution of any assessment proceeding orother claim for recovery of civil penaltiesfrom the Respondent arising from the al-leged violations set forth above.

3. It is expressly understood and agreedthat this Agreement is not, and is not to beconstrued as, an admission by Respondent tothe alleged violations set forth above.

(Respondent’s Name)By: —————————————————————Title: ————————————————————Date: ————————————————————

Approval and Acceptance

The above terms, conditions and consider-ation are hereby approved and accepted:

By the Federal Maritime Commission:

Director, Bureau of EnforcementDate: ————————————————————[49 FR 44418, Nov. 6, 1984. Redesignated at 58FR 27211, May 7, 1993, as amended at 61 FR51233, Oct. 1, 1996]

Subpart X—Paperwork ReductionAct

§ 502.991 OMB control numbers as-signed pursuant to the PaperworkReduction Act.

This section displays the controlnumbers assigned to information col-lection requirements of the Commis-sion in this part by the Office of Man-

agement and Budget (OMB) pursuantto the Paperwork Reduction Act of1980, Pub. L. 96–511. The Commissionintends that this section comply withthe Act, which requires that agenciesdisplay a current control number as-signed by the Director of OMB for eachagency information collection require-ment:

Section Current OMBcontrol no.

502.27 (Form FMC.12) .................................. 3072–0001

[49 FR 44369, Nov. 6, 1984. Redesignated at 58FR 27211, May 7, 1993]

PART 503—PUBLIC INFORMATION

Subpart A—General

Sec.503.1 Statement of policy.

Subpart B—Publication in the FederalRegister

503.11 Materials to be published.503.12 Effect of nonpublication.503.13 Incorporation by reference.

Subpart C—Commission Opinions andOrders

503.21 Public records.503.22 Current index.503.23 Effect of noncompliance.

Subpart D—Procedure Governing Avail-ability of Commission Records—Free-dom of Information Act

503.31 Records available at the Office of theSecretary.

503.32 Records generally available.503.33 Other records available upon written

request under the Freedom of Informa-tion Act.

503.34 Procedures on requests for docu-ments.

503.35 Exceptions to availability of records.503.36 Commission report of actions.

Subpart E—Fees

503.41 Policy and services available.503.42 Payment of fees and charges.503.43 Fees for services.

Subpart F—Information Security Program

503.51 Definitions.503.52 Senior agency official.503.53 Oversight Committee.503.54 Original classification.


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503.55 Derivative classification.503.56 General declassification policy.503.57 Mandatory review for declassifica-

tion.503.58 Appeals of denials of mandatory de-

classification review requests.503.59 Safeguarding classified information.

Subpart G—Access to Any Record ofIdentifiable Personal Information

503.60 Definitions.503.61 Conditions of disclosure.503.62 Accounting of disclosures.503.63 Request for information.503.64 Commission procedure on request for

information.503.65 Request for access to records.503.66 Amendment of a record.503.67 Appeals from denial of request for

amendment of a record.503.68 Exemptions.503.69 Fees.

Subpart H—Public Observation of FederalMaritime Commission Meetings andPublic Access to Information Pertain-ing to Commission Meetings

503.70 Policy.503.71 Definitions.503.72 General rule—meetings.503.73 Exceptions—meetings.503.74 Procedures for closing a portion or

portions of a meeting or a portion or por-tions of a series of meetings on agencyinitiated requests.

503.75 Procedures for closing a portion of ameeting on request initiated by an inter-ested person.

503.76 Effect of vote to close a portion orportions of a meeting or series of meet-ings.

503.77 Responsibilities of the General Coun-sel of the agency upon a request to closeany portion of any meeting.

503.78 General rule-information pertainingto meeting.

503.79 Exceptions—information pertainingto meeting.

503.80 Procedures for withholding informa-tion pertaining to meeting.

503.81 Effect of vote to withhold informa-tion pertaining to meeting.

503.82 Public announcement of agencymeeting.

503.83 Public announcement of changes inmeeting.

503.84 [Reserved]503.85 Agency recordkeeping requirements.503.86 Public access to records.503.87 Effect of provisions of this subpart on

other subparts.

AUTHORITY: 5 U.S.C. 552, 552a, 552b, 553; 31U.S.C. 9701; E.O. 12356, 47 FR 14874, 15557, 3CFR 1982 Comp., p. 167.


Subpart A—General§ 503.1 Statement of policy.

(a) The Chairman of the Federal Mar-itime Commission is responsible forthe effective administration of the pro-visions of Public Law 89–487, as amend-ed. The Chairman shall carry out thisresponsibility through the program andthe officials as hereinafter provided inthis part.

(b) In addition, the Chairman, pursu-ant to his responsibility, hereby directsthat every effort be expended to facili-tate the maximum expedited service tothe public with respect to the obtain-ing of information and records. Accord-ingly, members of the public maymake requests for information,records, decisions or submittals in ac-cordance with the provisions of § 503.31.

Subpart B—Publication in theFederal Register

§ 503.11 Materials to be published.(a) The Commission shall separately

state and concurrently publish the fol-lowing materials in the FEDERAL REG-ISTER for the guidance of the public:

(1) Descriptions of its central andfield organization and the establishedplaces at which the officers fromwhom, and the methods whereby, thepublic may secure information, makesubmittals or requests, or obtain deci-sions.

(2) Statements of the general courseand method by which its functions arechanneled and determined, includingthe nature and requirements of all for-mal and informal procedures available.

(3) Rules of procedure, descriptions offorms available or the places at whichforms may be obtained, and instruc-tions as to the scope and contents ofall papers, reports, or examinations.

(4) Substantive rules of general appli-cability adopted as authorized by law,and statements of general policy or in-terpretations of general applicabilityformulated and adopted by the agency.

(5) Every amendment, revision, or re-peal of the foregoing.

(b) The Commission’s publicationwith respect to paragraph (a)(1) of this


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46 CFR Ch. IV (10–1–96 Edition)§ 503.12

section has been and shall continue tobe by publication in the FEDERAL REG-ISTER of the Rules and Regulations,Commission Order No. 1 (Amended),and amendments and supplementsthereto.

(c) The Commission’s publicationswith respect to paragraphs (a)(2), (a)(3),and (a)(4) of this section, includingamendments, revisions, and repeals,have been and shall continue to be bypublication in the FEDERAL REGISTERas part of the Code of Federal Regula-tions, title 46, chapter IV.

§ 503.12 Effect of nonpublication.Except to the extent that a person

has actual and timely notice of theterms thereof, no person shall in anymanner be required to resort to, or beadversely affected by any matter re-quired to be published in the FEDERALREGISTER and not so published.

§ 503.13 Incorporation by reference.For purposes of this subpart, matter

which is reasonably available to theclass of persons affected hereby shallbe deemed published in the FEDERALREGISTER when incorporated by ref-erence therein with the approval of theDirector of the Office of the FEDERALREGISTER.

[49 FR 44401, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

Subpart C—Commission Opinionsand Orders

§ 503.21 Public records.(a) The Commission shall, in accord-

ance with this part, make the followingmaterials available for public inspec-tion and copying:

(1) Final opinions (including concur-ring and dissenting opinions) and allorders made in the adjudication ofcases.

(2) Those statements of policy and in-terpretations which have been adoptedby the Commission.

(3) Administrative staff manuals andinstructions to staff that affect anymember of the public.

(b) To prevent unwarranted invasionof personal privacy, the Commissionmay delete identifying details when itmakes available or publishes an opin-

ion, statement of policy, interpreta-tion, or staff manual or instruction,and shall, in each case, explain in writ-ing the justification for the deletion.

§ 503.22 Current index.The Commission shall maintain and

make available for public inspectionand copying a current index providingidentifying information for the publicas to any matter which is issued,adopted, or promulgated, and which isrequired by subpart B of this part to bemade available or published. The indexshall be available at the Office of theSecretary, Washington, DC 20573. Pub-lication of such indices has been deter-mined by the Commission to be unnec-essary and impracticable. The indicesshall, nonetheless, be provided to anymember of the public at a cost not inexcess of the direct cost of duplicationof any such index upon request thereformade in accordance with subpart D ofthis part.

§ 503.23 Effect of noncompliance.No final order, opinion, statement of

policy, interpretation, or staff manualor instruction that affects any memberof the public will be relied upon, used,or cited, as precedent by the Commis-sion against any private party unless ithas been indexed and either madeavailable or published as provided bythis subpart, or unless that privateparty shall have actual and timely no-tice of the terms thereof.

Subpart D—Procedure GoverningAvailability of CommissionRecords—Freedom of Infor-mation Act

§ 503.31 Records available at the Officeof the Secretary.

The following records are availablefor inspection and copying at the Fed-eral Maritime Commission, Office ofthe Secretary, Washington, DC 20573,without the requirement of a writtenrequest. Access to requested recordsmay be delayed if they have been sentto archives.

(a) Proposed and final rules and regu-lations of the Commission includinggeneral substantive rules and state-ments of policy and interpretations.


95


1 Copies of transcripts may be purchasedfrom the reporting company contracted forby the Commission. Contact the Office of theSecretary for the name and address of thiscompany.

(b) Rules of Practice and Procedure.(c) Reports of decisions (including

concurring and dissenting opinions),orders and notices in all formal pro-ceedings and pertinent correspondence.

(d) Official docket files (transcripts,exhibits, briefs, etc.) in all formal pro-ceedings,1 except for materials whichare the subject of a protective order.

(e) Correspondence to or from theCommission or Administrative LawJudges concerning docketed proceed-ings.

(f) Press releases.(g) Approved summary minutes of

Commission actions showing finalvotes, except for minutes of closedCommission meetings which are notavailable until the Commission pub-licly announces the results of such de-liberations.

(h) Annual reports of the Commis-sion.

[55 FR 38329, Sept. 18, 1990]

§ 503.32 Records generally available.

The following Commission recordsare generally available for inspectionand copying, without resort to Free-dom of Information Act procedures,upon request in writing addressed tothe Office of the Secretary:

(a) Agreements filed and in effectpursuant to section 15 of the ShippingAct, 1916 and sections 5 and 6 of theShipping Act of 1984.

(b) Agreements filed under section 15of the Shipping Act, 1916 and section 5of the Shipping Act of 1984 which havebeen noticed in the FEDERAL REGISTER.

(c) Tariffs filed under the provisionsof the Shipping Act, 1916, the Inter-coastal Shipping Act, 1933, and theShipping Act of 1984.

(d) Terminal tariffs filed pursuant topart 514 of this chapter.

(e) List of certifications of financialresponsibility pertaining to Public Law89–777.

(f) List of licensed ocean freight for-warders.

[49 FR 44401, Nov. 6, 1984, as amended at 55FR 38330, Sept. 18, 1990; 60 FR 27229, May 23,1995]

§ 503.33 Other records available uponwritten request under the Freedomof Information Act.

(a) A member of the public who re-quests permission to inspect, copy orbe provided with any Commissionrecords not described in §§ 503.31 and503.32 shall:

(1) Submit such request in writing tothe Secretary, Federal Maritime Com-mission, Washington, DC 20573. Anysuch request shall be clearly markedon the exterior with the letters FOIA;and

(2) Reasonably describe the record orrecords sought.

(b) The Secretary shall evaluate eachrequest in conjunction with the officialhaving responsibility for the subjectmatter area and the General Counsel,and the Secretary shall determinewhether or not to grant the request inaccordance with the provisions of§§ 503.34 and 503.35.

[55 FR 38330, Sept. 18, 1990]

§ 503.34 Procedures on requests fordocuments.

(a) Determination of compliance withrequests for documents. (1) Upon requestby any member of the public for docu-ments, made in accordance with therules of this part, the Commission’sSecretary or his or her delegate in hisor her absence, shall determine wheth-er or not such request shall be granted.

(2) Except as provided in paragraph(c) of this section, such determinationshall be made by the Secretary withinten (10) days (excluding Saturdays,Sundays and legal public holidays)after receipt of such request.

(3) The Secretary shall immediatelynotify the party making such requestof the determination made, the reasonstherefor, and, in the case of a denial ofsuch request, shall notify the party ofits right to appeal that determinationto the Chairman.

(b) Appeals from adverse determination(denial of request). (1) Any party whoserequest for documents or other infor-mation pursuant to this part has been


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46 CFR Ch. IV (10–1–96 Edition)§ 503.35

denied in whole or in part by the Sec-retary may appeal such determination.Any such appeal shall be addressed to:Chairman, Federal Maritime Commis-sion, Washington, DC 20573, and shallbe submitted within a reasonable timefollowing receipt by the party of notifi-cation of the initial denial by the Sec-retary in the case of a total denial ofthe request, or within a reasonabletime following request, or within a rea-sonable time following receipt of anyof the records requested in the case ofa partial denial. In no case shall an ap-peal be filed later than ten (10) workingdays following receipt of notificationof denial or receipt of a part of therecords requested.

(2) Upon appeal from any denial orpartial denial of a request for docu-ments by the Secretary, the Chairmanof the Federal Maritime Commission,or the Chairman’s specific delegate inhis or her absence, shall make a deter-mination with respect to that appealwithin twenty (20) days (excepting Sat-urdays, Sundays and legal public holi-days) after receipt of such appeal, ex-cept as provided in paragraph (c) ofthis section. If, on appeal, the denial isupheld, either in whole or in part, theChairman shall so notify the party sub-mitting the appeal and shall notifysuch person of the provisions of para-graph 4 of subsection (a) of the FOIA(Pub. L. 93–502, 88 Stat. 1561–1562, No-vember 21, 1974) regarding judicial re-view of such determination upholdingthe denial. Notification shall also in-clude the statement that the deter-mination is that of the Chairman ofthe Federal Maritime Commission andthe name of the Chairman.

(c) Exception to time limitation. In un-usual circumstances, as specified inthis paragraph, the time limits pre-scribed with respect to initial actionsor actions on appeal may be extendedby written notice from the Secretary ofthe Commission to the person makingsuch request, setting forth the reasonsfor such extension and the date onwhich a determination is expected tobe dispatched. No such notice shallspecify a date that would result in anextension for more than ten (10) work-ing days. As used in this paragraph, un-usual circumstances means, but only tothe extent reasonably necessary to the

proper processing of the particular re-quest—

(1) The need to search for and collectthe requested records from field facili-ties or other establishments that areseparate from the office processing therequest;

(2) The need to search for, collect,and appropriately examine a volumi-nous amount of separate and distinctrecords which are demanded in a singlerequest; or

(3) The need for consultation, whichshall be conducted with all practicablespeed, with another agency having asubstantial interest in the determina-tion of the request or among two ormore components of the agency havingsubstantial subject matter interesttherein.

(d) Effect of failure by Commission tomeet the time limitation. Failure by theCommission either to deny or grantany request for documents within thetime limits prescribed by FOIA (5U.S.C. 552, as amended) and these regu-lations shall be deemed to be an ex-haustion of the administrative rem-edies available to the person makingthe request.

[49 FR 44401, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984]

§ 503.35 Exceptions to availability ofrecords.

(a) Except as provided in paragraph(b) of this section, the followingrecords shall not be available:

(1) Records specifically authorizedunder criteria established by Executiveorder to be kept secret in the interestof national defense or foreign policyand which are in fact properly classi-fied pursuant to such Executive order.Records to which this provision appliesshall be deemed by the Commission tohave been properly classified. This ex-ception may apply to records in thecustody of the Commission which havebeen transmitted to the Commission byanother agency which has designatedthe record as nonpublic under Execu-tive order.

(2) Records related solely to the in-ternal personnel rules and practices ofthe Commission. Such records relate to


97


those matters which are for the guid-ance of Commission personnel with re-spect to their employment with theFederal Maritime Commission.

(3) Records specifically exemptedfrom disclosure by statute.

(4) Information given in confidence.This includes information obtained byor given to the Commission which con-stitutes trade secrets, confidentialcommercial or financial information,privileged information, or other infor-mation which was given to the Com-mission in confidence or would not cus-tomarily be released by the personfrom whom it was obtained.

(5) Interagency or intraagencymemoranda or letters which would notbe available by law to a private partyin litigation with the Commission.Such communications include inter-agency memoranda, drafts, staffmemoranda transmitted to the Com-mission, written communications be-tween the Commission, the Secretary,and the General Counsel, regarding thepreparation of Commission orders anddecisions, other documents received orgenerated in the process of issuing anorder, decision, or regulation, and re-ports and other work papers of staff at-torneys, accountants, and investiga-tors.

(6) Personnel and medical files andsimilar files, the disclosure of whichwould constitute a clearly unwarrantedinvasion of privacy. This exemption in-cludes all personnel and medicalrecords and all private, personal, finan-cial, or business information containedin other files which, if disclosed to thepublic, would invade the privacy of anyperson, including members of the fam-ily of the person to whom the informa-tion pertains.

(7) Records or information compiledfor law enforcement purposes, but onlyto the extent that the production ofsuch law enforcement records or infor-mation:

(i) Could reasonably be expected tointerfere with enforcement proceed-ings;

(ii) Would deprive a person of a rightto a fair trial or an impartial adjudica-tion;

(iii) Could reasonably be expected toconstitute an unwarranted invasion ofpersonal privacy;

(iv) Could reasonably be expected todisclose the identity of a confidentialsource, including a State, local, or for-eign agency or authority or any pri-vate institution which furnished infor-mation on a confidential basis, and, inthe case of a record or informationcompiled by a criminal law enforce-ment authority in the course of acriminal investigation, or by an agencyconducting a lawful national securityintelligence investigation, informationfurnished by a confidential source;

(v) Would disclose techniques andprocedures for law enforcement inves-tigations or prosecutions, or would dis-close guidelines for law enforcementinvestigations or prosecutions if suchdisclosure could reasonably be ex-pected to risk circumvention of thelaw; or

(vi) Could reasonably be expected toendanger the life or physical safety ofany individual.

(b) Nothing in this section authorizeswithholding of information or limitingthe availability of records to the publicexcept as specifically stated in thispart, nor shall this part be authority towithhold information from Congress.

(c) Whenever a request is made whichinvolves access to records described inparagraph (a)(7)(i) of this section andthe investigation or proceeding in-volves a possible violation of criminallaw; and there is reason to believe thatthe subject of the investigation or pro-ceeding is not aware of its pendency,and disclosure of the existence of therecords could reasonably be expected tointerfere with enforcement proceed-ings, the Commission may, during onlysuch time as that circumstance contin-ues, treat the records as not subject tothe requirements of 5 U.S.C. 552 andthis subpart.

[49 FR 44401, Nov. 6, 1984; 49 FR 47394, Dec. 4,1984, as amended at 52 FR 13682, Apr. 24, 1987]

§ 503.36 Commission report of actions.

On or before March 1 of each calendaryear, the Federal Maritime Commis-sion shall submit a report of its activi-ties with regard to public informationrequests during the preceding calendaryear to the Speaker of the House ofRepresentatives and to the President ofthe Senate. This report shall include:


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46 CFR Ch. IV (10–1–96 Edition)§ 503.41

(a) The number of determinationsmade by the Federal Maritime Com-mission not to comply with requestsfor records made to the agency underthe provisions of this part and the rea-sons for each such determination.

(b) The number of appeals made bypersons under such provisions, the re-sult of such appeals, and the reasonsfor the action upon each appeal thatresults in a denial of information.

(c) The name and title or position ofeach person responsible for the denialof records requested under the provi-sions of this part and the number of in-stances of participation for each.

(d) The results of each proceedingconducted pursuant to subsection(a)(4)(F) of FOIA, as amended Novem-ber 21, 1974, including a report of thedisciplinary action taken against theofficer or employee who was primarilyresponsible for improperly withholdingrecords or an explanation of why dis-ciplinary action was not taken.

(e) A copy of every rule made by theCommission implementing the provi-sions of the FOIA, as amended Novem-ber 21, 1974.

(f) A copy of the fee schedule and thetotal amount of fees collected by theagency for making records availableunder this section.

(g) Such other information as indi-cates efforts to administer fully theprovisions of the FOIA, as amended.

Subpart E—Fees§ 503.41 Policy and services available.

Pursuant to policies established byCongress, the Government’s costs forservices provided to identifiable per-sons are to be recovered by the pay-ment of fees (Independent Offices Ap-propriations Act, 31 U.S.C. 9701 andFreedom of Information Reform Act of1986, October 27, 1986, 5 U.S.C. 552). Ex-cept as otherwise noted, it is the gen-eral policy of the Commission not towaive or reduce service and filing feescontained in this chapter. In extraor-dinary situations, the Commission willaccept requests for waivers or fee re-ductions. Such requests are to be madeto the Secretary of the Commission atthe time of the information request orthe filing of documents and must dem-onstrate that the waiver or reduction

of a fee is in the best interest of thepublic, or that payment of a fee wouldimpose an undue hardship. The Sec-retary will notify the requestor of thedecision to grant or deny the requestfor waiver or reduction.

(a) Upon request, the following serv-ices are available upon the payment ofthe fees hereinafter prescribed; exceptthat no fees shall be assessed forsearch, duplication or review in con-nection with requests for single copiesof materials described in §§ 503.11 and503.21:

(1) Records/documents search.(2) Duplication of records/documents.(3) Review of records/documents.(4) Cerification of copies of records/

documents.(b) Fees shall also be assessed for the

following services provided by theCommission:

(1) Subscriptions to Commission pub-lications.

(2) Placing one’s name, as an inter-ested party, on the mailing list of adocketed proceeding.

(3) Processing nonattorney applica-tions to practice before the Commis-sion.

[49 FR 44401, Nov. 6, 1984, as amended at 52FR 13682, Apr. 24, 1987; 59 FR 59170, Nov. 16,1994]

§ 503.42 Payment of fees and charges.

The fees charged for special servicesmay be paid through the mail bycheck, draft, or postal money order,payable to the Federal Maritime Com-mission, except for charges for tran-scripts of hearings. Transcripts of hear-ings, testimony and oral argument arefurnished by a nongovernmental con-tractor, and may be purchased directlyfrom the reporting firm.

§ 503.43 Fees for services.

(a) Definitions. The following defini-tions apply to the terms when used inthis subpart:

(1) Search means all time spent look-ing for material that is responsive to arequest, including page-by-page or line-by-line identification of material with-in documents. Search for material willbe done in the most efficient and leastexpensive manner so as to minimize


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costs for both the agency and the re-quester. Search is distinguished, more-over, from review of material in orderto determine whether the material isexempt from disclosure. Searches maybe done manually or by computer usingexisting programming.

(2) Duplication means the process ofmaking a copy of a document nec-essary to respond to a Freedom of In-formation Act or other request. Suchcopies can take the form of paper ormachine readable documentation (e.g.,magnetic tape or disk), among others.

(3) Review means the process of exam-ining documents located in response toa commerical use request to determinewhether any portion of any documentlocated is permitted to be withheld. Italso includes processing any documentsfor disclosure, e.g., doing all that isnecessary to excise them and otherwiseprepare them for release. Review doesnot include time spent resolving gen-eral legal or policy issues regarding theapplication of exemptions.

(4) Commercial use request means a re-quest from or on behalf of one whoseeks information for a use or purposethat furthers the commercial, trade, orprofit interests of the requester or theperson on whose behalf the request ismade. In determining whether a re-quester properly belongs in this cat-egory, the agency must determine theuse to which a requester will put thedocuments requested. Where the agen-cy has reasonable cause to doubt theuse to which a requester will put therecords sought, or where that use is notclear from the request itself, the agen-cy will seek additional clarification be-fore assigning the request to a specificcategory.

(5) Educational institution means apreschool, a public or private elemen-tary or secondary school, an institu-tion of graduate higher education, aninstitution of undergraduate highereducation, an institution of profes-sional education, and an institution ofvocational education, which operates aprogram or programs of scholarly re-search.

(6) Non-commercial scientific institutionmeans an institution that is not oper-ated on a commercial basis as that termis referenced in paragraph (a)(4) of thissection, and which is operated solely

for the purpose of conducting scientificresearch the results of which are notintended to promote any particularproduct or industry.

(7) Representative of the news mediameans any person actively gatheringnews for an entity that is organizedand operated to publish or broadcastnews to the public. The term newsmeans information that is about cur-rent events or that would be of currentinterest to the public. Examples ofnews media entities include televisionor radio stations broadcasting to thepublic at large, and publishers of peri-odicals (but only in those instanceswhen they can qualify as disseminatorsof news) who make their productsavailable for purchase or subscriptionby the general public. These examplesare not intended to be all-inclusive. Astraditional methods of news deliveryevolve (e.g., electronic disseminationof newspapers through telecommuni-cations services), such alternativemedia would be included in this cat-egory. Freelance journalists, may be re-garded as working for a news organiza-tion if they can demonstrate a solidbasis for expecting publication throughthat organization, even though not ac-tually employed by it. A publicationcontract would be the clearest proof,but the agency may also look to thepast publication record of a requesterin making this determination.

(8) Direct costs means those expendi-tures which the agency actually incursin searching for and duplicating (and inthe case of commercial requester, re-viewing) documents to respond to aFreedom of Information Act request.Direct costs include, for example, thesalary of the employee performingwork (the basic rate of pay for the em-ployee plus 16 percent of that rate tocover benefits) and the cost of operat-ing duplicating machinery. Not in-cluded in direct costs are overhead ex-penses such as costs of space, and heat-ing or lighting the facility in which therecords are stored.

(b) General. (1) The basic fees setforth in paragraph (c) of this sectionprovide for documents to be mailedwith postage prepaid. If copy is to betransmitted by registered, certified,air, or special delivery mail, postagetherefor will be added to the basic fee.


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46 CFR Ch. IV (10–1–96 Edition)§ 503.43

Also, if special handling or packagingis required, costs thereof will be addedto the basic fee.

(2) The fees for search, duplicationand review set forth in paragraph (c) ofthis section reflect the full allowabledirect costs expected to be incurred bythe agency for the service. Costs ofsearch and review may be assessed evenif it is determined that disclosure ofthe records is to be withheld. Cost ofsearch may be assessed even if theagency fails to locate the records. Re-questers much reasonably describe therecords sought. The following restric-tions, limitations and guidelines applyto the assessment of such fees:

(i) For commercial use requesters,charges recovering full direct costs forsearch, review and duplication ofrecords will be assessed.

(ii) For educational and non-commer-cial scientific institution requesters,no charge will be assessed for search orreview of records. Charges recoveringfull direct costs for duplication ofrecords will be assessed, excludingcharges for the first 100 pages. To be el-igible for inclusion in this category, re-questers must show that the request isbeing made under the auspices of aqualifying institution and that therecords are not sought for a commer-cial use, but are sought in furtheranceof scholarly (if the request is from aneducational institution) or scientific (ifthe request is from a non-commercialscientific institution) research.

(iii) For representative of the newsmedia requesters, no charge will be as-sessed for search or review of records.Charges recovering full direct costs forduplication of records will be assessed,excluding charges for the first 100pages.

(iv) For all other requesters, nocharge will be assessed for review ofrecords. Charges recovering full directcosts for search and duplication ofrecords will be assessed excludingcharges for the first 100 pages of dupli-cation and the first two hours of searchtime. Requests from individuals forrecords about themselves, filed in aCommission system of records, will betreated under the fee provisions of thePrivacy Act of 1984 which permit feesonly for duplication.

(v) No fee may be charged for search,review or duplication if the costs ofroutine collection and processing of thefee are likely to exceed the amount ofthe fee.

(vi) Documents shall be furnishedwithout any charge or at a reducedcharge if disclosure of the informationis in the public interest because it islikely to contribute significantly topublic understanding of the operationsor activities of the government and isnot primarily in the commercial inter-est of the requester. In determiningwhether a waiver or reduction ofcharges is appropriate the followingfactors will be taken into consider-ation.

(A) The subject of the request:Whether the subject of the requestedrecords concerns the operations or ac-tivities of the government;

(B) The informative value of the in-formation to be disclosed: Whether thedisclosure is likely to contribute to anunderstanding of government oper-ations or activities;

(C) The contribution to an under-standing of the subject by the generalpublic likely to result from disclosure:Whether disclosure of the requested in-formation will contribute to public un-derstanding;

(D) The significance of the contribu-tion to public understanding: Whetherthe disclosure is likely to contributesignificantly to public understandingof government operations or activities;

(E) The existence and magnitude of acommercial interest: Whether the re-quester has a commercial interest thatwould be furthered by the requesteddisclosure; and, if so

(F) The primary interest in disclo-sure: Whether the magnitude of theidentified commercial interest of therequester is sufficiently large, in com-parison with the public interest in dis-closure, that disclosure is primarily inthe commercial interest of the re-quester.

(vii) Whenever it is anticipated thatfees chargeable under this section willexceed $25.00 and the requester has notindicated in advance a willingness topay fees as high as anticipated, the re-quester will be notified of the amountof the anticipated fee. In such cases therequester will be given an opportunity


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to confer with Commission personnelwith the object of reformulating the re-quest to meet the needs of the re-quester at a lower cost.

(viii) Interest may be charged recordrequesters who fail to pay fees as-sessed. Assessment of interest maybegin on the amount billed starting onthe 31st day following the day on whichthe billing was sent. Interest will be atthe rate prescribed in section 3717 oftitle 31 U.S.C., and will accrue from thedate of the billings. Receipt of paymentby the agency will stay the accrual ofinterest.

(ix) Whenever it reasonably appearsthat a requester of records or a groupof requesters is attempting to break arequest down into a series of requestsfor the purpose of evading the assess-ment of fees, such requests will be ag-gregated and fees assessed accordingly.Multiple requests on unrelated subjectswill not be aggregated.

(x) The agency may require a re-quester to make advance payment onlywhen:

(A) A requester has previously failedto pay a fee charged in a timely fashion(i.e., within 30 days of the date of thebilling), in which case the requesterwill be required to pay the full amountowed plus any applicable interest asprovided above, and to make an ad-vance payment of the full amount ofthe estimated fee before the agency be-gins to process a new request or a pend-ing request from that requester; or

(B) The agency estimates or deter-mines that allowable charges that a re-quester may be required to pay arelikely to exceed $250, in which case, theagency will notify the requester of thelikely cost and obtain satisfactory as-surance of full payment where the re-quester has a history of prompt pay-ment of FOIA fees, or will require anadvance payment of an amount up tothe full estimated charges in the caseof requesters with no history of pay-ment.

(xi) Unless applicable fees are paid,the agency may use the authorities ofthe Debt Collection Act (Pub. L. 97–365), including disclosure to consumerreporting agencies and use of collec-tion agencies where appropriate to en-courage payment.

(xii) Whenever action is taken underparagraphs (b)(2)(viii) and (b)(2)(ix) ofthis section, the administrative timelimits prescribed in subsection (a)(6) of5 U.S.C. 552 (i.e., 10 working days fromreceipt of initial requests and 20 work-ing days from receipt of appeals frominitial denial, plus permissible exten-sions of these time limits will beginonly after the Commission has receivedfee payments described above.

(c) Charges for search, review, duplica-tion and certification. (1) Records searchwill be performed by Commission per-sonnel at the following rates:

(i) Search will be performed by cleri-cal/administrative personnel at a rateof $15.00 per hour and by professional/executive personnel at a rate of $30.00per hour.

(ii) Minimum charge for recordsearch is $15.00.

(2) Charges for review of records todetermine whether they are exemptfrom disclosure under § 503.35 shall beassessed to recover full costs at therate of $63.00 per hour. Charges for re-view will be assessed only for initial re-view to determine the applicability ofa specific exemptions to a particularrecord. No charge will be assessed forreview at the administrative appeallevel.

(3) Charges for duplication of recordsand documents will be assessed as fol-lows, limited to size 81⁄2″ x 14″ or small-er:

(i) If performed by requesting party,at the rate of five cents per page (oneside).

(ii) By Commission personnel, at therate of five cents per page (one side)plus $15.00 per hour.

(iii) Minimum charge for copying is$3.50.

(4) The certification and validation(with Federal Maritime Commissionseal) of documents filed with or issuedby the Commission will be available at$70.00 for each certification.

(d) Annual subscriptions to Commis-sion publications for which there areregular mailing lists are available atthe charges indicated below for cal-endar year terms. Subscriptions for pe-riods of less than a full calendar yearwill be prorated on a quarterly basis.No provision is made for refund upon


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46 CFR Ch. IV (10–1–96 Edition)§ 503.51

cancellation of subscription by a pur-chaser.

(1) Orders, notices, rulings, and deci-sions (initial and final) issued by Ad-ministrative Law Judges and by theCommission in all formal docketed pro-ceedings before the Federal MaritimeCommission are available at an annualsubscription rate of $278.

(2) Final decisions (only) issued bythe Commission in all formal docketedproceedings before the Commission areavailable at an annual subscriptionrate of $223.

(3) General rules and regulations ofthe Commission are available at thefollowing rates: (i) Initial set includingall current regulations for a fee of $83,and (ii) an annual subscription rate of$6 for all amendments to existing regu-lations and any new regulations issued.

(4) Exceptions. No charge will be madeby the Commission for notices, deci-sions, orders, etc., required by law tobe served on a party to any proceedingor matter before the Commission. Nocharge will be made for single copies ofthe above Commission publications in-dividually requested in person or bymail. In addition, a subscription toCommission mailing lists will be en-tered without charge when one of thefollowing conditions is present:

(i) The furnishing of the service with-out charge is an appropriate courtesyto a foreign country or internationalorganization.

(ii) The recipient is another govern-mental agency, Federal, State, orlocal, concerned with the domestic orforeign commerce by water of the Unit-ed States or, having a legitimate inter-est in the proceedings and activities ofthe Commission.

(iii) The recipient is a college or uni-versity.

(iv) The recipient does not fall withinparagraphs (d)(4) (i), (ii), or (iii) of thissection but is determined by the Com-mission to be appropriate in the inter-est of its programs.

(e) To have one’s name and addressplaced on the mailing list of a specificdocket as an interested party to re-ceive all issuances pertaining to thatdocket: $7 per proceeding.

(f) Loose-leaf reprint of the Commis-sion’s complete, current Rules of Prac-tice and Procedure, part 502 of this

chapter, for an initial fee of $9. Futureamendments to the reprint are avail-able at an annual subscription rate of$7.

(g) Applications for admission topractice before the Commission for per-sons not attorneys at law must be ac-companied by a fee of $77 pursuant to§ 502.27 of this chapter.

(h) Additional issuances, publicationsand services of the Commission may bemade available for fees to be deter-mined by the Secretary which feesshall not exceed the cost to the Com-mission for providing them.

[49 FR 44401, Nov. 6, 1984, as amended at 52FR 13683, Apr. 24, 1987; 59 FR 59170, Nov. 16,1994]

Subpart F—Information SecurityProgram

§ 503.51 Definitions.(a) Original classification means an

initial determination that informationrequires protection against unauthor-ized disclosure in the interest of na-tional security, together with a classi-fication designation signifying thelevel of protection required.

(b) Derivative classification means adetermination that information is insubstance the same as information cur-rently classified, and the application ofthe same classification markings.

(c) Declassification date or event meansa date or event upon which classifiedinformation is automatically declas-sified.

(d) Downgrading date or event means adate or event upon which classified in-formation is automatically down-graded in accordance with appropriatedowngrading instructions on the classi-fied materials.

(e) National security means the na-tional defense or foreign relations ofthe United States.

(f) Foreign government informationmeans either information provided tothe United States by a foreign govern-ment or governments, an internationalorganization of governments, or anyelement thereof with the expectation,expressed or implied, that the informa-tion, the source of the information, orboth, are to be held in confidence; orinformation produced by the UnitedStates pursuant to or as a result of a


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joint arrangement with a foreign gov-ernment or governments, an inter-national organization of governments,or any element thereof, requiring thatthe information, the arrangement, orboth, are to be held in confidence.

§ 503.52 Senior agency official.The Chairman of the Commission

shall designate a senior agency officialto be the Security Officer for the Com-mission who shall be responsible for di-recting and administering the Commis-sion’s information security program,which includes an active oversight andsecurity education program to ensureeffective implementation of ExecutiveOrder 12356.

§ 503.53 Oversight Committee.An Oversight Committee is estab-

lished, under the chairmanship of theSecurity Officer with the following re-sponsibilities:

(a) Establish a Commission securityeducation program to familiarize allpersonnel who have or may have accessto classified information with the pro-visions of Executive Order 12356, andInformation Security Oversight OfficeDirective No. 1. The program shall in-clude initial, refresher, and termi-nation briefings;

(b) Establish controls to ensure thatclassified information is used, proc-essed, stored, reproduced, and trans-mitted only under conditions that willprovide adequate protection and pre-vent access by unauthorized persons;

(c) Act on all suggestions and com-plaints concerning the Commission’sinformation security program;

(d) Recommend appropriate adminis-trative action to correct abuse or vio-lations of any provision of ExecutiveOrder 12356; and

(e) Consider and decide other ques-tions concerning classification and de-classification that may be brought be-fore it.

§ 503.54 Original classification.(a) No Commission Member or em-

ployee has the authority to classifyany Commission originated informa-tion.

(b) If a Commission Member or em-ployee develops information that ap-pears to require classification, or re-

ceives any foreign government infor-mation as defined in § 503.51(f), theMember or employee shall immediatelynotify the Security Officer and appro-priately protect the information.

(c) If the Security Officer believesthe information warrants classifica-tion, it shall be sent to the appropriateagency with original classification au-thority over the subject matter, or tothe Information Security Oversight Of-fice, for review and a classification de-termination.

(d) If there is reasonable doubt aboutthe need to classify information, itshall be safeguarded as if it were classi-fied pending a determination by anoriginal classification authority. Ifthere is reasonable doubt about the ap-propriate level of classification, itshall be safeguarded at the higher levelof classification pending a determina-tion by an original classification au-thority.

§ 503.55 Derivative classification.(a) Any document that includes para-

phrases, restatements, or summariesof, or incorporates in new form, infor-mation that is already classified, shallbe assigned the same level of classifica-tion as the sources, unless consultationwith originators or instructions con-tained in authorized classificationguides indicate that no classification,or a lower classification than origi-nally assigned, should be used.

(b) Persons who apply derivativeclassification markings shall:

(1) Observe and respect original clas-sification decisions, and

(2) Carry forward to any newly cre-ated documents any assigned author-ized markings. The declassificationdate or event that provides the longestperiod of classification shall be usedfor documents classified on the basis ofmultiple sources.

(c) A derivative document that de-rives its classification from the ap-proved use of the classification guide ofanother agency shall bear the declas-sification date required by the provi-sions of that classification guide.

(d) Documents classified derivativelyon the basis of source documents orclassification guides shall bear all ap-plicable marking prescribed in sections2001.5(a) through 2001.5(e), Information


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46 CFR Ch. IV (10–1–96 Edition)§ 503.56

Security Oversight Office Directive No.1.

(1) Classification authority. The au-thority for classification shall beshown as follows:

(i) Classified by (description of sourcedocuments or classification guide), or

(ii) Classified by multiple sources, if adocument is classified on the basis ofmore than one source document orclassification guide.

(iii) In these cases, the derivativeclassifier shall maintain the identifica-tion of each source with the file orrecord copy of the derivatively classi-fied document. A document deriva-tively classified on the basis of asource document that is marked ‘‘Clas-sified by Multiple Sources’’ shall citethe source document in its ‘‘Classifiedby’’ line rather than the term ‘‘Mul-tiple sources.’’

(2) Declassification and downgradinginstructions. Date or events for auto-matic declassification or downgrading,or the notation ‘‘Originating Agency’sDetermination Required’’ to indicatethat the document is not to be declas-sified automatically, shall be carriedforward from the source document, oras directed by a classification guide,and shown on ‘‘declassify on’’ line asfollows:

‘‘Declassify on: (date, description of event);or

‘‘Originating Agency’s Determination Re-quired (OADR).’’

§ 503.56 General declassification pol-icy.

(a) The Commission exercises declas-sification and downgrading authorityin accordance with section 3.1 of Exec-utive Order 12356, only over that infor-mation originally classified by theCommission under previous Executiveorders. Declassification and downgrad-ing authority may be exercised by theCommission Chairman and the Com-mission Security Officer, and such oth-ers as the Chairman may designate.Commission personnel may not declas-sify information originally classifiedby other agencies.

(b) The Commission does not nowhave original classification authoritynor does it have in its possession anydocuments that it originally classifiedwhen it had such authority. The Com-

mission has authorized the Archivist ofthe United States to automatically de-classify information originally classi-fied by the Commission and under itsexclusive and final declassification ju-risdiction at the end of 20 years fromthe date of original classification.

§ 503.57 Mandatory review for declas-sification.

(a) Information originally classifiedby the Commission shall be subject toa review for declassification by theCommission, if:

(1) A request is made by a UnitedStates citizen or permanent residentalien, a federal agency, or a state orlocal government; and

(2) A request describes the documentsor material containing the informationwith sufficient specificity to enable theCommission to locate it with a reason-able amount of effort. Requests withinsufficient description of the materialwill be returned to the requester forfurther information.

(b) Requests for mandatory declas-sification reviews of documents origi-nally classified by the Commissionshall be in writing, and shall be sent tothe Security Officer, Federal MaritimeCommission, Washington, DC 20573.

(c) If the request requires the provi-sion of services by the Commission,fair and equitable fees may be chargedunder title 5 of the Independent OfficesAppropriation Act, 65 Stat. 290, 31U.S.C 483a.

(d) Requests for mandatory declas-sification reviews shall be acknowl-edged by the Commission within 15days of the date of receipt of such re-quests.

(e) If the document was originallyclassified by the Commission, the Com-mission Security Officer shall forwardthe request to the Chairman of theCommission for a determination ofwhether the document should be de-classified.

(f) If the document was derivativelyclassified by the Commission or origi-nally classified by another agency, therequest, the document, and a rec-ommendation for action shall be for-warded to the agency with the originalclassification authority. The Commis-sion may, after consultation with the


105


originating agency, inform the re-quester of the referral.

(g) If a document is declassified in itsentirety, it may be released to the re-quester, unless withholding is other-wise warranted under applicable law. Ifa document or any part of it is not de-classified, the Security Officer shallfurnish the declassified portions to therequester unless withholding is other-wise warranted under applicable law,along with a brief statement concern-ing the reasons for the denial of the re-mainder, and the right to appeal thatdecision to the Commission within 60days.

(h) If a declassification determina-tion cannot be made within 45 days,the requester shall be advised that ad-ditional time is needed to process therequest. Final determination shall bemade within one year from the date ofreceipt unless there are unusual cir-cumstances.

(i) In response to a request for infor-mation under the Freedom of Informa-tion Act, the Privacy Act of 1974, or themandatory review provisions of Execu-tive Order 12356, the Commission shallrefuse to confirm or deny the existenceor non-existence of requested informa-tion whenever the fact of its existenceor non-existence is itself classifiableunder Executive Order 12356.

§ 503.58 Appeals of denials of manda-tory declassification review re-quests.

(a) Within 60 days after the receipt ofdenial of a request for mandatory de-classification reveiw, the requestermay submit an appeal in writing to theCommission through the Secretary,Federal Maritime Commission, Wash-ington, DC 20573. The appeal shall:

(1) Identify the document in the samemanner in which it was identified inthe original request;

(2) Indicate the dates of the requestand denial, and the expressed basis forthe denial; and

(3) State briefly why the documentshould be declassified.

(b) The Commission shall rule on theappeal within 30 days of receiving it. Ifadditional time is required to make adetermination, the Commission shallnotify the requester of the additionaltime needed and provide the requester

with the reason for the extension. TheCommission shall notify the requesterin writing of the final determinationand the reasons for any denial.

(c) A determination by the Commis-sion under paragraph (b) of this sectionis final and no further administrativeappeal will be permitted. However, therequester may be informed that sugges-tions and complaints concerning theinformation security program pre-scribed by Executive Order 12356 maybe submitted to the Director, Informa-tion Security Oversight Office,GSA(AT), Washington, DC 20540.

§ 503.59 Safeguarding classified infor-mation.

(a) All classified information shall beafforded a level of protection againstunauthorized disclosure commensuratewith its level of classification.

(b) Whenever classified material isremoved from a storage facility, suchmaterial shall not be left unattendedand shall be protected by attaching anappropriate classified document coversheet to each classified document.

(c) Classified information beingtransmitted from one Commission of-fice to another shall be protected witha classified document cover sheet andhand delivered by an appropriatelycleared person to another appro-priately cleared person.

(d) Classified information shall bemade available to a person only whenthe possessor of the classified informa-tion has determined that the personseeking the classified information hasa valid security clearance at least com-mensurate with the level of classifica-tion of the information and has estab-lished that access is essential to theaccomplishment of authorized and law-ful Government purposes.

(e) The requirement in paragraph (d)of this section, that access to classifiedinformation may be granted only as isessential to the accomplishment of au-thorized and lawful Government pur-poses, may be waived as provided inparagraph (f) of this section for personswho:

(1) Are engaged in historical researchprojects, or

(2) Previously have occupied policy-making positions to which they wereappointed by the President.


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46 CFR Ch. IV (10–1–96 Edition)§ 503.59

(f) Waivers under paragraph (e) ofthis section may be granted when theCommission Security Officer:

(1) Determines in writing that accessis consistent with the interest of na-tional security;

(2) Takes appropriate steps to protectclassified information from unauthor-ized disclosure or compromise, and en-sures that the information is properlysafeguarded; and

(3) Limits the access granted toformer presidential appointees to itemsthat the person originated, reviewed,signed, or received while serving as apresidential appointee.

(g) Persons seeking access to classi-fied information in accordance withparagraphs (e) and (f) of this sectionmust agree in writing:

(1) To be subject to a national secu-rity check;

(2) To protect the classified informa-tion in accordance with the provisionsof Executive Order 12356; and

(3) Not to publish or otherwise revealto unauthorized persons any classifiedinformation.

(h) Except as provided by directivesissued by the President through theNational Security Council, classifiedinformation that originated in anotheragency may not be disseminated out-side the Commission.

(i) Only appropriately cleared person-nel may receive, transmit, and main-tain current access and accountabilityrecords for classified material.

(j) Each office which has custody ofclassified material shall maintain:

(1) A classified document register orlog containing a listing of all classifiedholdings, and

(2) A classified document destructionregister or log containing the title anddate of all classified documents thathave been destroyed.

(k) An inventory of all documentsclassified higher than confidentialshall be made at least annually andwhenever there is a change in classifieddocument custodians. The CommissionSecurity Officer shall be notified, inwriting, of the results of each inven-tory.

(l) Reproduced copies of classifieddocuments are subject to the same ac-countability and controls as the origi-nal documents.

(m) Combinations to dial-type locksshall be changed only by persons hav-ing an appropriate security clearance,and shall be changed whenever suchequipment is placed in use; whenever aperson knowing the combination nolonger requires access to the combina-tion; whenever a combination has beensubject to possible compromise; when-ever the equipment is taken out ofservice; and at least once each year.Records of combinations shall be clas-sified no lower than the highest level ofclassified information to be stored inthe security equipment concerned. Onecopy of the record of each combinationshall be provided to the CommissionSecurity Officer.

(n) Individuals charged with the cus-tody of classified information shallconduct the necessary inspectionswithin their areas to insure adherenceto procedural safeguards prescribed toprotect classified information. TheCommission Security Officer shall con-duct periodic inspections to determineif the procedural safeguards prescribedin this subpart are in effect at alltimes.

(o) Whenever classified material is tobe transmitted outside the Commis-sion, the custodian of the classifiedmaterial shall contact the CommissionSecurity Officer for preparation andreceipting instructions. If the materialis to be hand carried, the Security Offi-cer shall ensure that the person whowill carry the material has the appro-priate security clearance, is knowl-edgeable of safeguarding requirements,and is briefed, if appropriate, concern-ing restrictions with respect to carry-ing classified material on commercialcarriers.

(p) Any person having access to andpossession of classified information isresponsible for protecting it from per-sons not authorized access to it, to in-clude securing it in approved equip-ment or facilities, whenever it is notunder the direct supervision of author-ized persons.

(q) Employees of the Commissionshall be subject to appropriate sanc-tions, which may include reprimand,suspension without pay, removal, ter-mination of classification authority,


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loss or denial of access to classified in-formation, or other sanctions in ac-cordance with applicable law and agen-cy regulation, if they:

(1) Knowingly, willfully, or neg-ligently disclose to unauthorized per-sons information properly classifiedunder Executive Order 12356 or prede-cessor orders;

(2) Knowingly and willfully classifyor continue the classification of infor-mation in violation of Executive Order12356 or any implementing directive; or

(3) Knowingly and willfully violateany other provision of Executive Order12356 or implementing directive.

(r) Any person who discovers or be-lieves that a classified document is lostor compromised shall immediately re-port the circumstances to his or her su-pervisor and the Commission SecurityOfficer, who shall conduct an imme-diate inquiry into the matter.

(s) Questions with respect to theCommission Information Security Pro-gram, particularly those concerningthe classification, declassification,downgrading, and safeguarding of clas-sified information, shall be directed tothe Commission Security Officer.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

Subpart G—Access to Any Recordof Identifiable Personal Infor-mation

§ 503.60 Definitions.For the purpose of this subpart:

(a) Agency means each authority ofthe government of the United States asdefined in 5 U.S.C. 551(1) and shall in-clude any executive department, mili-tary department, government corpora-tion, government controlled corpora-tion or other establishment in the ex-ecutive branch of the government (in-cluding the Executive Office of thePresident), or any independent regu-latory agency.

(b) Commission means the FederalMaritime Commission.

(c) Individual means a citizen of theUnited States or an alien lawfully ad-mitted for permanent residence towhom a record pertains.

(d) Maintain includes maintain, col-lect, use, or disseminate.

(e) Person means any person not anindividual and shall include, but is notlimited to, corporations, associations,partnerships, trustees, receivers, per-sonal representatives, and public orprivate organizations.

(f) Record means any item, collection,or grouping of information about an in-dividual that is maintained by the Fed-eral Maritime Commission, includingbut not limited to a person’s education,financial transactions, medical his-tory, and criminal or employment his-tory, and that contains the person’sname, or the identifying number, sym-bol or other identifying particular as-signed to the individual, such as a fin-ger or voice print, or a photograph.

(g) Routine use means [with respect tothe disclosure of a record], the use ofsuch records for a purpose which iscompatible with the purpose for whichit was collected.

(h) Statistical record means a record ina system of records, maintained forstatistical research or reporting pur-poses only and not used in whole or inpart in making any determinationabout an identifiable individual, butshall not include matter pertaining tothe Census as defined in 13 U.S.C. 8.

(i) System of records means a group ofany records under the control of theCommission from which information isretrieved by the name of the individualor by some identifying number, symbolor other identifying particular assignedto the individual.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 503.61 Conditions of disclosure.

(a) Subject to the conditions of para-graphs (b) and (c) of this section, theCommission shall not disclose anyrecord which is contained in a systemof records, by any means of commu-nication, to any person or other agencywho is not an individual to whom therecord pertains.

(b) Upon written request or withprior written consent of the individualto whom the record pertains, the Com-mission may disclose any such recordto any person or other agency.

(c) In the absence of a written con-sent from the individual to whom therecord pertains, the Commission may


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disclose any such record, provided suchdisclosure is:

(1) To those officers and employees ofthe Commission who have a need forthe record in the performance of theirduties;

(2) Required under the Freedom of In-formation Act (5 U.S.C 552);

(3) For a routine use;(4) To the Bureau of Census for pur-

poses of planning or carrying out a cen-sus or survey or related activity underthe provisions of title 13 U.S.C.;

(5) To a recipient who has providedthe Commission with adequate advancewritten assurance that the record willbe used solely as a statistical researchor reporting record, and the record isto be transferred in a form that is notindividually identifiable;

(6) To the National Archives of theUnited States, as a record which hassufficient historical or other value towarrant its continued preservation bythe United States government, or forevaluation by the Administrator ofGeneral Services or his designee to de-termine whether the record has suchvalue; —

(7) To another agency or to an instru-mentality of any governmental juris-diction within or under the control ofthe United States for a civil or crimi-nal law enforcement activity author-ized by law, provided the head of theagency or instrumentality has made aprior written request to the Secretaryof the Commission specifying the par-ticular record and the law enforcementactivity for which it is sought;

(8) To either House of Congress, andto the extent of a matter within its ju-risdiction, any committee, subcommit-tee, or joint committee of Congress;

(9) To the Comptroller General, orany authorized representative, thereof,in the course of the performance of theduties of the GAO; or

(10) Under an order of a court of com-petent jurisdiction.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 503.62 Accounting of disclosures.(a) The Secretary shall make an ac-

counting of each disclosure of anyrecord contained in a system of recordsin accordance with 5 U.S.C. 552a(c)(1)and 552a(c)(2).

(b) Except for a disclosure madeunder § 503.61(c)(7), the Secretary shallmake the accounting described in para-graph (a) of this section available toany individual upon written requestmade in accordance with § 503.63(b) or§ 503.63(c).

(c) The Secretary shall make reason-able efforts to notify the individualwhen any record which pertains tosuch individual is disclosed to any per-son under compulsory legal process,when such process becomes a matter ofpublic record.

§ 503.63 Request for information.

(a) Upon request, in person or bymail, made in accordance with the pro-visions of paragraph (b) or (c) of thissection, any individual shall be in-formed whether or not any Commissionsystem of records contains a recordpertaining to him or her.

(b) Any individual requesting suchinformation in person shall personallyappear at the Office of the Secretary,Federal Maritime Commission, 1100 LStreet, NW., Washington, DC 20573 andshall:

(1) Provide information sufficient, inthe opinion of the Secretary, to iden-tify the record, e.g., the individual’sown name, date of birth, place of birth,etc.;

(2) Provide identification acceptableto the Secretary to verify the individ-ual’s identity, e.g., driver’s license, em-ployee identification card or medicarecard;

(3) Complete and sign the appropriateform provided by the Secretary.

(c) Any individual requesting such in-formation by mail shall address suchrequest to the Secretary, Federal Mari-time Commission, 1100 L Street, NW.,Washington, DC 20573 and shall includein such request the following:

(1) Information sufficient in the opin-ion of the Secretary to identify therecord, e.g., the individual’s own name,date of birth, place of birth, etc.;

(2) A signed notarized statement toverify his or her identity.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]


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§ 503.64 Commission procedure on re-quest for information.

Upon request for information madein accordance with § 503.63, the Sec-retary or his or her delegate shall,within 10 days (excluding Saturdays,Sundays, and legal public holidays),furnish in writing to the requestingparty notice of the existence or non-existence of any records described insuch request.

§ 503.65 Request for access to records.(a) General. Upon request by any indi-

vidual made in accordance with theprocedures set forth in paragraph (b) ofthis section, such individual shall begranted access to any record pertainingto him or her which is contained in aCommission system of records. How-ever, nothing in this section shallallow an individual access to any infor-mation compiled by the Commission inreasonable anticipation of a civil orcriminal action or proceeding.

(b) Procedures for requests for access torecords. Any individual may request ac-cess to a record pertaining to him orher in person or by mail in accordancewith paragraphs (b) (1) and (2) of thissection:

(1) Any individual making such re-quest in person shall do so at the Officeof the Secretary, Federal MaritimeCommission, 1100 L Street, NW., Wash-ington, DC 20573 and shall:

(i) Provide identification acceptableto the Secretary to verify the individ-ual’s identity, e.g., driver’s license, em-ployee identification card, or medicarecard; and

(ii) Complete and sign the appro-priate form provided by the Secretary.

(2) Any individual making a requestfor access to records by mail shall ad-dress such request to the Secretary,Federal Maritime Commission, 1100 LStreet, NW., Washington, DC 20573, andshall include therein a signed notarizedstatement to verify his or her identity.

(3) Any individual requesting accessto records under this section in personmay be accompanied by a person of hisor her own choosing, while reviewingthe record requested. If an individualelects to be so accompanied, he or sheshall notify the Secretary of such elec-tion in the request and shall provide awritten statement authorizing disclo-

sure of the record in the presence ofthe acompanying person. Failure to sonotify the Secretary in a request foraccess shall be deemed to be a decisionby the individual not to be accom-panied.

(c) Commission determination of re-quests for access. (1) Upon request madein accordance with this section, theSecretary or his or her delegate shall:

(i) Determine whether or not such re-quest shall be granted;

(ii) Make such determination andprovide notification within 10 days (ex-cluding Saturdays, Sundays, and legalpublic holidays) after receipt of suchrequest, and, if such request is grantedshall:

(iii) Notify the individual that feesfor reproducing copies will be made inaccordance with § 503.69.

(2) If access to a record is denied be-cause such information has been com-piled by the Commission in reasonableanticipation of a civil or criminal ac-tion or proceeding, or for any otherreason, the Secretary shall notify theindividual of such determination andhis or her right to judicial appeal under5 U.S.C. 552a(g).

(d) Manner of providing access. (1) Ifaccess is granted, the individual mak-ing such request shall notify the Sec-retary whether the records requestedare to be copied and mailed to the indi-vidual.

(2) If records are to be made availablefor personal inspection, the individualshall arrange with the Secretary a mu-tually agreeable time and place for in-spection of the record.

(3) Fees for reproducing and mailingcopies of records will be made in ac-cordance with § 503.69.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 503.66 Amendment of a record.(a) General. Any individual may re-

quest amendment of a record pertain-ing to him or her according to the pro-cedure in paragraph (b) of this section.

(b) Procedures for requesting amend-ment of a record. After inspection of arecord pertaining to him or her, an in-dividual may file with the Secretary arequest, in person or by mail, foramendment of a record. Such requestshall specify the particular portions of


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the record to be amended, the desiredamendments and the reasons therefor.

(c) Commission procedures on requestfor amendment of a record. (1) Not laterthan ten (10) days (excluding Satur-days, Sundays, and legal public holi-days) after the date of receipt of a re-quest made in accordance with thissection to amend a record in whole orin part, the Secretary or his or her del-egate shall:

(i) Make any correction of any por-tion of the record which the individualbelieves is not accurate, relevant,timely or complete and thereafter in-form the individual of such correction;or

(ii) Inform the individual, by cer-tified mail, return receipt requested, ofrefusal to amend the record, settingout the reasons therefor, and notify theindividual of his or her right to appealthat determination to the Chairman ofthe Commission under § 503.67.

(2) The Secretary shall inform anyperson or other agency to whom arecord has been disclosed of any correc-tion or notation of dispute made by theSecretary with respect to such records,in accordance with 5 U.S.C. 552a(c)(4)referring to amendment of a record, ifan accounting of such disclosure hasbeen made.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 503.67 Appeals from denial of requestfor amendment of a record.

(a) General. An individual whose re-quest for amendment of a record per-taining to him or her is denied, mayfurther request a review of such deter-mination in accordance with paragraph(b) of this section.

(b) Procedure for appeal. Not laterthan thirty (30) days (excluding Satur-days, Sundays, and legal public holi-days) following receipt of notificationof refusal to amend, an individual mayfile an appeal to amend the record.Such appeal shall:

(1) Be addressed to the Chairman,Federal Maritime Commission, 1100 LStreet, NW, Washington, DC 20573; and

(2) Specify the reasons for which therefusal to amend is challenged.

(c) Commission procedure on appeal. (1)Upon appeal from a denial to amend arecord, the Chairman of the Commis-

sion or the officer designated by theChairman to act in his or her absence,shall make a determination whether ornot to amend the record and shall no-tify the individual of that determina-tion by certified mail, return receiptrequested, not later than thirty (30)days (excluding Saturdays, Sundaysand legal public holidays) after receiptof such appeal, unless extended pursu-ant to paragraph (d) of this section.

(2) The Chairman shall also notifythe individual of the provisions of 5U.S.C. 552a(g)(1)(A) regarding judicialreview of the Chairman’s determina-tion.

(3) If, on appeal, the refusal to amendthe record is upheld, the Commissionshall permit the individual to file astatement setting forth the reasons fordisagreement with the Commission’sdetermination.

(d) The Chairman, or his or her dele-gate in his or her absence, may extendup to thirty (30) days the time periodprescribed in paragraph (c)(1) of thissection within which to make a deter-mination on an appeal from refusal toamend a record for the reasons that afair and equitable review cannot becompleted within the prescribed timeperiod.

§ 503.68 Exemptions.

(a) The system of records designatedFMC–25 Inspector General File is ex-empt from the provisions of 5 U.S.C.552a except subsections (b), (c) (1) and(2), (e)(4) (A) through (F), (e) (6), (7), (9),(10), and (11) and (i) to the extent itcontains information meeting the cri-teria of 5 U.S.C. 552a(j)(2) pertaining tothe enforcement of criminal laws. Ex-emption is appropriate to avoid com-promise of ongoing investigations, dis-closure of the identity of confidentialsources and unwarranted invasions ofpersonal privacy of third parties.

(b) The following systems of recordsare exempt from the provisions of 5U.S.C. 552a(c)(3), (d), (e)(1), (e)(4) (G),(H) and (I) and (f), which otherwise re-quire the Commission, among otherthings, to provide the individual namedin the records an accounting of disclo-sures and access to and opportunity toamend the records. The scope of the ex-emptions and the reasons therefor are


111


described for each particular system ofrecords.

(1) FMC–1 Personnel Security File. Allinformation about individuals thatmeets the criteria of 5 U.S.C. 552a(k)(5),regarding suitability, eligibility orqualifications for Federal civilian em-ployment or for access to classified in-formation, to the extent that disclo-sure would reveal the identity of asource who furnished information tothe Commission under a promise ofconfidentiality. Exemption is requiredto honor promises of confidentiality.

(2) FMC–7 Licensed Ocean FreightForwarders File. All information thatmeets the criteria of 5 U.S.C. 552a(k)(2)regarding investigatory materials com-piled for law enforcement purposes. Ex-emption is appropriate to avoid com-promise of ongoing investigations, dis-closure of the identity of confidentialsources and unwarranted invasions ofpersonal privacy of third parties.

(3) FMC–22 Investigatory Files. All in-formation that meets the criteria of 5U.S.C. 552a(k)(2) regarding investiga-tory material compiled for law enforce-ment purposes. Exemption is appro-priate to avoid compromise of ongoinginvestigations, disclosure of the iden-tity of confidential sources and unwar-ranted invasions of personal privacy ofthird parties.

(4) FMC–24 Informal Inquiries andComplaint Files. All information thatmeets the criteria of 5 U.S.C. 552a(k)(2)regarding investigatory material com-piled for law enforcement purposes. Ex-emption is appropriate to avoid com-promise of ongoing investigations, dis-closure of the identity of confidentialsources and unwarranted invasion ofpersonal privacy of third parties.

(5) FMC–25 Inspector General File. (i)All information that meets the criteriaof 5 U.S.C. 552a(k)(2) regarding inves-tigatory material compiled for law en-forcement purposes. Exemption is ap-propriate to avoid compromise of ongo-ing investigations, disclosure of theidentity of confidential sources and un-warranted invasions of personal pri-vacy of third parties.

(ii) All information about individualsthat meets the criteria of 5 U.S.C.552a(k)(5), regarding suitability, eligi-bility or qualifications for Federal ci-vilian employment or for access to

classified information, to the extentthe disclosure would reveal the iden-tity of a source who furnished informa-tion to the Commission under thepromises of confidentiality. Exemptionis required to honor promises of con-fidentiality.

(6) FMC–26 Administrative GrievanceFile. (i) All information that meets thecriteria of 5 U.S.C. 552a(k)(2) regardinginvestigatory material compiled forlaw enforcement purposes, Exemptionis appropriate to avoid compromise ofongoing investigations, disclosure ofthe identity of confidential sources andunwarranted invasions of personal pri-vacy of third parties.

(ii) All information about individualsthat meets the criteria of 5 U.S.C.552a(k)(5), regarding suitability, eligi-bility or qualification for Federal civil-ian employment or for access to classi-fied information, to the extent thatdisclosure would reveal the identity ofa source who furnished information tothe Commission under a promise ofconfidentiality. Exemption is requiredto honor promises of confidentiality.

[59 FR 15636, Apr. 4, 1994]

§ 503.69 Fees.(a) General. The following Commis-

sion services are available, with re-spect to requests made under the provi-sions of this subpart, for which feeswill be charged as provided in para-graphs (b) and (c) of this section:

(1) Copying records/documents.(2) Certification of copies of docu-

ments.(b) Fees for services. The fees set forth

below provide for documents to bemailed with ordinary first-class post-age prepaid. If a copy is to be transmit-ted by registered, certified, air, or spe-cial delivery mail, postage thereforwill be added to the basic fee. Also, ifspecial handling or packaging is re-quired, costs thereof will be added tothe basic fee.

(1) The copying of records and docu-ments will be available at the rate offive cents per page (one side), limitedto size 81⁄4’’ x 14’’ or smaller.

(2) The certification and validation(with Federal Maritime Commissionseal) of documents filed with or issuedby the Commission will be available at$70 for each certification.


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(c) Payment of fees and charges. Thefees charged for special services may bepaid by check, draft, or postal moneyorder, payable to the Federal MaritimeCommission.


Subpart H—Public Observation ofFederal Maritime CommissionMeetings and Public Accessto Information Pertaining toCommission Meetings

§ 503.70 Policy.It is the policy of the Federal Mari-

time Commission, under the Provisionsof the ‘‘Government in the SunshineAct’’ (5 U.S.C. 552b, Sept. 13, 1976) toentitle the public to the fullest prac-ticable information regarding thedecisional processes of the Commis-sion. The provisions of this subpart setforth the procedural requirements de-signed to provide the public with suchinformation while continuing to pro-tect the rights of individuals and tomaintain the capabilities of the Com-mission in carrying out its responsibil-ities under the shipping statutes ad-ministered by this Commission.

§ 503.71 Definitions.The following definitions apply for

purposes of this subpart:(a) Agency means the Federal Mari-

time Commission;(b) Information pertaining to a meeting

means, but is not limited to the follow-ing: the record of any agency votetaken under the provisions of this sub-part, and the record of the vote of eachmember; a full written explanation ofany agency action to close any portionof any meeting under this subpart; listsof persons expected to attend anymeeting of the agency and their affili-ation; public announcement by theagency under this subpart of the time,place, and subject matter of any meet-ing or portion of any meeting; an-nouncement of whether any meeting orportion of any meeting shall be open topublic observation or be closed; any an-nouncement of any change regardingany meeting or portion of any meeting;and the name and telephone number ofthe Secretary of the agency who shall

be designated by the agency to respondto requests for information concerningany meeting or portion of any meeting;

(c) Meeting means the deliberationsof at least three of the members of theagency which determine or result inthe joint conduct of disposition of offi-cial agency business, but does not in-clude:

(1) Individual member’s consider-ation of official agency business cir-culated to the members in writing fordisposition on notation;

(2) Deliberations by the agency in de-termining whether or not to close aportion or portions of a meeting or se-ries of meetings as provided in §§ 503.74and 503.75;

(3) Deliberations by the agency in de-termining whether or not to withholdfrom disclosure information pertainingto a portion or portions of a meeting orseries of meetings as provided in§ 503.80; or

(4) Deliberations pertaining to anychange in any meeting or to changes inthe public announcement of such ameeting as provided in § 503.83;

(d) Member means each individualCommissioner of the agency;

(e) Person means any individual, part-nership, corporation, association, orpublic or private organization, otherthan an agency as defined in 5 U.S.C.551(1));

(f) Series of meetings means more thanone meeting involving the same par-ticular matters and scheduled to beheld no more than thirty (30) days afterthe initial meeting in such series.

§ 503.72 General rule—meetings.

(a) Except as otherwise provided in§§ 503.73, 503.74, 503.75 and 503.76, everyportion of every meeting and everyportion of a series of meetings of theagency shall be open to public observa-tion.

(b) The opening of a portion or por-tions of a meeting or a portion or por-tions of a series of meetings to publicobservation shall not be construed toinclude any participation by the publicin any manner in the meeting. Such anattempted participation or participa-tion shall be cause for removal of anyperson so engaged at the discretion ofthe presiding member of the agency.


113


§ 503.73 Exceptions—meetings.Except in a case where the agency

finds that the public interest requiresotherwise, the provisions of § 503.72(a)shall not apply to any portion or por-tions of an agency meeting or portionor portions of a series of meetingswhere the agency determined under theprovisions of § 503.74 or § 503.75 thatsuch portion or portions of such meet-ing or series of meetings is likely to:

(a) Disclose matters that are (1) spe-cifically authorized under criteria es-tablished by an Executive order to bekept secret in the interests of nationaldefense or foreign policy and (2) in factproperly classified pursuant to suchExecutive order;

(b) Relate solely to the internal per-sonnel rules and practices of any agen-cy;

(c) Disclose matters specifically ex-empted from disclosure by any statuteother than 5 U.S.C. 552 (FOIA), pro-vided that such statute (1) requiresthat the matter be withheld from thepublic in such a manner as to leave nodiscretion on the issue, or (2) estab-lishes particular criteria for withhold-ing or refers to particular types of mat-ters to be withheld;

(d) Disclose trade secrets and com-mercial or financial information ob-tained from a person and privileged orconfidential;

(e) Involve accusing any person of acrime, or formally censuring any per-son;

(f) Disclose information of a personalnature where disclosure would con-stitute a clearly unwarranted invasionof personal privacy;

(g) Disclose investigatory recordscompiled for law enforcement purposes,or information which, if written, wouldbe contained in such records, but onlyto the extent that the production ofsuch records or information would

(1) Interfere with enforcement pro-ceedings,

(2) Deprive a person of a right to afair trial or an impartial adjudication,

(3) Constitute an unwarranted inva-sion of personal privacy,

(4) Disclose the identity of a con-fidential source and, in the case of arecord compiled by a criminal law en-forcement authority in the course of acriminal investigation, or by an agency

conducting a lawful national securityintelligence investigation, confidentialinformation furnished only by the con-fidential source,

(5) Disclose investigative techniquesand procedures, or

(6) Endanger the life or physical safe-ty of law enforcement personnel;

(h) Disclose information contained inor related to examination, operating,or condition reports prepared by, on be-half of, or for the use of an agency re-sponsible for the regulation or super-vision of financial institutions;

(i) Disclose information, the pre-mature disclosure of which would belikely to significantly frustrate imple-mentation of a proposed agency actionunless the agency has already disclosedto the public the content or nature ofits proposed action, or where the agen-cy is required by law to make such dis-closure on its own initiative prior totaking final agency action on such pro-posal; or

(j) Specifically concern the agency’sissuance of a subpena, or the agency’sparticipation in a civil action or pro-ceeding, an action in a foreign court orinternational tribunal, or an arbitra-tion, or the initiation, conduct, or dis-position by the agency of a particularcase of formal agency adjudication pur-suant to the procedures in 5 U.S.C. 554or otherwise involving a determinationon the record after opportunity for ahearing.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 503.74 Procedures for closing a por-tion or portions of a meeting or aportion or portions of a series ofmeetings on agency initiated re-quests.

(a) Any member of the agency, theManaging Director or the GeneralCounsel of the agency may requestthat any portion or portions of a seriesof meetings be closed to public obser-vation for any of the reasons providedin § 503.73 by submitting such request inwriting to the Secretary of the agencyin sufficient time to allow the Sec-retary to schedule a timely vote on therequest pursuant to paragraph (b) ofthis section.

(b) Upon receipt of any request madeunder paragraph (a) of this section, the


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Secretary of the agency shall schedulea time at which the members of theagency shall vote upon the request,which vote shall take place not laterthen eight (8) days prior to the sched-uled meeting of the agency.

(c) At the time the Secretary sched-ules a time for an agency vote as de-scribed in paragraph (b) of this section,he or she shall forward the request tothe General Counsel of the agency whoshall act upon such request as providedin § 503.77.

(d) At the time scheduled by the Sec-retary as provided in paragraph (b) ofthis section, the members of the agen-cy, upon consideration of the requestsubmitted under paragraph (a) of thissection and consideration of the cer-tified opinion of the General Counsel ofthe agency provided to the membersunder § 503.77, shall vote upon that re-quest. That vote shall determinewhether or not any portion or portionsof a meeting may be closed to publicobservation for any of the reasons pro-vided in § 503.73, and whether or not thepublic interest requires that the por-tion or portions of the meeting ormeetings remain open, notwithstand-ing the applicability of any of the rea-sons provided in § 503.73 permitting theclosing of any meeting to public obser-vation.

(e) In the case of a vote on a requestunder this section to close to public ob-servation a portion or portions of ameeting, no such portion or portions ofany meeting may be closed unless, by avote on the issues described in para-graph (d) of this section, a majority ofthe entire membership of the agencyshall vote to close such portion or por-tions of a meeting by recorded vote.

(f) In the case of a vote on a requestunder this section to close to public ob-servation a portion or portions of a se-ries of meetings as defined in § 503.71,no such portion or portions of a seriesof meetings may be closed unless, by avote on the issues described in para-graph (d) of this section, a majority ofthe entire membership of the agencyshall vote to close such portion or por-tions of a series of meetings. A deter-mination to close to public observationa portion or portions of a series ofmeetings may be accomplished by asingle vote on each of the issues de-

scribed in paragraph (d) of this section,provided that the vote of each memberof the agency shall be recorded and thevote shall be cast by each member andnot by proxy vote.

[49 FR 44401, Nov. 6, 1984, as amended at 55FR 38330, Sept. 18, 1990]

§ 503.75 Procedures for closing a por-tion of a meeting on request initi-ated by an interested person.

(a) Any person as defined in § 503.71,whose interests may be directly af-fected by a portion of a meeting of theagency, may request that the agencyclose that portion of a meeting for thereason that matters in deliberation atthat portion of the meeting are suchthat public disclosure of that portionof a meeting is likely to:

(1) Involve accusing any person of acrime, or formally censuring any per-son;

(2) Disclose information of a personalnature where disclosure would con-stitute a clearly unwarranted invasionof personal privacy; or

(3) Disclose investigatory recordscompiled for law enforcement purposes,or information which if written wouldbe contained in such records, but onlyto the extent that the production ofsuch records or information would:

(i) Interfere with enforcement pro-ceedings;

(ii) Deprive a person of a right to afair trial or an impartial adjudication;

(iii) Constitute an unwarranted inva-sion of personal privacy;

(iv) Disclose the identity of a con-fidential source and, in the case of arecord compiled by a criminal law en-forcement authority in the course of acriminal investigation, or by an agencyconducting a lawful national securityintelligence investigation, confidentialinformation furnished only by the con-fidential source;

(v) Disclose investigative techniquesand procedures; or

(vi) Endanger the life or physicalsafety of law enforcement personnel.

(b) Any person described in para-graph (a) of this section who submits arequest that a portion of a meeting beclosed shall submit an original and 15copies of that request to the Secretary,Federal Maritime Commission, Wash-ington, DC 20573, and shall state with


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particularity that portion of a meetingsought to be closed and the reasonstherefor as described in paragraph (a)of this section.

(c) Upon receipt of any request madeunder paragraphs (a) and (b) of this sec-tion, the Secretary of the agency shall:

(1) Furnish a copy of the request toeach member of the agency; and

(2) Furnish a copy of the request tothe General Counsel of the agency.

(d) Upon receipt of a request madeunder paragraphs (a) and (b) of this sec-tion, any member of the agency mayrequest agency action upon the requestto close a portion of a meeting by noti-fying the Secretary of the agency ofthat request for agency action.

(e) Upon receipt of a request for agen-cy action under paragraph (d) of thissection, the Secretary of the agencyshall schedule a time for an agencyvote upon the request of the personwhose interests may be directly af-fected by a portion of a meeting, whichvote shall take place prior to thescheduled meeting of the agency.

(f) At the time the Secretary receivesa request for agency action and sched-ules a time for an agency vote as de-scribed in paragraph (e) of this section,the request of the person whose inter-ests may be directly affected by a por-tion of a meeting shall be forwarded tothe General Counsel of the agency whoshall act upon such request as providedin § 503.77.

(g) At the time scheduled by the Sec-retary, as provided in paragraph (e) ofthis section, the members of the agen-cy, upon consideration of the request ofthe person whose interests may be di-rectly affected by a portion of a meet-ing submitted under paragraphs (a) and(b) of this section, and consideration ofthe certified opinion of the GeneralCounsel of the agency provided to themembers under § 503.77, shall vote uponthat request. That vote shall determinewhether or not any portion or portionsof a meeting or portion or portions of aseries of meetings may be closed topublic observation for any of the rea-sons provided in paragraph (a) of thissection, and whether or not the publicinterest requires that the portion orportions of the meeting or meetings re-main open, notwithstanding the appli-cability of any of the reasons provided

in paragraph (a) of this section permit-ting the closing of any portion of anymeeting to public observation.

(h) In the case of a vote on a requestunder this section to close to public ob-servation a portion of a meeting, nosuch portion of a meeting may beclosed unless, by a vote on the issuesdescribed in paragraph (g) of this sec-tion, a majority of the entire member-ship of the agency shall vote to closesuch portion of a meeting by a recordedvote.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 503.76 Effect of vote to close a por-tion or portions of a meeting or se-ries of meetings.

(a) Where the agency votes as pro-vided in § 503.74 or § 503.75, to close topublic observation a portion or por-tions of a meeting or a portion or por-tions of a series of meetings, the por-tion or portions of a meeting or theportion or portions of a series of meet-ings shall be closed.

(b) Except as otherwise provided in§§ 503.80, 503.81 and 503.82, not later thanthe day following the day on which avote is taken under § 503.74 or § 503.75,by which it is determined to close aportion or portions of a meeting or aportion or portions of a series of meet-ings to public observation, the Sec-retary shall make available to the pub-lic:

(1) A written copy of the recordedvote reflecting the vote of each mem-ber of the agency;

(2) A full written explanation of theagency action closing that portion orthose portions to public observation;and

(3) A list of the names and affili-ations of all persons expected to attendthe portion or portions of the meetingor the portion or portions of a series ofmeetings.

(c) Except as otherwise provided in§§ 503.80, 503.81 and 503.82, not later thanthe day following the day on which avote is taken under § 503.74, or § 503.75,by which it is determined that the por-tion or portions of a meeting or theportion or portions of a series of meet-ings shall remain open to public obser-vation, the Secretary shall make avail-able to the public a written copy of the


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46 CFR Ch. IV (10–1–96 Edition)§ 503.77

recorded vote reflecting the vote ofeach member of the agency.

§ 503.77 Responsibilities of the GeneralCounsel of the agency upon a re-quest to close any portion of anymeeting.

(a) Upon any request that the agencyclose a portion or portions of any meet-ing or any portion or portions of anyseries of meetings under the provisionsof §§ 503.74 and 503.75, the General Coun-sel of the agency shall certify in writ-ing to the agency, prior to an agencyvote on that request, whether or not inhis or her opinion the closing of anysuch portion or portions of a meetingor portion or portions of a series ofmeetings is proper under the provisionsof this subpart and the terms of theGovernment in the Sunshine Act (5U.S.C. 552b). If, in the opinion of theGeneral Counsel, the closing of a por-tion or portions of a meeting or portionor portions of a series of meetings isproper under the provisions of this sub-part and the terms of the Governmentin the Sunshine Act (5 U.S.C. 552b), hisor her certification of that opinionshall cite each applicable, particular,exemptive provision of that Act andprovision of this subpart.

(b) A copy of the certification of theGeneral Counsel as described in para-graph (a) of this section, together witha statement of the officer presidingover the portion or portions of anymeeting or the portion or portions of aseries of meetings setting forth thetime and place of the relevant meetingor meetings, and the persons present,shall be maintained by the Secretaryfor public inspection.

§ 503.78 General rule—informationpertaining to meeting.

(a) As defined in § 503.71, all informa-tion pertaining to a portion or portionsof a meeting or portion or portions of aseries of meetings of the agency shallbe disclosed to the public unless ex-cepted from such disclosure under§§ 503.79, 503.80 and 503.81.

(b) All inquiries as to the status ofpending matters which were consideredby the Commission in closed sessionshould be directed to the Secretary ofthe Commission. Commission person-nel who attend closed meetings of the

Commission are prohibited from dis-closing anything that occurs duringthose meetings. An employee’s failureto respect the confidentiality of closedmeetings constitutes a violation ofCommission’s General Standards ofConduct. The Commission can, ofcourse, determine to make public theevents or decisions occurring in aclosed meeting, such information to bedisseminated by the Office of the Sec-retary. An inquiry to the Office of theSecretary as to whether any informa-tion has been made public is not, there-fore, improper. However, a request ofor attempt to persuade a Commissionemployee to divulge the contents of aclosed meeting constitutes a lack ofproper professional conduct inappropri-ate to a person practicing before thisagency, and requires that the employeefile a report of such event so that a de-termination can be made whether dis-ciplinary action should be initiatedpursuant to § 502.30 of this chapter.

§ 503.79 Exceptions—information per-taining to meeting.

Except in a case where the agencyfinds that the public interest requiresotherwise, information pertaining to aportion or portions of a meeting or por-tion or portions of a series of meetingsneed not be disclosed by the agency ifthe agency determines, under the pro-visions of §§ 503.80 and 503.81 that dis-closure of that information is likely todisclose matters which are:

(a) Specifically authorized under cri-teria established by an Executive orderto be kept secret in the interests of na-tional defense or foreign policy and infact properly classified pursuant tosuch Executive order;

(b) Related solely to the internal per-sonnel rules and practices of an agen-cy;

(c) Specifically exempted from dis-closure by any statute other than 5U.S.C. 552 (FOIA), provided that suchstatute (1) requires that the matters bewithheld from the public in such amanner as to leave no discretion on theissue, or (2) establishes particular cri-teria for withholding or refers to par-ticular types of matters to be withheld;

(d) Trade secrets and commercial orfinancial information, obtained from aperson and privileged or confidential;


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(e) Involved with accusing any personof a crime, or formally censuring anyperson;

(f) Of a personal nature, where disclo-sure would constitute a clearly unwar-ranted invasion of personal privacy;

(g) Investigatory records compiledfor law enforcement purposes, or infor-mation which if written would be con-tained in such records, but only to theextent that the production of suchrecord or information would

(1) Interfere with enforcement pro-ceedings,

(2) Deprive a person of a right to afair trial or an impartial adjudication,

(3) Constitute an unwarranted inva-sion of personal privacy,

(4) Disclose the identity of a con-fidential source and, in the case of arecord compiled by a criminal law en-forcement authority in the course of acriminal investigation, or by an agencyconducting a lawful national securityintelligence investigation, confidentialinformation furnished only by the con-fidential source,

(5) Disclose investigative techniquesand procedures, or

(6) Endanger the life or physical safe-ty of law enforcement personnel;

(h) Contained in or related to exam-ination, operation, or condition reportsprepared by, on behalf of, or for the useof an agency responsible for the regula-tion or supervision of financial institu-tions;

(i) Information, the premature dis-closure of which would be likely to sig-nificantly frustrate implementation ofa proposed agency action, unless theagency has already disclosed to thepublic the content or nature of its pro-posed action, or where the agency is re-quired by law to make such disclosureon its own initiative prior to takingfinal agency action on such proposal;or

(j) Specifically concerned with theagency’s issuance of a subpena, theagency’s participation in a civil actionor proceeding, an action in a foreigncourt or international tribunal, or anarbitration, or the initiation, conduct,or disposition by the agency of a par-ticular case of formal agency adjudica-tion pursuant to the procedures in 5U.S.C. 554 or otherwise involving a de-

termination on the record after oppor-tunity for a hearing.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 503.80 Procedures for withholdinginformation pertaining to meeting.

(a) Any member of the agency, or theGeneral Counsel of the agency may re-quest that information pertaining to aportion or portions of a meeting or toa portion or portions of a series ofmeetings be withheld from public dis-closure for any of the reasons set forthin § 503.79 by submitting such request inwriting to the Secretary not later thantwo (2) weeks prior to the commence-ment of the first meeting in a series ofmeetings.

(b) Upon receipt of any request madeunder paragraph (a) of this section, theSecretary shall schedule a time atwhich the members of the agency shallvote upon the request, which vote shalltake place not later than eight (8) daysprior to the scheduled meeting of theagency.

(c) At the time scheduled by the Sec-retary in paragraph (b) of this section,the Members of the agency, upon con-sideration of the request submittedunder paragraph (a) of this section,shall vote upon that request. That voteshall determine whether or not infor-mation pertaining to a meeting may bewithheld from public disclosure for anyof the reasons provided in § 503.79, andwhether or not the public interest re-quires that the information be dis-closed notwithstanding the applicabil-ity of the reasons provided in § 503.79permitting the withholding from publicdisclosure of the information pertain-ing to a meeting.

(d) In the case of a vote on a requestunder this section to withhold frompublic disclosure information pertain-ing to a portion or portions of a meet-ing, no such information shall be with-held from public disclosure unless, by avote on the issues described in para-graph (c) of this section, a majority ofthe entire membership of the agencyshall vote to withhold such informa-tion by recorded vote.

(e) In the case of a vote on a requestunder this section to withhold informa-tion pertaining to a portion or portions


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46 CFR Ch. IV (10–1–96 Edition)§ 503.81

of a series of meetings, no such infor-mation shall be withheld unless, by avote on the issues described in para-graph (c) of this section, a majority ofthe entire membership of the agencyshall vote to withhold such informa-tion. A determination to withhold in-formation pertaining to a portion orportions of a series of meetings frompublic disclosure may be accomplishedby a single vote on the issues describedin paragraph (c) of this section, pro-vided that the vote of each member ofthe agency shall be recorded and thevote shall be cast by each member andnot by proxy vote.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 503.81 Effect of vote to withhold in-formation pertaining to meeting.

(a) Where the agency votes as pro-vided in § 503.80 to withhold from publicdisclosure information pertaining to aportion or portions of a meeting or por-tion or portions of a series of meetings,such information shall be exceptedfrom the requirements of §§ 503.78,503.82 and 503.83.

(b) Where the agency votes as pro-vided in § 503.80 to permit public disclo-sure of information pertaining to a por-tion of portions of a meeting or portionor portions of a series of meetings,such information shall be disclosed tothe public as required by §§ 503.78, 503.82and 503.83.

(c) Not later than the day followingthe date on which a vote is taken under§ 503.80, by which the information per-taining to a meeting is determined tobe disclosed, the Secretary shall makeavailable to the public a written copyof such vote reflecting the vote of eachmember of the agency on the question.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 503.82 Public announcement of agen-cy meeting.

(a) Except as provided in §§ 503.80 and503.81 regarding a determination towithhold from public disclosure any in-formation pertaining to a portion orportions of a meeting or portion or por-tions of a series of meetings, or as oth-erwise provided in paragraph (c) of thissection, the Secretary of the agency

shall make public announcement ofeach meeting of the agency.

(b) Except as otherwise provided inthis section, public announcement ofeach meeting of the agency shall be ac-complished not later than one weekprior to commencement of a meetingor the commencement of the firstmeeting in a series of meetings, andshall disclose:

(1) The time of the meeting;(2) The place of the meeting;(3) The subject matter of each por-

tion of each meeting or series of meet-ings;

(4) Whether any portion or portionsof a meeting or portion or portions ofany series of meetings shall be open orclosed to public observation; and

(5) The name and telephone numberof the Secretary of the agency whoshall respond to requests for informa-tion about a meeting.

(c) The announcement described inparagraphs (a) and (b) of this sectionmay be accomplished less than oneweek prior to the commencement ofany meeting or series of meetings, pro-vided the agency determines by re-corded vote that the agency businessrequires that any such meeting or se-ries of meetings be held at an earlierdate. In the event of such a determina-tion by the agency, public announce-ment as described in paragraph (b) ofthis section shall be accomplished atthe earliest practicable time.

(d) Immediately following any publicannouncement accomplished under theprovisions of this section, the Sec-retary of the agency shall submit a no-tice for publication in the FEDERALREGISTER disclosing:



(4) Whether any portion or portionsof a meeting or portion or portions ofany series of meetings is open or closedto public observation; and

(5) The name and telephone numberof the Secretary of the agency whoshall respond to requests for informa-tion about any meeting.

(e) No comments or further informa-tion relating to a particular itemscheduled for an agency meeting will


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be accepted by the Secretary for con-sideration subsequent to public an-nouncement of such meeting; exceptthat the Commission, on its own initia-tive, or pursuant to a written request,may in its discretion, permit a depar-ture from this limitation for excep-tional circumstances.


§ 503.83 Public announcement ofchanges in meeting.

(a) Except as provided in §§ 503.80 and503.81, under the provisions of para-graphs (b) and (c) of this section, thetime or place of a meeting or series ofmeetings may be changed by the agen-cy following accomplishment of the an-nouncement and notice required by§ 503.82, provided the Secretary of theagency shall publicly announce suchchange at the earliest practicable time.

(b) The subject matter of a portion orportions of a meeting or a portion orportions of a series of meetings, thetime and place of such meeting, andthe determination that the portion orportions of a series of meetings shall beopen or closed to public observationmay be changed following accomplish-ment of the announcement required by§ 503.82, provided:

(1) The agency, by recorded vote ofthe majority of the entire membershipof the agency, determines that agencybusiness so requires and that no earlierannouncement of the change was pos-sible; and

(2) The Secretary of the agency pub-licly announces, at the earliest prac-ticable time, the change made and thevote of each member upon such change.

(c) Immediately following any publicannouncement of any change accom-plished under the provisions of this sec-tion, the Secretary of the agency shallsubmit a notice for publication in theFEDERAL REGISTER disclosing:



(4) Whether any portion or portionsof any meeting or any portion or por-tions of any series of meetings is openor closed to public observation;

(5) Any change in paragraphs (c) (1),(c) (2), (c) (3), or (c) (4) of this section;and

(6) The name and telephone numberof the Secretary of the agency whoshall respond to requests for informa-tion about any meeting.


§ 503.85 Agency recordkeeping re-quirements.

(a) In the case of any portion or por-tions of a meeting or portion or por-tions of a series of meetings deter-mined by the agency to be closed topublic observation under the provisionsof this subpart, the following recordsshall be maintained by the Secretary ofthe agency:

(1) The certification of the GeneralCounsel of the agency required by§ 503.77;

(2) A statement from the officer pre-siding over the portion or portions ofthe meeting or portion or portions of aseries of meetings setting forth thetime and place of the portion or por-tions of the meeting or portion or por-tions of the series of meetings, the per-sons present at those times; and

(3) Except as provided in paragraph(b) of this section, a complete tran-script or electronic recording fully re-cording the proceedings at each portionof each meeting closed to public obser-vation.

(b) In case the agency determines toclose to public observation any portionor portions of any meeting or portionor portions of any series of meetingsbecause public observation of such por-tion or portions of any meeting is like-ly to specifically concern the agency’sissuance of a subpena, or the agency’sparticipation in a civil action or pro-ceeding, an action in a foreign court orinternational tribunal, or an arbitra-tion, or the initiation, conduct, or dis-position by the agency of a particularcase of formal agency adjudication pur-suant to the procedures in 5 U.S.C. 554or otherwise involving a determinationon the record after opportunity for ahearing, the agency may maintain aset of minutes in lieu of the transcriptor recording described in paragraph(a)(3) of this section. Such minutesshall contain:


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46 CFR Ch. IV (10–1–96 Edition)§ 503.86

(1) A full and clear description of allmatters discussed in the closed portionof any meeting;

(2) A full and accurate summary ofany action taken on any matter dis-cussed in the closed portion of anymeeting and the reasons therefor;

(3) A description of each of the viewsexpressed on any matter upon whichaction was taken as described in para-graph (b)(2) of this section;

(4) The record of any rollcall votewhich shall show the vote of eachmember on the question; and

(5) An identification of all documentsconsidered in connection with any ac-tion taken on a matter described inparagraph (b)(1) of this section.

(c) All records maintained by theagency as described in this sectionshall be held by the agency for a periodof not less than two (2) years followingany meeting or not less than one (1)year following the conclusion of anyagency proceeding with respect towhich that meeting or portion of ameeting was held.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 503.86 Public access to records.(a) All transcripts, electronic record-

ings or minutes required to be main-tained by the agency under the provi-sions of §§ 503.85(a)(3) and 503.85(b) shallbe promptly made available to the pub-lic by the Secretary of the agency, ex-cept for any item of discussion or testi-mony of any witnesses which the agen-cy determines to contain informationwhich may be withheld from public dis-closure because its disclosure is likelyto disclose matters which are:

(1)(i) specifically authorized undercriteria established by an Executiveorder to be kept secret in the interestof national defense or foreign policyand (ii) in fact properly classified pur-suant to such Executive order;

(2) Related solely to the internal per-sonnel rules and practices of an agen-cy;

(3) Specifically exempted from disclo-sure by any statute other than 5 U.S.C.552 (FOIA), provided that such statute

(i) Requires that the matters be with-held from the public in such a manneras to leave no discretion on the issue,or

(ii) Establishes particular criteria forwithholding or refers to particulartypes of matters to be withheld;

(4) Trade secrets and commercial orfinancial information obtained from aperson and privileged or confidential;

(5) Involved with accusing any personof a crime, or formally censuring anyperson;

(6) Of a personal nature where disclo-sure would constitute a clearly unwar-ranted invasion of personal privacy;

(7) Investigatory records compiled forlaw enforcement purposes, or informa-tion which, if written, would be con-tained in such records, but only to theextent that the production of suchrecords or information would

(i) Interfere with enforcement pro-ceedings,

(ii) Deprive a person of a right to afair trial or an impartial adjudication,

(iii) Constitute an unwarranted inva-sion of personal privacy,

(iv) Disclose the identity of a con-fidential source and, in the case of arecord compiled by a criminal law en-forcement authority in the course of acriminal investigation, or by an agencyconducting a lawful national securityintelligence investigation, confidentialinformation furnished only by the con-fidential source,

(v) Disclose investigative techniquesand procedures or

(vi) Endanger the life or physicalsafety of law enforcement personnel;

(8) Contained in or related to exam-ination, operating, or condition reportsprepared by, on behalf of, or for the useof an agency responsible for the regula-tion or supervision of financial institu-tions;

(9) Information, the premature dis-closure of which would be likely to sig-nificantly frustrate implementation ofa proposed agency action, unless theagency has already disclosed to thepublic the content or nature of its pro-posed action, or where the agency is re-quired by law to make such disclosureon its own initiative prior to takingfinal agency action on such proposal;or

(10) Specifically concerned with theagency’s issuance of a subpena, or theagency’s participation in a civil actionor proceeding, an action in a foreigncourt or international tribunal, or an


121


arbitration, or the initiation, conduct,or disposition by the agency of a par-ticular case of formal agency adjudica-tion pursuant to the procedures in 5U.S.C. 554 or otherwise involving a de-termination on the record after oppor-tunity for a hearing.

(b) Requests for access to the recordsdescribed in this section shall be madein accordance with procedures de-scribed in §§ 503.31 through 503.36.

(c) Records disclosed to the publicunder this section shall be furnished atthe expense of the party requestingsuch access at the actual cost of dupli-cation or transcription.

§ 503.87 Effect of provisions of thissubpart on other subparts.

(a) Nothing in this subpart shalllimit or expand the ability of any per-son to seek access to agency recordsunder subpart D (§§ 503.31 to 503.36) ofthis part except that the exceptions of§ 503.86 shall govern requests to copy orinspect any portion of any transcript,electronic recordings or minutes re-quired to be kept under this subpart.

(b) Nothing in this subpart shall per-mit the withholding from any individ-ual to whom a record pertains anyrecord required by this subpart to bemaintained by the agency which recordis otherwise available to such an indi-vidual under the provisions of subpartG of this part.

[49 FR 44401, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

PART 504—PROCEDURES FOR ENVI-RONMENTAL POLICY ANALYSIS

Sec.504.1 Purpose and scope.504.2 Definitions.504.3 General information.504.4 Categorical exclusions.504.5 Environmental assessments.504.6 Finding of no significant impact.504.7 Environmental impact statements.504.8 Record of decision.504.9 Information required by the Commis-

sion.504.10 Time constraints on final administra-

tive actions.504.91 OMB control numbers assigned pursu-

ant to the Paperwork Reduction Act.

AUTHORITY: 5 U.S.C. 552, 553; secs. 21 and 43of the Shipping Act, 1916 (46 U.S.C. app. 820and 841a); secs. 13 and 17 of the Shipping Act

of 1984 (46 U.S.C. app. 1712 and 1716); sec. 102of the National Environmental Policy Act of1969 (42 U.S.C. 4332(2)(b)) and sec. 382(b) of theEnergy Policy and Conservation Act of 1975(42 U.S.C. 6362).


§ 504.1 Purpose and scope.

(a) This part implements the Na-tional Environmental Policy Act of1969 (NEPA) and Executive Order 12114and incorporates and complies with theRegulations of the Council on Environ-mental Quality (CEQ) (40 CFR part 1500et seq.).

(b) This part applies to all actions ofthe Federal Maritime Commission(Commission). To the extent possible,the Commission shall integrate the re-quirements of NEPA with its obliga-tions under section 382(b) of the EnergyPolicy and Conservation Act of 1975, 42U.S.C. 6362.

(c) Information obtained under thispart is used by the Commission to as-sess potential environmental impactsof proposed Federal Maritime Commis-sion actions. Compliance is voluntarybut may be made mandatory by Com-mission order to produce the informa-tion pursuant to section 21 of the Ship-ping Act, 1916 or section 15 of the Ship-ping Act of 1984. Penalty for non-com-pliance with a section 21 order is $100 aday for each day of default; penalty forfalsification of such a report is a fine ofup to $1,000 or imprisonment up to oneyear, or both. Penalty for violation ofa Commission order under section 15 ofthe Shipping Act of 1984 may not ex-ceed $5,000 for each violation, unlessthe violation was willfully and know-ingly committed, in which case theamount of the civil penalty may notexceed $25,000 for each violation. (Eachday of a continuing violation con-stitutes a separate offense).


(a) Shipping Act, 1916 [46 U.S.C. app.801–846] means the Shipping Act, 1916 asamended, 46 U.S.C. app. 801 et seq.

(b) Common carrier means any com-mon carrier by water as defined in sec-tion 3 of the Shipping Act of 1984 or inthe Shipping Act, 1916, including a con-ference of such carriers.


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46 CFR Ch. IV (10–1–96 Edition)§ 504.3

(c) Environmental impact means anyalteration of existing environmentalconditions or creation of a new set ofenvironmental conditions, adverse orbeneficial, caused or induced by the ac-tion under consideration.

(d) Potential action means the rangeof possible Commission actions thatmay result from a Commission pro-ceeding in which the Commission hasnot yet formulated a proposal.

(e) Proposed action means that stageof activity where the Commission hasdetermined to take a particular courseof action and the effects of that courseof action can be meaningfully evalu-ated.

(f) Environmental assessment means aconcise document that serves to ‘‘pro-vide sufficient evidence and analysisfor determining whether to prepare anenvironmental impact statement or afinding of no significant impact’’ (40CFR 1508.9).

(g) Recyclable means any secondarymaterial that can be used as a raw ma-terial in an industrial process in whichit is transformed into a new product re-placing the use of a depletable naturalresource.

(h) Shipping Act of 1984 means theShipping Act of 1984 (46 U.S.C. App.1701–1720).

(i) Marine terminal operator means aperson engaged in the United States inthe business of furnishing wharfage,dock, warehouse or other terminal fa-cilities in connection with a commoncarrier.

§ 504.3 General information.(a) All comments submitted pursuant

to this part shall be addressed to theSecretary, Federal Maritime Commis-sion, 1100 L Street, NW., Washington,DC 20573.

(b) A list of Commission actions forwhich a finding of no significant im-pact has been made or for which an en-vironmental impact statement is beingprepared will be maintained by theCommission in the Office of the Sec-retary and will be available for publicinspection.

(c) Information or status reports onenvironmental statements and otherelements of the NEPA process can beobtained from the Office of Environ-mental Analysis, Federal Maritime

Commission, 1100 L Street, NW., Wash-ington, DC 20573 (telephone (202) 523–5835).

§ 504.4 Categorical exclusions.

(a) No environmental analyses needbe undertaken or environmental docu-ments prepared in connection with ac-tions which do not individually or cu-mulatively have a significant effect onthe quality of the human environmentbecause they are purely ministerial ac-tions or because they do not increaseor decrease air, water or noise pollu-tion or the use of fossil fuels,recyclables, or energy. The followingCommission actions, and rulemakingsrelated thereto, are therefore excluded:

(1) Issuance, modification, denial andrevocation of Ocean Freight Forwarderlicenses.

(2) Certification of financial respon-sibility of passenger vessels pursuantto 46 CFR part 540.

(3) Receipt of surety bonds submittedby non-vessel-operating common car-riers.

(4) Promulgation of procedural rulespursuant to 46 CFR part 502.

(5) Acceptance or rejection of tarifffilings in foreign and domestic com-merce.

(6) Consideration of special permis-sion applications filed pursuant to 46CFR part 514.

(7) Receipt of terminal tariffs pursu-ant to 46 CFR part 514.

(8) Suspension of and/or decision toinvestigate tariff schedules pursuant tosection 3 of the Intercoastal ShippingAct, 1933.

(9) Consideration of amendments toagreements filed pursuant to section 15of the Shipping Act, 1916 or section 5 ofthe Shipping Act of 1984, which do notincrease the authority set forth in theeffective agreement.

(10) Consideration of agreements be-tween common carriers which solelyaffect intraconference or inter-rateagreement relationships or pertain toadministrative matters of conferencesor rate agreements.

(11) Consideration of agreements be-tween common carriers to discuss, pro-pose or plan future action, the imple-mentation of which requires filing afurther agreement.


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(12) Consideration of exclusive ornon-exclusive equipment interchangeor husbanding agreements.

(13) Receipt of non-exclusive trans-shipment agreements.

(14) Action relating to collective bar-gaining agreements.

(15) Action pursuant to section 9 ofthe Shipping Act of 1984 concerning thejustness and reasonableness of con-trolled carriers’ rates, charges, classi-fications, rules or regulations.

(16) Receipt of self-policing reports orshipper requests and complaints.

(17) Consideration of financial reportsprepared by common carriers in the do-mestic offshore trades.

(18) Consideration of actions solelyaffecting the environment of a foreigncountry.

(19) Action taken on special docketapplications pursuant to 46 CFR 502.92.

(20) Consideration of matters relatedsolely to the issue of Commission juris-diction.

(21) Investigations conducted pursu-ant to 46 CFR part 555.

(22) Investigatory and adjudicatoryproceedings, the purpose of which is toascertain past violations of the Ship-ping Act, 1916 or the Shipping Act of1984.

(23) [Reserved](24) Action regarding access to public

information pursuant to 46 CFR part503.

(25) Action regarding receipt and re-tention of minutes of conference meet-ings.

(26) Administrative procurements(general supplies).

(27) Contracts for personal services.(28) Personnel actions.(29) Requests for appropriations.(30) Consideration of all agreements

involving marine terminal facilitiesand/or services except those requiringsubstantial levels of construction,dredging, land-fill, energy usage andother activities which may have a sig-nificant environmental effect.

(31) Consideration of agreements reg-ulating employee wages, hours of work,working conditions or labor exchanges.

(32) Consideration of general agencyagreements involving ministerial du-ties of a common carrier such as inter-nal management, cargo solicitation,

booking of cargo, or preparation of doc-uments.

(33) Consideration of agreements per-taining to credit rules.

(34) Consideration of agreements in-volving performance bonds to a con-ference from a conference memberguaranteeing compliance by the mem-ber with the rules and regulations ofthe conference.

(35) Consideration of agreements be-tween members of two or more con-ferences or other rate-fixing agree-ments to discuss and agree upon com-mon self-policing systems and cargo in-spection services.

(b) If interested persons allege that acategorically-excluded action will havea significant environmental effect (e.g.,increased or decreased air, water ornoise pollution; use of recyclables; useof fossil fuels or energy), they shall, bywritten submission to the Commis-sion’s Office of Environmental Analysis(OEA), explain in detail their reasons.The OEA shall review these submis-sions and determine, not later than ten(10) days after receipt, whether to pre-pare an environmental assessment. Ifthe OEA determines not to prepare anenvironmental assessment, such per-sons may petition the Commission forreview of the OEA’s decision within ten(10) days of receipt of notice of such de-termination.

(c) If the OEA determines that the in-dividual or cumulative effect of a par-ticular action otherwise categoricallyexcluded offers a reasonable potentialof having a significant environmentalimpact, it shall prepare an environ-mental assessment pursuant to § 504.5.

[49 FR 44415, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984; 56 FR 50662, Oct. 8, 1991; 60 FR 27229,May 23, 1995]

§ 504.5 Environmental assessments.(a) Every Commission action not spe-

cifically excluded under § 504.4 shall besubject to an environmental assess-ment.

(b) The OEA may publish in the FED-ERAL REGISTER a notice of intent toprepare an environmental assessmentbriefly describing the nature of the po-tential or proposed action and invitingwritten comments to aid in the prepa-ration of the environmental assess-ment and early identification of the


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46 CFR Ch. IV (10–1–96 Edition)§ 504.6

significant environmental issues. Suchcomments must be received by theCommission no later than ten (10) daysfrom the date of publication of the no-tice in the FEDERAL REGISTER.

§ 504.6 Finding of no significant im-pact.

(a) If upon completion of an environ-mental assessment, the OEA deter-mines that a potential or proposed ac-tion will not have a significant impacton the quality of the human environ-ment of the United States or of theglobal commons, a finding of no signifi-cant impact shall be prepared and no-tice of its availability published in theFEDERAL REGISTER. This documentshall include the environmental assess-ment or a summary of it, and shallbriefly present the reasons why the po-tential or proposed action, not other-wise excluded under § 504.4 will nothave a significant effect on the humanenvironment and why, therefore, an en-vironmental impact statement (EIS)will not be prepared.

(b) Petitions for review of a finding ofno significant impact must be receivedby the Commission within ten (10) daysfrom the date of publication of the no-tice of its availability in the FEDERAL

REGISTER. The Commission shall re-view the petitions and either denythem or order the OEA to prepare anEIS pursuant to § 504.7. The Commis-sion shall, within ten (10) days of re-ceipt of the petition, serve copies of itsorder upon all parties who filed com-ments concerning the potential or pro-posed action or who filed petitions forreview.

§ 504.7 Environmental impact state-ments.

(a) General. (1) An environmental im-pact statement (EIS) shall be preparedby the OEA when the environmentalassessment indicates that a potentialor proposed action may have a signifi-cant impact upon the environment ofthe United States or the global com-mons.

(2) The EIS process will commence:(i) For adjudicatory proceedings,

when the Commission issues an orderof investigation or a complaint is filed;

(ii) For rulemaking or legislativeproposals, upon issuance of the pro-posal by the Commission; and

(iii) For other actions, the time theaction is noticed in the FEDERAL REG-ISTER.

(3) The major decision points in theEIS process are:

(i) The issuance of an initial decisionin those cases assigned to be heard byan Administrative Law Judge (ALJ);and

(ii) The issuance of the Commission’sfinal decision or report on the action.

(4) The EIS shall consider potentiallysignificant impacts upon the quality ofthe human environment of the UnitedStates and, in appropriate cases, uponthe environment of the global com-mons outside the jurisdiction of anynation.

(b) Draft environmental impact state-ments. (1) The OEA will initially pre-pare a draft environmental impactstatement (DEIS) in accordance with 40CFR part 1502.

(2) The DEIS shall be distributed toevery party to a Commission proceed-ing for which it was prepared. Therewill be no fee charged to such parties.One copy per person will also be pro-vided to interested persons at their re-quest. The fee charged such personsshall be that provided in § 503.43 of thischapter.

(3) Comments on the DEIS must bereceived by the Commission within ten(10) days of the date the EnvironmentalProtection Agency (EPA) publishes inthe FEDERAL REGISTER notice that theDEIS was filed with it. Sixteen copiesshall be submitted as provided in§ 504.3(a). Comments shall be as specificas possible and may address the ade-quacy of the DEIS or the merits of thealternatives discussed in it. All com-ments received will be made availableto the public. Extensions of time forcommenting on the DEIS may begranted by the Commission for up toten (10) days if good cause is shown.

(c) Final environmental impact state-ments. (1) After receipt of comments onthe DEIS, the OEA will prepare a finalenvironmental impact statement(FEIS) pursuant to 40 CFR part 1502,which shall include a discussion of thepossible alternative actions to a poten-tial or proposed action. The FEIS will


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be distributed in the same manner asspecified in paragraph (b)(2) of this sec-tion.

(2) The FEIS shall be prepared priorto the Commission’s final decision andshall be filed with the Secretary, Fed-eral Maritime Commission. Upon fil-ing, it shall become part of the admin-istrative record.

(3) For any Commission action whichhas been assigned to an ALJ for evi-dentiary hearing:

(i) The FEIS shall be submitted priorto the close of the record, and

(ii) The ALJ shall consider the envi-ronmental impacts and alternativescontained in the FEIS in preparing theinitial decision.

(4)(i) For all proposed Commissionactions, any party may, by petition tothe Commission within ten (10) daysfollowing EPA’s notice in the FEDERAL

REGISTER, assert that the FEIS con-tains a substantial and material errorof fact which can only be properly re-solved by conducting an evidentiaryhearing, and expressly request thatsuch a hearing be held. Other partiesmay submit replies to the petitionwithin ten (10) days of its receipt.

(ii) The Commission may delineatethe issue(s) and refer them to an ALJfor expedited resolution or may electto refer the petition to an ALJ for con-sideration.

(iii) The ALJ shall make findings offact on the issue(s) and shall certifysuch findings to the Commission as asupplement to the FEIS. To the extentthat such findings differ from theFEIS, it shall be modified by the sup-plement.

(iv) Discovery may be granted by theALJ on a showing of good cause and, ifgranted, shall proceed on an expeditedbasis.

[49 FR 44415, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 504.8 Record of decision.

The Commission shall consider eachalternative described in the FEIS in itsdecisionmaking and review process. Atthe time of its final report or order, theCommission shall prepare a record ofdecision pursuant to 40 CFR 1505.2.

§ 504.9 Information required by theCommission.

(a) Upon request of OEA, a person fil-ing a complaint, protest, petition oragreement requesting Commission ac-tion shall submit to OEA, no later thanten (10) days from the date of the re-quest, a statement setting forth, in de-tail, the impact of the requested Com-mission action on the quality of thehuman environment, if such requestedaction will:

(1) Alter cargo routing patterns be-tween ports or change modes of trans-portation;

(2) Change rates or services forrecyclables;

(3) Change the type, capacity or num-ber of vessels employed in a specifictrade; or

(4) Alter terminal or port facilities.(b) The statement submitted shall, to

the fullest extent possible, include:(1) The probable impact of the re-

quested Commission action on the en-vironment (e.g., the use of energy ornatural resources, the effect on air,noise, or water pollution), compared tothe environmental impact created byexisting uses in the area affected by it;

(2) Any adverse environmental effectswhich cannot be avoided if the Com-mission were to take or adopt the re-quested action; and

(3) Any alternatives to the requestedCommission action.

(c) If environmental impacts, eitheradverse or beneficial, are alleged, theyshould be sufficiently identified andquantified to permit meaningful re-view. Individuals may contact the OEAfor informal assistance in preparingthis statement. The OEA shall inde-pendently evaluate the informationsubmitted and shall be responsible forassuring its accuracy if used by it inthe preparation of an environmentalassessment or EIS.

(d) In all cases, the OEA may requestevery common carrier by water, or ma-rine terminal operator, or any officer,agent or employee thereof, as well asall parties to proceedings before theCommission, to submit, within ten (10)days of such request, all material infor-mation necessary to comply withNEPA and this part. Information not


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46 CFR Ch. IV (10–1–96 Edition)§ 504.10

produced in response to an informal re-quest may be obtained by the Commis-sion pursuant to section 21 of the Ship-ping Act, 1916, or section 15 of the Ship-ping Act of 1984.

[49 FR 44415, Nov. 6, 1984; 49 FR 47395, Dec. 4,1984]

§ 504.10 Time constraints on final ad-ministrative actions.

No decision on a proposed actionshall be made or recorded by the Com-mission until the later of the followingdates unless reduced pursuant to 40CFR 1506.10(d), or unless required by astatutorily-prescribed deadline on theCommission action:

(a) Forty (40) days after EPA’s publi-cation of the notice described in§ 504.7(b) for a DEIS; or

(b) Ten (10) days after publication ofEPA’s notice for an FEIS.


This section displays the controlnumbers assigned to information col-lection requirements of the Commis-sion in this part by the Office of Man-agement and Budget pursuant to thePaperwork Reduction Act of 1980, Pub-lic Law 96–511. The Commission intendsthat this section comply with the re-quirements of section 3507(f) of the Pa-perwork Reduction Act, which requiresthat agencies display a current controlnumber assigned by the Director of theOffice of Management and Budget(OMB) for each agency information col-lection requirement:

Section Current OMBControl No.

504.4 through 504.7 ...................................... 3072–0035504.9 .............................................................. 3072–0035.

PART 505—ADMINISTRATIVE OFFSET

505.1 Scope of regulations.505.2 Definitions.505.3 General.505.4 Notification procedures.505.5 Agency review.505.6 Written agreement for repayment.505.7 Administrative offset.505.8 Jeopardy procedure.

AUTHORITY: 31 U.S.C. 3701; 31 U.S.C. 3711; 31U.S.C. 3716.

SOURCE: 61 FR 50444, Sept. 26, 1996, unlessotherwise noted.

EFFECTIVE DATE NOTE: At 61 FR 50444,Sept. 26, 1996, part 505 was added, effectiveOct. 28, 1996.

§ 505.1 Scope of regulations.These regulations apply to the collec-

tion of debts owed to the United Statesarising from transactions with theCommission, or where a request for anoffset is received by the Commissionfrom another agency. These regula-tions are consistent with the FederalClaims Collection Standards on admin-istrative offset issued jointly by theDepartment of Justice and the GeneralAccounting Office as set forth in 4 CFR102.3.

§ 505.2 Definitions.(a) Administrative offset, as defined in

31 U.S.C. 3701(a)(1), means withholdingmoney payable by the United StatesGovernment to, or held by the Govern-ment for, a person to satisfy a debt theperson owes the Government.

(b) Person includes a natural personor persons, profit or non-profit corpora-tion, partnership, association, trust,estate, consortium, or other entitywhich is capable of owing a debt to theUnited States Government except thatagencies of the United States, or of anyState or local government shall be ex-cluded.

§ 505.3 General.(a) The Chairman or his or her des-

ignee, after attempting to collect adebt from a person under section 3(a) ofthe Federal Claims Collection Act of1966, as assembled (31 U.S.C. 3711(a)),may collect the debt by administrativeoffset subject to the following:

(1) The debt is certain in amount; and(2) It is in the best interests of the

United States to collect the debt by ad-ministrative offset because of the de-creased costs of collection and the ac-celeration in the payment of the debt.

(b) The Chairman, or his or her des-ignee, may initiate administrative off-set with regard to debts owed by a per-son to another agency of the UnitedStates Government, upon receipt of arequest from the head of another agen-cy or his or her designee, and a certifi-cation that the debt exists and that the


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person has been afforded the necessarydue process rights.

(c) The Chairman, or his or her des-ignee, may request another agencythat holds funds payable to a Commis-sion debtor to offset the debt againstthe funds held and will provide certifi-cation that:

(1) The debt exists; and(2) The person has been afforded the

necessary due process rights.(d) If the six-year period for bringing

action on a debt provided in 28 U.S.C.2415 has expired, then administrativeoffset may be used to collect the debtonly if the costs of bringing such ac-tion are likely to be less than theamount of the debt.

(e) No collection by administrativeoffset shall be made on any debt thathas been outstanding for more than 10years unless facts material to the Gov-ernment’s right to collect the debtwere not known, and reasonably couldnot have been known, by the official orofficials responsible for discovering andcollecting such debt.

(f) These regulations do not apply to:(1) A case in which administrative

offset of the type of debt involved is ex-plicitly provided for or prohibited byanother statute; or

(2) Debts owed by other agencies ofthe United States or by any State orlocal government.

§ 505.4 Notification procedures.

Before collecting any debt throughadministrative offset, a notice of in-tent to offset shall be sent to the debt-or by certified mail, return receipt re-quested, at the most current addressthat is available to the Commission.The notice shall provide:

(a) A description of the nature andamount of the debt and the intentionof the Commission to collect the debtthrough administrative offset;

(b) An opportunity to inspect andcopy the records of the Commissionwith respect to the debt;

(c) An opportunity for review withinthe Commission of the determinationof the Commission with respect to thedebt; and

(d) An opportunity to enter into awritten agreement for the repaymentof the amount of the debt.

§ 505.5 Agency review.

(a) A debtor may dispute the exist-ence of the debt, the amount of debt, orthe terms of repayment. A request toreview a disputed debt must be submit-ted to the Commission official who pro-vided notification within 30 calendardays of the receipt of the written no-tice described in § 505.4.

(b) If the debtor requests an oppor-tunity to inspect or copy the Commis-sion’s records concerning the disputedclaim, 10 business days will be grantedfor the review. The time period will bemeasured from the time the request forinspection is granted or from the timethe copy of the records is received bythe debtor.

(c) Pending the resolution of a dis-pute by the debtor, transactions in anyof the debtor’s account(s) maintainedin the Commission may be temporarilysuspended. Depending on the type oftransaction the suspension could pre-clude its payment, removal, or trans-fer, as well as prevent the payment ofinterest or discount due thereon.Should the dispute be resolved in thedebtor’s favor, the suspension will beimmediately lifted.

(d) During the review period, inter-est, penalties, and administrative costsauthorized under the Federal ClaimsCollection Act of 1996, as amended, willcontinue to accrue.

§ 505.6 Written agreement for repay-ment.

A debtor who admits liability butelects not to have the debt collected byadministrative offset will be affordedan opportunity to negotiate a writtenagreement for the repayment of thedebt. If the financial condition of thedebtor does not support the ability topay in one lump-sum, reasonable in-stallments may be considered. No in-stallment arrangement will be consid-ered unless the debtor submits a finan-cial statement, executed under penaltyof perjury, reflecting the debtor’s as-sets, liabilities, income, and expenses.The financial statement must be sub-mitted within 10 business days of theCommission’s request for the state-ment. At the Commission’s option, aconfess-judgment note or bond of in-demnity with surety may be required


128

46 CFR Ch. IV (10–1–96 Edition)§ 505.7

for installment agreements. Notwith-standing the provisions of this section,any reduction or compromise of aclaim will be governed by 4 CFR part103.

§ 505.7 Administrative offset.(a) If the debtor does not exercise the

right to request a review within thetime specified in § 505.5 or if as a resultof the review, it is determined that thedebt is due and no written agreement isexecuted, then administrative offsetshall be ordered in accordance withthese regulations without further no-tice.

(b) Requests for offset to other Fed-eral agencies. The Chairman or his orher designee may request that fundsdue and payable to a debtor by anotherFederal agency be administratively off-set in order to collect a debt owed tothe Commission by that debtor. In re-questing administrative offset, theCommission, as creditor, will certify inwriting to the Federal agency holdingfunds of the debtor:

(1) That the debtor owes the debt;(2) The amount and basis of the debt;

and(3) That the agency has complied

with the requirements of 31 U.S.C. 3716,its own administrative offset regula-tions and the applicable provisions of 4CFR part 102 with respect to providingthe debtor with due process.

(c) Requests for offset from otherFederal agencies. Any Federal agencymay request that funds due and pay-able to its debtor by the Commissionbe administratively offset in order tocollect a debt owed to such Federalagency by the debtor. The Commissionshall initiate the requested offset onlyupon:

(1) Receipt of written certificationfrom the creditor agency:

(i) That the debtor owes the debt;(ii) The amount and basis of the debt;(iii) That the agency has prescribed

regulations for the exercise of adminis-trative offset; and

(iv) That the agency has compliedwith its own administrative offset reg-ulations and with the applicable provi-sions of 4 CFR part 102, including pro-viding any required hearing or review.

(2) A determination by the Commis-sion that collection by offset against

funds payable by the Commissionwould be in the best interest of theUnited States as determined by thefacts and circumstances of the particu-lar case, and that such offset would nototherwise be contrary to law.

§ 505.8 Jeopardy procedure.

The Commission may effect an ad-ministrative offset against a paymentto be made to the debtor prior to thecompletion of the procedures requiredby §§ 505.4 and 505.5 of this part if fail-ure to take the offset would substan-tially jeopardize the Commission’sability to collect the debt, and thetime before the payment is to be madedoes not reasonably permit the comple-tion of those procedures. Such prioroffset shall be promptly followed bythe completion of those procedures.Amounts recovered by offset but laterfound not to be owed to the Commis-sion shall be promptly refunded.

PART 507—ENFORCEMENT OFNONDISCRIMINATION ON THEBASIS OF HANDICAP IN PRO-GRAMS OR ACTIVITIES CON-DUCTED BY THE FEDERAL MARI-TIME COMMISSION

Sec.507.101 Purpose.507.102 Application.507.103 Definitions.507.104—507.109 [Reserved]507.110 Self-evaluation.507.111 Notice.507.112—507.129 [Reserved]507.130 General prohibitions against dis-

crimination.507.131—507.139 [Reserved]507.140 Employment.507.141—507.148 [Reserved]507.149 Program accessibility: Discrimina-

tion prohibited.507.150 Program accessibility: Existing fa-

cilities.507.151 Program accessibility: New con-

struction and alterations.507.152—507.159 [Reserved]507.160 Communications.507.161—507.169 [Reserved]507.170 Compliance procedures.507.171—507.999 [Reserved]

AUTHORITY: 29 U.S.C. 794.

SOURCE: 51 FR 22895, 22896, June 23, 1986,unless otherwise noted.


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§ 507.101 Purpose.This part effectuates section 119 of

the Rehabilitation, ComprehensiveServices, and Developmental Disabil-ities Amendments of 1978, whichamended section 504 of the Rehabilita-tion Act of 1973 to prohibit discrimina-tion on the basis of handicap in pro-grams or activities conducted by Exec-utive agencies or the United StatesPostal Service.

§ 507.102 Application.This part applies to all programs or

activities conducted by the agency.

§ 507.103 Definitions.For purposes of this part, the term—Assistant Attorney General means the

Assistant Attorney General, CivilRights Division, United States Depart-ment of Justice.

Auxiliary aids means services or de-vices that enable persons with im-paired sensory, manual, or speakingskills to have an equal opportunity toparticipate in, and enjoy the benefitsof, programs or activities conducted bythe agency. For example, auxiliary aidsuseful for persons with impaired visioninclude readers, brailled materials,audio recordings, telecommunicationsdevices and other similar services anddevices. Auxiliary aids useful for per-sons with impaired hearing includetelephone handset amplifiers, tele-phones compatible with hearing aids,telecommunication devices for deafpersons (TDD’s), interpreters,notetakers, written materials, andother similar services and devices.

Complete complaint means a writtenstatement that contains the complain-ant’s name and address and describesthe agency’s alleged discriminatory ac-tion in sufficient detail to inform theagency of the nature and date of the al-leged violation of section 504. It shallbe signed by the complainant or bysomeone authorized to do so on his orher behalf. Complaints filed on behalfof classes or third parties shall describeor identify (by name, if possible) thealleged victims of discrimination.

Facility means all or any portion ofbuildings, structures, equipment,roads, walks, parking lots, rollingstock or other conveyances, or otherreal or personal property.

Handicapped person means any personwho has a physical or mental impair-ment that substantially limits one ormore major life activities, has a recordof such an impairment, or is regardedas having such an impairment.

As used in this definition, the phrase:(1) Physical or mental impairment in-

cludes—(i) Any physiological disorder or con-

dition, cosmetic disfigurement, or ana-tomical loss affecting one or more ofthe following body systems: Neuro-logical; musculoskeletal; special senseorgans; respiratory, including speechorgans; cardiovascular; reproductive;digestive; genitourinary; hemic andlymphatic; skin; and endocrine; or

(ii) Any mental or psychological dis-order, such as mental retardation, or-ganic brain syndrome, emotional ormental illness, and specific learningdisabilities. The term physical or mentalimpairment includes, but is not limitedto, such diseases and conditions as or-thopedic, visual, speech, and hearingimpairments, cerebral palsy, epilepsy,muscular dystrophy, multiple sclerosis,cancer, heart disease, diabetes, mentalretardation, emotional illness, anddrug addiction and alocoholism.

(2) Major life activities includes func-tions such as caring for one’s self, per-forming manual tasks, walking, seeing,hearing, speaking, breathing, learning,and working.

(3) Has a record of such an impairmentmeans has a history of, or has beenmisclassified as having, a mental orphysical impairment that substantiallylimits one or more major life activi-ties.

(4) Is regarded as having an impairmentmeans—

(i) Has a physical or mental impair-ment that does not substantially limitmajor life activities but is treated bythe agency as constituting such a limi-tation;

(ii) Has a physical or mental impair-ment that substantially limits majorlife activities only as a result of the at-titudes of others toward such impair-ment; or

(iii) Has none of the impairments de-fined in paragraph (1) of this definitionbut is treated by the agency as havingsuch an impairment.


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46 CFR Ch. IV (10–1–96 Edition)§ 507.110

Historic preservation programs meansprograms conducted by the agency thathave preservation of historic propertiesas a primary purpose.

Historic properties means those prop-erties that are listed or eligible forlisting in the National Register of His-toric Places or properties designated ashistoric under a statute of the appro-priate State or local government body.

Qualified handicapped person means—(1) With respect to preschool, elemen-

tary, or secondary education servicesprovided by the agency, a handicappedperson who is a member of a class ofpersons otherwise entitled by statute,regulation, or agency policy to receiveeducation services from the agency.

(2) With respect to any other agencyprogram or activity under which a per-son is required to perform services orto achieve a level of accomplishment, ahandicapped person who meets the es-sential eligibility requirements andwho can acheive the purpose of the pro-gram or activity without modificationsin the program or activity that theagency can demonstrate would resultin a fundamental alteration in its na-ture;

(3) With respect to any other pro-gram or activity, a handicapped personwho meets the essential eligibility re-quirements for participation in, or re-ceipt of benefits from, that program oractivity; and

(4) Qualified handicapped person is de-fined for purposes of employment in 29CFR 1613.702(f), which is made applica-ble to this part by § 507.140.

Section 504 means section 504 of theRehabilitation Act of 1973 (Pub. L. 93–112, 87 Stat. 394 (29 U.S.C. 794)), asamended by the Rehabilitation ActAmendments of 1974 (Pub. L. 93–516, 88Stat. 1617), and the Rehabilitation,Comprehensive Services, and Devel-opmental Disabilities Amendments of1978 (Pub. L. 95–602, 92 Stat. 2955). Asused in this part, section 504 appliesonly to programs or activities con-ducted by Executive agencies and notto federally assisted programs.

Substantial impairment means a sig-nificant loss of the integrity of finishedmaterials, design quality, or specialcharacter resulting from a permanentalteration.

§§ 507.104—507.109 [Reserved]

§ 507.110 Self-evaluation.(a) The agency shall, by August 24,

1987, evaluate its current policies andpractices, and the effects thereof, thatdo not or may not meet the require-ments of this part, and, to the extentmodification of any such policies andpractices is required, the agency shallproceed to make the necessary modi-fications.

(b) The agency shall provide an op-portunity to interested persons, includ-ing handicapped persons or organiza-tions representing handicapped per-sons, to participate in the self-evalua-tion process by submitting comments(both oral and written).

(c) The agency shall, until threeyears following the completion of theself-evaluation, maintain on file andmake available for public inspection:

(1) A description of areas examinedand any problems identified, and

(2) A description of any modificationsmade.

§ 507.111 Notice.The agency shall make available to

employees, applicants, participants,beneficiaries, and other interested per-sons such information regarding theprovisions of this part and its applica-bility to the programs or activitiesconducted by the agency, and makesuch information available to them insuch manner as the head of the agencyfinds necessary to apprise such personsof the protections against discrimina-tion assured them by section 504 andthis regulation.

§§ 507.112—507.129 [Reserved]

§ 507.130 General prohibitions againstdiscrimination.

(a) No qualified handicapped personshall, on the basis of handicap, be ex-cluded from participation in, be deniedthe benefits of, or otherwise be sub-jected to discrimination under any pro-gram or activity conducted by theagency.

(b)(1) The agency, in providing anyaid, benefit, or service, may not, di-rectly or through contractual, licens-ing, or other arrangements, on thebasis of handicap—


131


(i) Deny a qualified handicapped per-son the opportunity to participate inor benefit from the aid, benefit, orservice;

(ii) Afford a qualified handicappedperson an opportunity to participate inor benefit from the aid, benefit, orservice that is not equal to that af-forded others;

(iii) Provide a qualified handicappedperson with an aid, benefit, or servicethat is not as effective in affordingequal opportunity to obtain the sameresult, to gain the same benefit, or toreach the same level of achievement asthat provided to others;

(iv) Provide different or separate aid,benefits, or services to handicappedpersons or to any class of handicappedpersons than is provided to others un-less such action is necessary to providequalified handicapped persons with aid,benefits, or services that are as effec-tive as those provided to others;

(v) Deny a qualified handicapped per-son the opportunity to participate as amember of planning or advisory boards;or

(vi) Otherwise limit a qualifiedhandicapped person in the enjoymentof any right, privilege, advantage, oropportunity enjoyed by others receiv-ing the aid, benefit, or service.

(2) The agency may not deny a quali-fied handicapped person the oppor-tunity to participate in programs oractivities that are not separate or dif-ferent, despite the existence of permis-sibly separate or different programs oractivities.

(3) The agency may not, directly orthrough contractual or otherarrangments, utilize criteria or meth-ods of administration the purpose or ef-fect of which would—

(i) Subject qualified handicapped per-sons to discrimination on the basis ofhandicap; or

(ii) Defeat or substantially impair ac-complishment of the objectives of aprogram activity with respect tohandicapped persons.

(4) The agency may not, in determin-ing the site or location of a facility,make selections the purpose or effectof which would—

(i) Exclude handicapped personsfrom, deny them the benefits of, or oth-erwise subject them to discrimination

under any program or activity con-ducted by the agency; or

(ii) Defeat or substantially impairthe accomplishment of the objectivesof a program or activity with respectto handicapped persons.

(5) The agency, in the selection ofprocurement contractors, may not usecriteria that subject qualified handi-capped persons to discrimination onthe basis of handicap.

(6) The agency may not administer alicensing or certification program in amanner that subjects qualified handi-capped persons to discrimination onthe basis of handicap, nor may theagency establish requirements for theprograms or activities of licensees orcertified entities that subject qualifiedhandicapped persons to discriminationon the basis of handicap. However, theprograms or activities of entities thatare licensed or certified by the agencyare not, themselves, covered by thispart.

(c) The exclusion of nonhandicappedpersons from the benefits of a programlimited by Federal statute or Execu-tive order to handicapped persons orthe exclusion of a specific class ofhandicapped persons from a programlimited by Federal statute or Execu-tive order to a different class of handi-capped persons is not prohibited bythis part.

(d) The agency shall administer pro-grams and activities in the most inte-grated setting appropriate to the needsof qualified handicapped persons.

§§ 507.131—507.139 [Reserved]

§ 507.140 Employment.

No qualified handicapped personshall, on the basis of handicap, be sub-jected to discrimination in employ-ment under any program or activityconducted by the agency. The defini-tions, requirements, and procedures ofsection 501 of the Rehabilitation Act of1973 (29 U.S.C. 791), as established bythe Equal Employment OpportunityCommission in 29 CFR part 1613, shallapply to employment in federally con-ducted programs or activities.


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46 CFR Ch. IV (10–1–96 Edition)§ 507.149

§§ 507.141—507.148 [Reserved]

§ 507.149 Program accessibility: Dis-crimination prohibited.

Except as otherwise provided in§ 507.150, no qualified handicapped per-son shall, because the agency’s facili-ties are inaccessible to or unusable byhandicapped persons, be denied thebenefits of, be excluded from participa-tion in, or otherwise be subjected todiscrimination under any program oractivity conducted by the agency.

§ 507.150 Program accessibility: Exist-ing facilities.

(a) General. The agency shall operateeach program or activity so that theprogram or activity, when viewed in itsentirety, is readily accessible to andusable by handicapped persons. Thisparagraph does not—

(1) Necessarily require the agency tomake each of its existing facilities ac-cessible to and usable by handicappedpersons;

(2) In the case of historic preserva-tion programs, require the agency totake any action that would result in asubstantial impairment of significanthistoric features of an historic prop-erty; or

(3) Require the agency to take anyaction that it can demonstrate wouldresult in a fundamental alteration inthe nature of a program or activity orin undue financial and administrativeburdens. In those circumstances whereagency personnel believe that the pro-posed action would fundamentallyalter the program or activity or wouldresult in undue financial and adminis-trative burdens, the agency has theburden of proving that compliance with§ 507.150(a) would result in such alter-ation or burdens. The decision thatcompliance would result in such alter-ation or burdens must be made by theagency head or his or her designeeafter considering all agency resourcesavailable for use in the funding and op-eration of the conducted program oractivity, and must be accompanied bya written statement of the reasons forreaching that conclusion. If an actionwould result in such an alteration orsuch burdens, the agency shall takeany other action that would not resultin such an alteration or such burdens

but would nevertheless ensure thathandicapped persons receive the bene-fits and services of the program or ac-tivity.

(b) Methods—(1) General. The agencymay comply with the requirements ofthis section through such means as re-design of equipment, reassignment ofservices to accessible buildings, assign-ment of aides to beneficiaries, homevisits, delivery of services at alternateaccessible sites, alteration of existingfacilities and construction of new fa-cilities, use of accessible rolling stock,or any other methods that result inmaking its programs or activities read-ily accessible to and usable by handi-capped persons. The agency is not re-quired to make structural changes inexisting facilities where other methodsare effective in achieving compliancewith this section. The agency, in mak-ing alterations to existing buildings,shall meet accessibility requirementsto the extent compelled by the Archi-tectural Barriers Act of 1968, as amend-ed (42 U.S.C. 4151–4157), and any regula-tions implementing it. In choosingamong available methods for meetingthe requirements of this section, theagency shall give priority to thosemethods that offer programs and ac-tivities to qualified handicapped per-sons in the most integrated setting ap-propriate.

(2) Historic preservation programs. Inmeeting the requirements of § 507.150(a)in historic preservation programs, theagency shall give priority to methodsthat provide physical access to handi-capped persons. In cases where a phys-ical alteration to an historic propertyis not required because of § 507.150 (a)(2)or (a)(3), alternative methods ofachieving program accessibility in-clude—

(i) Using audio-visual materials anddevices to depict those portions of anhistoric property that cannot other-wise be made accessible;

(ii) Assigning persons to guide handi-capped persons into or through por-tions of historic properties that cannototherwise be made accessible; or

(iii) Adopting other innovative meth-ods.

(c) Time period for compliance. Theagency shall comply with the obliga-tions established under this section by


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October 21, 1986, except that wherestructural changes in facilities are un-dertaken, such changes shall be madeby August 22, 1989, but in any event asexpeditiously as possible.

(d) Transition plan. In the event thatstructural changes to facilities will beundertaken to achieve program acces-sibility, the agency shall develop, byFebruary 23, 1987, a transition plan set-ting forth the steps necessary to com-plete such changes. The agency shallprovide an opportunity to interestedpersons, including handicapped personsor organizations representing handi-capped persons, to participate in thedevelopment of the transition plan bysubmitting comments (both oral andwritten). A copy of the transition planshall be made available for public in-spection. The plan shall, at a mini-mum—

(1) Identify physical obstacles in theagency’s facilities that limit the acces-sibility of its programs or activities tohandicapped persons;

(2) Describe in detail the methodsthat will be used to make the facilitiesaccessible;

(3) Specify the schedule for takingthe steps necessary to achieve compli-ance with this section and, if the timeperiod of the transition plan is longerthan one year, identify steps that willbe taken during each year of the tran-sition period; and

(4) Indicate the official responsiblefor implementation of the plan.

§ 507.151 Program accessibility: Newconstruction and alterations.

Each building or part of a buildingthat is constructed or altered by, onbehalf of, or for the use of the agencyshall be designed, constructed, or al-tered so as to be readily accessible toand usable by handicapped persons.The definitions, requirements, andstandards of the Architectural BarriersAct (42 U.S.C. 4151–4157), as establishedin 41 CFR 101–19.600 to 101–19.607, applyto buildings covered by this section.

§§ 507.152—507.159 [Reserved]

§ 507.160 Communications.(a) The agency shall take appropriate

steps to ensure effective communica-tion with applicants, participants, per-

sonnel of other Federal entities, andmembers of the public.

(1) The agency shall furnish appro-priate auxiliary aids where necessaryto afford a handicapped person an equalopportunity to participate in, andenjoy the benefits of, a program or ac-tivity conducted by the agency.

(i) In determining what type of auxil-iary aid is necessary, the agency shallgive primary consideration to the re-quests of the handicapped person.

(ii) The agency need not provide indi-vidually prescribed devices, readers forpersonal use or study, or other devicesof a personal nature.

(2) Where the agency communicateswith applicants and beneficiaries bytelephone, telecommunication devicesfor deaf person (TDD’s) or equally ef-fective telecommunication systemsshall be used.

(b) The agency shall ensure that in-terested persons, including personswith impaired vision or hearing, canobtain information as to the existenceand location of accessible services, ac-tivities, and facilities.

(c) The agency shall provide signageat a primary entrance to each of its in-accessible facilities, directing users toa location at which they can obtain in-formation about accessible facilities.The international symbol for acces-sibility shall be used at each primaryentrance of an accessible facility.

(d) This section does not require theagency to take any action that it candemonstrate would result in a fun-damental alteration in the nature of aprogram or activity or in undue finan-cial and adminstrative burdens. Inthose circumstances where agency per-sonnel believe that the proposed actionwould fundamentally alter the programor activity or would result in undue fi-nancial and administrative burdens,the agency has the burden of provingthat compliance with § 507.160 would re-sult in such alteration or burdens. Thedecision that compliance would resultin such alteration or burdens must bemade by the agency head or his or herdesignee after considering all agencyresources available for use in the fund-ing and operation of the conducted pro-gram or activity, and must be accom-panied by a written statement of thereasons for reaching that conclusion. If


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46 CFR Ch. IV (10–1–96 Edition)§ 507.170

an action required to comply with thissection would result in such an alter-ation or such burdens, the agency shalltake any other action that would notresult in such an alteration or suchburdens but would nevertheless ensurethat, to the maximum extent possible,handicapped persons receive the bene-fits and services of the program or ac-tivity.

§§ 507.161—507.169 [Reserved]

§ 507.170 Compliance procedures.(a) Except as provided in paragraph

(b) of this section, this section appliesto all allegations of discrimination onthe basis of handicap in programs oractivities conducted by the agency.

(b) The agency shall process com-plaints alleging violations of section504 with respect to employment accord-ing to the procedures established bythe Equal Employment OpportunityCommission in 29 CFR part 1613 pursu-ant to section 501 of the RehabilitationAct of 1973 (29 U.S.C. 791).

(c) The Director, Bureau of Adminis-tration shall be responsible for coordi-nating implementation of this section.Complaints may be sent to the Direc-tor, Bureau of Administration, FederalMaritime Commission, 1100 L StreetNW., Room 12211, Washington, DC20573.

(d) The agency shall accept and in-vestigate all complete complaints forwhich it has jurisdiction. All completecomplaints must be filed within 180days of the alleged act of discrimina-tion. The agency may extend this timeperiod for good cause.

(e) If the agency receives a complaintover which it does not have jurisdic-tion, it shall promptly notify the com-plainant and shall make reasonable ef-forts to refer the complaint to the ap-propriate government entity.

(f) The agency shall notify the Archi-tectural and Transportation BarriersCompliance Board upon receipt of any

complaint alleging that a building orfacility that is subject to the Architec-tural Barriers Act of 1968, as amended(42 U.S.C. 4151–4157), or section 502 ofthe Rehabilitation Act of 1973, asamended (29 U.S.C. 792), is not readilyaccessible to and usable by handi-capped persons.

(g) Within 180 days of the receipt of acomplete complaint for which it has ju-risdiction, the agency shall notify thecomplainant of the results of the inves-tigation in a letter containing—

(1) Findings of fact and conclusionsof law;

(2) A description of a remedy for eachviolation found; and

(3) A notice of the right to appeal.(h) Appeals of the findings of fact and

conclusions of law or remedies must befiled by the complainant within 90 daysof receipt from the agency of the letterrequired by § 507.170(g). The agencymay extend this time for good cause.

(i) Timely appeals shall be acceptedand processed by the head of the agen-cy.

(j) The head of the agency shall no-tify the complainant of the results ofthe appeal within 60 days of the receiptof the request. If the head of the agen-cy determines that additional informa-tion is needed from the complainant,he or she shall have 60 days from thedate of receipt of the additional infor-mation to make his or her determina-tion on the appeal.

(k) The time limits cited in para-graphs (g) and (j) of this section may beextended with the permission of theAssistant Attorney General.

(l) The agency may delegate its au-thority for conducting complaint in-vestigations to other Federal agencies,except that the authority for makingthe final determination may not bedelegated to another agency.

[51 FR 22895, June 23, 1986, as amended at 51FR 22896, June 23, 1986]

§§ 507.171—507.999 [Reserved]


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SUBCHAPTER B—REGULATIONS AFFECTING MARITIME CAR-RIERS, OCEAN FREIGHT FORWARDERS, MARINE TERMINALOPERATIONS, PASSENGER VESSELS, TARIFFS AND SERVICECONTRACTS

PART 510—LICENSING OF OCEANFREIGHT FORWARDERS

Subpart A—General

Sec.510.1 Scope.510.2 Definitions.510.3 License; when required.510.4 License; when not required.

Subpart B—Eligibility and Procedure forLicensing; Bond Requirements

510.11 Basic requirements for licensing; eli-gibility.

510.12 Application for license.510.13 Investigation of applicants.510.14 Surety bond requirements.510.15 Denial of license.510.16 Revocation or suspension of license.510.17 Application after revocation or de-

nial.510.18 Issuance and use of license.510.19 Changes in organization.

Subpart C—Duties and Responsibilities ofFreight Forwarders; ForwardingCharges; Reports to Commission

510.21 General duties.510.22 Forwarder and principal; fees.510.23 Forwarder and carrier; compensation.510.24 Records required to be kept.510.25 Anti-rebate certifications.510.91 OMB control numbers assigned pursu-


AUTHORITY: 5 U.S.C. 553; 31 U.S.C. 9701; 46U.S.C. app. 1702, 1707, 1709, 1710, 1712, 1714,1716, and 1718; 21 U.S.C. 853a.


Subpart A—General

§ 510.1 Scope.(a) This part sets forth regulations

providing for the licensing as oceanfreight forwarders of persons, includingindividuals, corporations and partner-ships, who wish to carry on the busi-ness of freight forwarding. This partalso prescribes the bonding require-ments and the duties and responsibil-ities of ocean freight forwarders, regu-

lations concerning practices of freightforwarders and common carriers, andthe grounds and procedures for revoca-tion and suspension of licenses.

(b) Information obtained under thispart is used to determine the qualifica-tions of freight forwarders and theircompliance with shipping statutes andregulations. Failure to follow the pro-visions of this part may result in de-nial, revocation or suspension of afreight forwarder license. Persons oper-ating without the proper license maybe subject to civil penalties not to ex-ceed $5,000 for each such violation un-less the violation is willfully andknowingly committed, in which casethe amount of the civil penalty maynot exceed $25,000 for each violation;for other violations of the provisions ofthis part, the civil penalties range from$5,000 to $25,000 for each violation (46U.S.C. app. 1712). Each day of a con-tinuing violation shall constitute aseparate violation.

§ 510.2 Definitions.The terms used in this part are de-

fined as follows:(a) Act means the Shipping Act of

1984 (46 U.S.C. app. 1701–1720).(b) Beneficial interest includes a lien

or interest in or right to use, enjoy,profit, benefit, or receive any advan-tage, either proprietary or financial,from the whole or any part of a ship-ment of cargo where such interestarises from the financing of the ship-ment or by operation of law, or byagreement, express or implied. Theterm beneficial interest shall not includeany obligation in favor of a freight for-warder arising solely by reason of theadvance of out-of-pocket expenses in-curred in dispatching a shipment.

(c) Branch office means any office es-tablished by or maintained by or underthe control of a licensee for the pur-pose of rendering freight forwardingservices, which office is located at anaddress different from that of the li-censee’s designated home office. This


136

46 CFR Ch. IV (10–1–96 Edition)§ 510.2

term does not include a separately in-corporated entity.

(d) Brokerage refers to payment by acommon carrier to an ocean freightbroker for the performance of servicesas specified in paragraph (m) of thissection.

(e) Common carrier means any personholding itself out to the general publicto provide transportation by water ofpassengers or cargo between the UnitedStates and a foreign country for com-pensation that:

(1) Assumes responsibility for thetransportation from the port or pointof receipt to the port or point of des-tination, and

(2) Utilizes, for all or part of thattransportation, a vessel operating onthe high seas or the Great Lakes be-tween a port in the United States anda port in a foreign country.

(f) Compensation means payment by acommon carrier to a freight forwarderfor the performance of services as spec-ified in § 510.23(c) of this part.

(g) Freight forwarding fee meanscharges billed by a freight forwarder toa shipper, consignee, seller, purchaser,or any agent thereof, for the perform-ance of freight forwarding services.

(h) Freight forwarding services refersto the dispatching of shipments on be-half of others, in order to facilitateshipment by a common carrier, whichmay include, but are not limited to,the following:

(1) Ordering cargo to port;(2) Preparing and/or processing ex-

port declarations;(3) Booking, arranging for or con-

firming cargo space;(4) Preparing or processing delivery

orders or dock receipts;(5) Preparing and/or processing ocean

bills of lading;(6) Preparing or processing consular

documents or arranging for their cer-tification;

(7) Arranging for warehouse storage;(8) Arranging for cargo insurance;(9) Clearing shipments in accordance

with United States Government exportregulations;

(10) Preparing and/or sending advancenotifications of shipments or otherdocuments to banks, shippers, or con-signees, as required;

(11) Handling freight or other moniesadvanced by shippers, or remitting oradvancing freight or other monies orcredit in connection with the dispatch-ing of shipments;

(12) Coordinating the movement ofshipments from origin to vessel; and

(13) Giving expert advice to exportersconcerning letters of credit, other doc-uments, licenses or inspections, or onproblems germane to the cargoes’ dis-patch.

(i) From the United States meansoceanborne export commerce from theUnited States, its Territories, or pos-sessions to foreign countries.

(j) Licensee is any person licensed bythe Federal Maritime Commission asan ocean freight forwarder.

(k) Non-vessel-operating common car-rier means a common carrier that doesnot operate the vessels by which theocean transportation is provided, andis a shipper in its relationship with anocean common carrier.

(l) Ocean common carrier means a ves-sel-operating common carrier but theterm does not include one engaged inocean transportation by ferry boat orocean tramp.

(m) Ocean freight broker is an entitywhich is engaged by a carrier to securecargo for such carrier and/or to sell oroffer for sale ocean transportationservices and which holds itself out tothe public as one who negotiates be-tween shipper or consignee and carrierfor the purchase, sale, conditions andterms of transportation.

(n) Ocean freight forwarder means aperson in the United States that:

(1) Dispatches shipments from theUnited States via common carriers andbooks or otherwise arranges space forthose shipments on behalf of shippers;and

(2) Processes the documentation orperforms related activities incident tothose shipments.

(o) Principal, except as used in SuretyBond Form FMC 59, Rev., refers to theshipper, consignee, seller, or purchaserof property, and to anyone acting onbehalf of such shipper, consignee, sell-er, or purchaser of property, who em-ploys the services of a licensee to fa-cilitate the ocean transportation ofsuch property.


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(p) Reduced forwarding fees meanscharges to a principal for forwardingservices that are below the licensee’susual charges for such services.

(q) Shipment means all of the cargocarried under the terms of a single billof lading.

(r) Shipper means an owner or personfor whose account the ocean transpor-tation of cargo is provided or the per-son to whom delivery is to be made.

(s) Small shipment refers to a singleshipment sent by one consignor to oneconsignee on one bill of lading whichdoes not exceed the underlying com-mon carrier’s minimum charge rule.

(t) Special contract is a contract forfreight forwarding services which pro-vides for a periodic lump sum fee.

(u) United States includes the severalStates, the District of Columbia, theCommonwealth of Puerto Rico, theCommonwealth of the Northern Mari-anas, and all other United States terri-tories and possessions.

§ 510.3 License; when required.Except as otherwise provided in this

part, a person must hold a valid oceanfreight forwarder license in order toperform freight forwarding services,and, except as provided in § 510.4, noperson shall perform, or hold out toperform, such services unless such per-son holds a valid license issued by theCommission to engage in such busi-ness. A separate license is required foreach branch office that is separatelyincorporated.

§ 510.4 License; when not required.A license is not required in the fol-

lowing circumstances:(a) Shipper. Any person whose pri-

mary business is the sale of merchan-dise may, without a license, dispatchand perform freight forwarding serviceson behalf of its own shipments, or onbehalf of shipments or consolidatedshipments of a parent, subsidiary, affil-iate, or associated company. Such per-son shall not receive compensationfrom the common carrier for any serv-ices rendered in connection with suchshipments.

(b) Employee or branch office of li-censed forwarder. An individual em-ployee or unincorporated branch officeof a licensed ocean freight forwarder is

not required to be licensed in order toact solely for such licensee, but each li-censed ocean freight forwarder will beheld strictly responsible hereunder forthe acts or omissions of any of its em-ployees rendered in connection withthe conduct of the business.

(c) Common carrier. A common car-rier, or agent thereof, may performocean freight forwarding services with-out a license only with respect to cargocarried under such carrier’s own bill oflading. Charges for such forwardingservices shall be assessed in conform-ance with the carrier’s published tariffson file with the Commission.

(d) Ocean freight brokers. An oceanfreight broker is not required to be li-censed to perform those services speci-fied in § 510.2(m).

Subpart B—Eligibility and Proce-dure for Licensing; Bond Re-quirements

§ 510.11 Basic requirements for licens-ing; eligibility.

(a) Necessary qualifications. To be eli-gible for an ocean freight forwarder’slicense, the applicant must dem-onstrate to the Commission that:

(1) It possesses the necessary experi-ence, that is, its qualifying individualhas a minimum of three (3) years expe-rience in ocean freight forwarding du-ties in the United States, and the nec-essary character to render forwardingservices; and

(2) It has obtained and filed with theCommission a valid surety bond in con-formance with § 510.14.

(b) Qualifying individual. The follow-ing individuals must qualify the appli-cant for a license:

(1) Sole proprietorship—The applicantsole proprietor.

(2) Partnership—At least one of theactive managing partners, but all part-ners must execute the application.

(3) Corporation—At least one of theactive corporate officers.

(c) Affiliates of forwarders. An inde-pendently qualified applicant may begranted a separate license to carry onthe business of forwarding even thoughit is associated with, under commoncontrol with, or otherwise related toanother ocean freight forwarderthrough stock ownership or common


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46 CFR Ch. IV (10–1–96 Edition)§ 510.12

directors or officers, if such applicantsubmits: (1) A separate application andfee, and (2) a valid surety bond in theform and amount prescribed under§ 510.14. The proprietor, partner or offi-cer who is the qualifying individual ofone active licensee shall not also bedesignated the qualifying proprietor,partner or officer of an applicant foranother ocean freight forwarder li-cense.

(d) Common carrier. A common carrieror agent thereof which meets the re-quirements of this part may be licensedto dispatch shipments moving on otherthan such carrier’s own bill of ladingsubject to the provisions of § 510.23(g).

[49 FR 36297, Sept. 14, 1984; 49 FR 38544, Oct.1, 1984]

§ 510.12 Application for license.(a) Application and forms. (1) Any per-

son who wishes to obtain a license tocarry on the business of forwardingshall submit, in duplicate, to the Direc-tor of the Commission’s Bureau of Tar-iffs, a completed application FormFMC–18 Rev. (Application for a Licenseas an Ocean Freight Forwarder) and acompleted anti-rebate certification inthe format prescribed under § 510.25.Copies of Form FMC–18 Rev. may beobtained from the Director, Bureau ofTariffs, Federal Maritime Commission,Washington, DC 20573, or from any ofthe Commission’s offices at other loca-tions. Notice of filing of such applica-tion shall be published in the FEDERALREGISTER and shall state the name andaddress of the applicant. If the appli-cant is a corporation or partnership,the names of the officers or partnersthereof shall be published.

(2) An individual who is applying fora license in his or her own name mustcomplete the following certification.

I. lll (Name) lll, certify under pen-alty of perjury under the laws of the UnitedStates, that I have not been convicted, afterSeptember 1, 1989, of any Federal or State of-fense involving the distribution or possessionof a controlled substance, or that if I havebeen so convicted, I am not ineligible to re-ceive Federal benefits, either by court orderor operation of law, pursuant to 21 U.S.C.853a.

(b) Fee. The application shall be ac-companied by a money order, certifiedcheck or cashier’s check in the amount

of $687 made payable to the FederalMaritime Commission.

(c) Rejection. Any application whichappears upon its face to be incompleteor to indicate that the applicant failsto meet the licensing requirements ofthe Shipping Act of 1984, or the Com-mission’s regulations, shall be returnedby certified U.S. mail to the applicantwithout further processing, togetherwith an explanation of the reason(s) forrejection, and the application fee shallbe refunded in full. All other applica-tions will be assigned an applicationnumber, and each applicant will be no-tified of the number assigned to its ap-plication. Persons who have had theirapplications returned may reapply fora license at any time thereafter by sub-mitting a new application, togetherwith the full application fee.

(d) Investigation. Each applicant shallbe investigated in accordance with§ 510.13.

(e) Changes in fact. Each applicantand each licensee shall submit to theCommission, in duplicate, an amendedForm FMC–18 Rev. advising of anychanges in the facts submitted in theoriginal application, within thirty (30)days after such change(s) occur. In thecase of an application for a license, anyunreported change may delay the proc-essing and investigation of the applica-tion and may result in rejection or de-nial of the application. No fee is re-quired when reporting changes to anapplication for initial license underthis section.

[49 FR 36297, Sept. 14, 1984, as amended at 55FR 42194, Oct. 18, 1990; 59 FR 59171, Nov. 16,1994]

§ 510.13 Investigation of applicants.

The Commission shall conduct an in-vestigation of the applicant’s qualifica-tions for a license. Such investigationsmay address:

(a) The accuracy of the informationsubmitted in the application;

(b) The integrity and financial re-sponsibility of the applicant;

(c) The character of the applicantand its qualifying individual; and

(d) The length and nature of thequalifying individual’s experience inhandling freight forwarding duties.


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§ 510.14 Surety bond requirements.(a) Form and amount. No license shall

be issued to an applicant who does nothave a valid surety bond (FMC–59 Rev.)on file with the Commission in theamount of $30,000. The amount of suchbond shall be increased by $10,000 foreach of the applicant’s unincorporatedbranch offices. Bonds must be issued bya surety company found acceptable bythe Secretary of the Treasury. SuretyBond Form FMC–59 Rev. can be ob-tained in the same manner as FormFMC–18 Rev. under § 510.12(a).

(b) Filing of bond. Upon notificationby the Commission by certified U.S.mail that the applicant has been ap-proved for licensing, the applicantshall file with the Director of the Com-mission’s Bureau of Tariffs, a suretybond in the form and amount pre-scribed in § 510.14(a). No license will beissued until the Commission is in re-ceipt of a valid surety bond from theapplicant. If more than six (6) monthselapse between issuance of the notifica-tion of qualification and receipt of thesurety bond, the Commission shall, atits discretion, undertake a supple-mentary investigation to determinethe applicant’s continued qualification.The fee for such supplementary inves-tigation shall be $213 payable by moneyorder, certified check or cashier’scheck to the Federal Maritime Commis-sion. Should the applicant not file therequisite surety bond within two yearsof notification, the Commission willconsider the application to be invalid.

(c) Branch offices. A new surety bond,or rider to the existing bond, increas-ing the amount of the bond in accord-ance with § 510.14(a), shall be filed withthe Commission prior to the date thelicensee commences operation of anybranch office. Failure to adhere to thisrequirement may result in revocationof the license.

(d) Termination of bond. No licenseshall remain in effect unless a validsurety bond is maintained on file withthe Commission. Upon receipt of noticeof termination of a surety bond, theCommission shall notify the concernedlicensee by certified U.S. mail, at itslast known address, that the Commis-sion shall, without hearing or otherproceeding, revoke the license as of thetermination date of the bond, unless

the licensee shall have submitted avalid replacement surety bond beforesuch termination date. Replacementsurety bonds must bear an effectivedate no later than the terminationdate of the expiring bond.

[49 FR 36297, Sept. 14, 1984, as amended at 59FR 59171, Nov. 16, 1994]

§ 510.15 Denial of license.

If the Commission determines, as aresult of its investigation, that the ap-plicant:

(a) Does not possess the necessary ex-perience or character to render for-warding services;

(b) Has failed to respond to any law-ful inquiry of the Commission; or

(c) Has made any willfully false ormisleading statement to the Commis-sion in connection with its application,

A letter of intent to deny the applica-tion shall be sent to the applicant bycertified U.S. mail, stating the rea-son(s) why the Commission intends todeny the application. If the applicantsubmits a written request for hearingon the proposed denial within twenty(20) days after receipt of notification,such hearing shall be granted by theCommission pursuant to its Rules ofPractice and Procedure contained inpart 502 of this chapter. Otherwise, de-nial of the application will become ef-fective and the applicant shall be sonotified by certified U.S. mail. Civilpenalties for violations of the Act orany Commission order, rule or regula-tion may be assessed in accordancewith subpart W of part 502 of this chap-ter in any proceeding on the proposeddenial of a license or may be com-promised for any such violation when aproceeding has not been instituted.

[49 FR 36297, Sept. 14, 1984, as amended at 58FR 27213, May 7, 1993]

§ 510.16 Revocation or suspension oflicense.

(a) Grounds for revocation. Except forthe automatic revocation for termi-nation of a surety bond under§ 510.14(d), or as provided in § 510.14(c), alicense may be revoked or suspendedafter notice and hearing for any of thefollowing reasons:


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46 CFR Ch. IV (10–1–96 Edition)§ 510.17

(1) Violation of any provision of theAct, or any other statute or Commis-sion order or regulation related to car-rying on the business of forwarding;

(2) Failure to respond to any lawfulorder or inquiry by the Commission;

(3) Making a willfully false or mis-leading statement to the Commissionin connection with an application for alicense or its continuance in effect;

(4) Where the Commission determinesthat the licensee is not qualified torender freight forwarding services;

(5) Failure to honor the licensee’s fi-nancial obligations to the Commission,such as for civil penalties assessed oragreed to in a settlement agreementunder subpart W of part 502 of thischapter; or

(6) Failure to file an anti-rebate cer-tification as required by § 510.25 andpart 582 of this chapter. Any licensedfreight forwarder who fails to file ananti-rebate certification will be noti-fied by FEDERAL REGISTER publicationand by certified mail that if withinforty-five (45) days from the date thecertified notice is mailed the licenseedoes not either establish that the re-quired anti-rebate certification wasfiled in accordance with § 510.25 andpart 582 of this chapter or file the re-quired anti-rebate certification, its li-cense will be suspended until such timeas it is reinstated by the Commissionafter an anti-rebate certification isfiled. The license of any freight for-warder who files an anti-rebate certifi-cation after December 31 but before theend of the forty-five (45) days notice pe-riod will not be suspended; however,the licensee will be subject to civil pen-alties as provided in part 582 of thischapter. After the forty-five (45) days,any licensee that still does not have ananti-rebate certification on file withthe Commission will be notified byFEDERAL REGISTER publication and cer-tified mail, return receipt requested,that its license has been suspended.

(b) Civil penalties. As provided for insubpart W of part 502 of this chapter,civil penalties for violations of the Actor any Commission order, rule, or regu-lation may be assessed in any proceed-ing to revoke or suspend a license andmay be compromised when such a pro-ceeding has not been instituted.

(c) Notice of revocation. The Commis-sion shall publish in the FEDERAL REG-ISTER a notice of each revocation.

[49 FR 36297, Sept. 14, 1984, as amended at 55FR 35318, Aug. 29, 1990; 57 FR 39623, Sept. 1,1992; 58 FR 27213, May 7, 1993]

§ 510.17 Application after revocationor denial.

Whenever a license has been revokedor an application has been denied be-cause the Commission has found the li-censee or applicant to be not qualifiedto render forwarding services, any fur-ther application within 3 years of thedate of the most recent conduct onwhich the Commission’s notice of rev-ocation or denial was based, made bysuch former licensee or applicant or byanother applicant employing the samequalifying individual or controlled bypersons on whose conduct the Commis-sion based its determination for rev-ocation or denial, shall be reviewed di-rectly by the Commission.

§ 510.18 Issuance and use of license.

(a) Qualification necessary for issuance.The Commission will issue a license ifit determines, as a result of its inves-tigation, that the applicant possessesthe necessary experience and characterto render forwarding services and hasfiled the required surety bond.

(b) To whom issued. The Commissionwill issue a license only in the name ofthe applicant, whether the applicant bea sole proprietorship, a partnership, ora corporation, and the license will beissued to only one legal entity. A li-cense issued to a sole proprietor doingbusiness under a trade name shall be inthe name of the sole proprietor, indi-cating the trade name under which thelicensee will be conducting business.Only one license shall be issued to anyapplicant regardless of the number ofnames under which such applicant maybe doing business.

(c) Use limited to named licensee. Ex-cept as otherwise provided in this part,such license is limited exclusively touse by the named licensee and shall notbe transferred without approval to an-other person.


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§ 510.19 Changes in organization.(a) The following changes in an exist-

ing licensee’s organization requireprior approval of the Commission:

(1) Transfer of a corporate license toanother person;

(2) Change in ownership of an individ-ual proprietorship;

(3) Addition of one or more partnersto a licensed partnership;

(4) Change in the business structureof a licensee from or to a sole propri-etorship, partnership, or corporation,whether or not such change involves achange in ownership;

(5) Any change in a licensee’s name;or

(6) Change in the identity or status ofthe designated qualifying individual,except as discussed in paragraphs (b)and (c) of this section.

(b) Operation after death of sole propri-etor. In the event the owner of a li-censed sole proprietorship dies, the li-censee’s executor, administrator,heir(s), or assign(s) may continue oper-ation of such proprietorship solely withrespect to shipments for which the de-ceased sole proprietor had undertakento act as an ocean freight forwarderpursuant to the existing license, if thedeath is reported within thirty (30)days to the Commission and to all prin-cipals for whom services on such ship-ments are to be rendered. The accept-ance or solicitation of any other ship-ments is expressly prohibited until anew license has been issued. Applica-tions for a new license by the said ex-ecutor, administrator, heir(s), or as-sign(s) shall be made on Form FMC–18Rev., and shall be accompanied by thetransfer fee set forth in paragraph (e)of this section.

(c) Operation after retirement, resigna-tion, or death of qualifying individual.When a partnership or corporation hasbeen licensed on the basis of the quali-fications of one or more of the partnersor officers thereof, and such qualifyingindividual(s) shall no longer serve in afull-time, active capacity with thefirm, the licensee shall report suchchange to the Commission within thir-ty (30) days. Within the same 30-day pe-riod, the licensee shall furnish to theCommission the name(s) and detailedocean freight forwarding experience ofother active managing partner(s) or of-

ficer(s) who may qualify the licensee.Such qualifying individual(s) mustmeet the applicable requirements setforth in § 510.11(a) of this part. The li-censee may continue to operate as anocean freight forwarder while the Com-mission investigates the qualificationsof the newly designated partner or offi-cer.

(d) Incorporation of branch office. Inthe event a licensee’s validly operatingbranch office undergoes incorporationas a separate entity, the licensee maycontinue to operate such office pendingreceipt of a separate license, providedthat:

(1) The separately incorporated en-tity applies to the Commission for itsown license within ten (10) days afterincorporation, and

(2) The continued operation of the of-fice is carried on as a bona fide branchoffice of the licensee, under its fullcontrol and responsibility, and not asan operation of the separately incor-porated entity.

(e) Application form and fee. Applica-tions for Commission approval of sta-tus changes or for license transfersunder paragraph (a) of this sectionshall be filed in duplicate with the Di-rector, Bureau of Tariffs, Certificationand Licensing, Federal Maritime Com-mission, on form FMC–18 Rev., to-gether with a processing fee of $365,made payable by money order, certifiedcheck or cashier’s check to the FederalMaritime Commission. Should a personalcheck not be honored when presented forpayment, the processing of the applicationshall be suspended until the processing feeis paid.

(f) Acquisition of one or more additionallicensees. In the event a licensee ac-quires one or more additional licens-ees, for the purpose of merger, consoli-dation, or control, the acquiring li-censee shall advise the Commission ofsuch change within thirty days aftersuch change occurs by submitting induplicate, an amended Form FMC–18,Rev. No application fee is requiredwhen reporting this change.

[49 FR 36297, Sept. 14, 1984, as amended at 57FR 40129, Sept. 2, 1992; 59 FR 59171, Nov. 16,1994]


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46 CFR Ch. IV (10–1–96 Edition)§ 510.21

Subpart C—Duties and Respon-sibilities of Freight Forwarders;Forwarding Charges; Reportsto Commission

§ 510.21 General duties.(a) License; name and number. Each li-

censee shall carry on the business offorwarding only under the name inwhich its license is issued and onlyunder its license number as assigned bythe Commission. Wherever the licens-ee’s name appears on shipping docu-ments, its FMC license number shallalso be included.

(b) Stationery and billing forms; noticeof shipper affiliation. (1) The name andlicense number of each licensee shallbe permanently imprinted on the li-censee’s office stationery and billingforms. The Commission may tempo-rarily waive this requirement for goodcause shown if the licensee rubberstamps or types its name and FMC li-cense number on all papers and in-voices concerned with any forwardingtransaction.

(2) When a licensee is a shipper orseller of goods in international com-merce or affiliated with such an entity,the licensee shall have the option of: (i)Identifying itself as such and/or, whereapplicable, listing its affiliates on itsoffice stationery and billing forms, or(ii) including the following notice onsuch items:

This company is a shipper or seller of goodsin international commerce or is affiliatedwith such an entity. Upon request, a generalstatement of its business activities and thoseof its affiliates, along with a written list ofthe names of such affiliates, will be provided.

(c) Use of license by others; prohibition.No licensee shall permit its license orname to be used by any person who isnot a bona fide individual employee ofthe licensee. Unincorporated branch of-fices of the licensee may use the li-cense number and name of the licenseeif such branch offices: (1) Have been re-ported to the Commission in writing;and (2) are covered by an increasedbond in accordance with § 510.14(c).

(d) Arrangements with forwarderswhose licenses have been revoked. Unlessprior written approval from the Com-mission has been obtained, no licenseeshall, directly or indirectly:

(1) Agree to perform forwarding serv-ices on export shipments as an associ-ate, correspondent, officer, employee,agent, or sub-agent of any personwhose license has been revoked or sus-pended pursuant to § 510.16;

(2) Assist in the furtherance of anyforwarding business of such person;

(3) Share forwarding fees or freightcompensation with any such person; or

(4) Permit any such person, directlyor indirectly, to participate, throughownership or otherwise, in the controlor direction of the freight forwardingbusiness of the licensee.

(e) Arrangements with unauthorizedpersons. No licensee shall enter into anagreement or other arrangement (ex-cluding sales agency arrangements notprohibited by law or this part) with anunlicensed person so that any resultingfee, compensation, or other benefit in-ures to the benefit of the unlicensedperson. When a licensee is employed forthe transaction of forwarding businessby a person who is not the person re-sponsible for paying the forwardingcharges, the licensee shall also trans-mit to the person paying the forward-ing charges a copy of its invoice forservices rendered.

(f) False or fraudulent claims, false in-formation. No licensee shall prepare orfile or assist in the preparation or fil-ing of any claim, affidavit, letter of in-demnity, or other paper or documentconcerning a forwarding transactionwhich it has reason to believe is falseor fraudulent, nor shall any such li-censee knowingly impart to a prin-cipal, common carrier or other person,false information relative to any for-warding transaction.

(g) Response to requests of Commission.Upon the request of any authorizedrepresentative of the Commission, a li-censee shall make available promptlyfor inspection or reproduction allrecords and books of account in con-nection with its forwarding business,and shall respond promptly to any law-ful inquiries by such representative.

(h) Policy against rebates. The follow-ing declaration shall appear on all in-voices submitted to principals:

(Name of firm) has a policy against payment,solicitation, or receipt of any rebate, di-rectly or indirectly, which would be unlawfulunder the United States Shipping Act of 1984.


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§ 510.22 Forwarder and principal; fees.

(a) Compensation or fee sharing. No li-censee shall share, directly or indi-rectly, any compensation or freightforwarding fee with a shipper, con-signee, seller, or purchaser, or anagent, affiliate, or employee thereof;nor with any person advancing the pur-chase price of the property or guaran-teeing payment therefor; nor with anyperson having a beneficial interest inthe shipment.

(b) Withholding information. No li-censee shall withhold any informationconcerning a forwarding transactionfrom its principal.

(c) Due diligence. Each licensee shallexercise due diligence to ascertain theaccuracy of any information it impartsto a principal concerning any forward-ing transaction.

(d) Errors and omissions. Each licenseeshall comply with the laws of the Unit-ed States and any involved State, Ter-ritory, or possession thereof, and shallassure that to the best of its knowledgethere exists no error, misrepresenta-tion in, or omission from any exportdeclaration, bill of lading, affidavit, orother document which the licensee exe-cutes in connection with a shipment. Alicensee who has reason to believe thatits principal has not, with respect to ashipment to be handled by such li-censee, complied with the laws of theUnited States or any State, Common-wealth or Territory thereof, or hasmade any error or misrepresentationin, or omission from, any export dec-laration, bill of lading, affidavit, orother paper which the principal exe-cutes in connection with such ship-ment, shall advise its principalpromptly of the suspected noncompli-ance, error, misrepresentation or omis-sion, and shall decline to participate inany transaction involving such docu-ment until the matter is properly andlawfully resolved.

(e) Express written authority. No li-censee shall endorse or negotiate anydraft, check, or warrant drawn to theorder of its principal without the ex-press written authority of such prin-cipal.

(f) Receipt for cargo. Each receipt is-sued for cargo by a licensee shall beclearly identified as Receipt for Cargo

and be readily distinguishable from abill of lading.

(g) Invoices; documents available uponrequest. A licensee may charge its prin-cipal for services rendered. Upon re-quest of its principal, each licenseeshall provide a complete breakout ofthe components of its charges and atrue copy of any underlying documentor bill of charges pertaining to the li-censee’s invoice. The following noticeshall appear on each invoice to a prin-cipal:

Upon request, we shall provide a detailedbreakout of the components of all chargesassessed and a true copy of each pertinentdocument relating to these charges.

(h) Special contracts. To the extentthat special arrangements or contractsare entered into by a licensee, the li-censee shall not deny equal terms toother shippers similarly situated.

(i) Reduced forwarding fees. No li-censee shall render, or offer to render,any freight forwarding service free ofcharge or at a reduced fee in consider-ation of receiving compensation from acommon carrier or for any other rea-son. Exception: A licensee may performfreight forwarding services for recog-nized relief agencies or charitable orga-nizations, which are designated as suchin the tariff of the common carrier,free of charge or at reduced fees.

(j) Accounting to principal. Each li-censee shall account to its principal(s)for overpayments, adjustments ofcharges, reductions in rates, insurancerefunds, insurance monies received forclaims, proceeds of c.o.d. shipments,drafts, letters of credit, and any othersums due such principal(s).

§ 510.23 Forwarder and carrier; com-pensation.

(a) Disclosure of principal. The iden-tity of the shipper must always be dis-closed in the shipper identification boxon the bill of lading. The licensee’sname many appear with the name ofthe shipper, but the licensee must beidentified as the shipper’s agent.

(b) Certification required for compensa-tion. A common carrier may pay com-pensation to a licensee only pursuantto such common carrier’s tariff provi-sions. Where a common carrier’s tariffprovides for the payment of compensa-tion, such compensation shall be paid


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46 CFR Ch. IV (10–1–96 Edition)§ 510.24

on any shipment forwarded on behalf ofothers where the licensee has provideda written certification as prescribed inparagraph (c) of this section and theshipper has been disclosed on the bill oflading as provided for in paragraph (a)of this section. The common carriershall be entitled to rely on such certifi-cation unless it knows that the certifi-cation is incorrect. The common car-rier shall retain such certification for aperiod of five (5) years.

(c) Form of certification. Where a li-censee is entitled to compensation, thelicensee shall provide the common car-rier with a signed certification whichindicates that the licensee has per-formed the required services that enti-tle it to compensation. The certifi-cation shall read as follows:

The undersigned hereby certifies that nei-ther it nor any holding company, subsidiary,affiliate, officer, director, agent or executiveof the undersigned has a beneficial interestin this shipment; that it is the holder ofvalid FMC License No. ———, issued by theFederal Maritime Commission and has per-formed the following services:

(1) Engaged, booked, secured, reserved, orcontracted directly with the carrier or itsagent for space aboard a vessel or confirmedthe availability of that space; and

(2) Prepared and processed the ocean bill oflading, dock receipt, or other similar docu-ment with respect to the shipment.

The required certification may beplaced on one copy of the relevant billof lading, a summary statement fromthe licensee, the licensee’s compensa-tion invoice, or as an endorsement onthe carrier’s compensation check. Eachlicensee shall retain evidence in itsshipment files that the licensee, infact, has performed the required serv-ices enumerated on the certification.

(d) Compensation pursuant to tariffprovisions. No licensee, or employeethereof, shall accept compensationfrom a common carrier which is dif-ferent than that specifically providedfor in the carrier’s effective tariff(s)lawfully on file with the Commission.No conference or group of common car-riers shall deny in the export com-merce of the United States compensa-tion to an ocean freight forwarder orlimit that compensation to less than areasonable amount.

(e) Compensation; services performed byunderlying carrier; exemptions. No li-

censee shall charge or collect com-pensation in the event the underlyingcommon carrier, or its agent, has, atthe request of such licensee, performedany of the forwarding services set forthin § 510.2(h) unless such carrier or agentis also a licensee, or unless no other li-censee is willing and able to performsuch services.

(f) Duplicative compensation. A com-mon carrier shall not pay compensa-tion for the services described in§ 510.23(c) more than once on the sameshipment.

(g) Licensed non-vessel-operating com-mon carriers; compensation. (1) A non-vessel-operating common carrier orperson related thereto licensed underthis part may collect compensationwhen, and only when, the followingcertification is made together with thecertification required under paragraph(c) of this section:

The undersigned certifies that neither it norany related person has issued a bill of ladingor otherwise undertaken common carrier re-sponsibility as a non-vessel-operating com-mon carrier for the ocean transportation ofthe shipment covered by this bill of lading.

(2) Whenever a person acts in the ca-pacity of a non-vessel-operating com-mon carrier as to any shipment, suchperson shall not collect compensation,nor shall any underlying ocean com-mon carrier pay compensation to suchperson for such shipment.

(h) A freight forwarder may not re-ceive compensation from a commoncarrier with respect to any shipment inwhich the forwarder has a beneficial in-terest or with respect to any shipmentin which any holding company, subsidi-ary, affiliate, officer, director, agent,or executive of such forwarder has abeneficial interest.

[49 FR 36297, Sept. 14, 1984; 49 FR 38544, Oct.1, 1984; 57 FR 40131, Sept. 2, 1992]

§ 510.24 Records required to be kept.

Each licensee shall maintain in anorderly and systematic manner, andkeep current and correct, all recordsand books of account in connectionwith its business of forwarding. Theserecords must be kept in the United


145


States in such manner as to enable au-thorized Commission personnel to read-ily determine the licensee’s cash posi-tion, accounts receivable and accountspayable. The licensee must maintainthe following records for a period offive years:

(a) General financial data. A currentrunning account of all receipts and dis-bursements, accounts receivable andpayable, and daily cash balances, sup-ported by appropriate books of ac-count, bank deposit slips, cancelledchecks, and monthly reconciliation ofbank statements.

(b) Types of services by shipment. Aseparate file shall be maintained foreach shipment. Each file shall includea copy of each document prepared,processed, or obtained by the licensee,including each invoice for any servicearranged by the licensee and performedby others, with respect to such ship-ment.

(c) Receipts and disbursements by ship-ment. A record of all sums received and/or disbursed by the licensee for servicesrendered and out-of-pocket expensesadvanced in connection with each ship-ment, including specific dates andamounts.

(d) Special contracts. A true copy, or iforal, a true and complete memoran-dum, of every special arrangement orcontract with a principal, or modifica-tion or cancellation thereof, to whichit may be a party. Authorized Commis-sion personnel and bona fide shippersshall have access to such records uponreasonable request.

§ 510.25 Anti-rebate certifications.(a) Every licensed ocean freight for-

warder shall file an anti-rebating cer-tificate on or before December 31, 1992,and thereafter, on or before December31 of each succeeding even-numberedcalendar year.

(b) Every applicant for an oceanfreight forwarder license shall file ananti-rebating certificate with its li-cense application. Any application foran ocean freight forwarder license thatdoes not include an anti-rebate certifi-cation in accordance with § 510.12 andpart 582 of this chapter shall be re-jected. Certificates filed with licenseapplications shall be valid from thegranting of an ocean freight forwarder

license through the first succeedingDecember 31 of an even-numbered cal-endar year.

(c) The anti-rebating certificate shallcomply with the requirements of part582 of this chapter.

[57 FR 39623, Sept. 1, 1992]


This section displays the controlnumbers assigned to information col-lection requirements of the Commis-sion in this part by the Office of Man-agement and Budget pursuant to thePaperwork Reduction Act of 1980, Pub.L. 96–511. The Commission intends thatthis part comply with the requirementsof section 3507(f) of the Paperwork Re-duction Act, which requires that agen-cies display a current control numberassigned by the Director of the Officeof Management and Budget (OMB) foreach agency information collection re-quirement:


510.12 (Form FMC–18) ................................. 3072–0018510.14 ............................................................ 3072–0018510.15 ............................................................ 3072–0018510.19 (Form FMC–18) ................................. 3072–0018510.21 through 510.25 .................................. 3072–0018

PART 514—TARIFFS AND SERVICECONTRACTS

Subpart A—General Provisions

Sec.514.1 Scope, purpose, requirements, pen-

alties and fees.514.2 Definitions.514.3 Exemptions and exclusions.514.4 Content, filing and cancellation of tar-

iff material; general.514.5—514.6 [Reserved]

Subpart B—Service Contracts

514.7 Service contracts in foreign com-merce.

Subpart C—Form, Content and Use of TariffData

514.8 Electronic filing.514.9 Filing/Amendment codes and required

notice periods.514.10 Other items used throughout ATFI.514.11 Organization and tariff records; tariff

scope.


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46 CFR Ch. IV (10–1–96 Edition)§ 514.1

514.12 Governing and general reference tar-iffs.

514.13 Commodities and tariff line items(‘‘TLIs’’).

514.14 [Reserved]514.15 Tariff Rules.514.16 [Reserved]514.17 Essential terms of service contracts

in foreign commerce.514.18 Special permission.514.19 Suspension of tariff matter.514.20 Retrieval.514.21 User charges.514.91 OMB control numbers assigned pursu-

ant to the Paperwork Reduction Act.EXHIBIT 1 TO PART 514—ATFI USER REGISTRA-

TION FORM

AUTHORITY: 5 U.S.C. 552 and 553; 31 U.S.C.9701; 46 U.S.C. app. 804, 812, 814–817(a), 820,833a, 841a, 843, 844, 845, 845a, 845b, 847, 1702–1712, 1714–1716, 1718, 1721 and 1722; and sec.2(b) of Pub. L. 101–92, 103 Stat. 601.

SOURCE: 57 FR 36271, Aug. 12, 1992, unlessotherwise noted.

Subpart A—General Provisions§ 514.1 Scope, purpose, requirements,

penalties and fees.(a) Scope. The regulations of this part

govern:(1) The publication and filing of tar-

iffs, as well as service contracts andtheir essential terms, covering thetransportation of property performedby common carriers in the foreign com-merce of the United States and by com-binations of such common carriers, in-cluding through transportation offeredin conjunction with one or more car-riers not otherwise subject to the Ship-ping Act of 1984 (46 U.S.C. app. 1702, etseq.).

(2) The publication, filing, and post-ing of tariffs for the transportation ofproperty or passengers performed bycommon carriers by water in interstatecommerce which are subject to theShipping Act, 1916, as amended (46U.S.C. app. 801, et seq.), includingthrough transportation offered in con-junction with one or more commoncarriers not subject to said ShippingAct.

(3) The filing of terminal tariffs bypersons engaged in carrying on thebusiness of furnishing wharfage, dock,warehouse or other terminal facilitieswithin the United States or a common-wealth, territory, or possession there-of, in connection with a common car-

rier by water in the foreign or domesticoffshore commerce of the UnitedStates.

(4) The filing of tariffs by terminalbarge operators in Pacific Slope Statesin the foreign and domestic commerceof the United States. See § 514.3(a)(7).

(5) The formatting of tariff materialsfor electronic filing, processing and re-trieval.

(b) Purpose. The tariff format andcontent requirements of this part re-flect the Commission’s responsibilitiesin identifying and preventing unrea-sonable preference or prejudice and un-just discrimination pursuant to section10 of the Shipping Act of 1984. The pur-poses of this part are also to enable theCommission to:

(1) Discharge its responsibilitiesunder section 17 of the Shipping Act,1916 and section 10 of the Shipping Actof 1984, by keeping informed of prac-tices, rates and charges related there-to, instituted and to be instituted bymarine terminals, and by keeping thepublic informed of such practices.

(2) Determine, through the use of in-formation obtained under this part, thepropriety of the level of rates, fares,charges, and practices demanded,charged, collected or observed by car-riers in the domestic offshore com-merce of the United States under theShipping Act, 1916, as amended by theIntercoastal Shipping Act, 1933 (46U.S.C. app. 843, et seq.).

(3) Facilitate, by electronic means,the filing, processing and retrieval oftariff materials to better promote thewaterborne commerce of the UnitedStates.

(c) Basic requirements. Unless exempt-ed or excluded under § 514.3, and as aug-mented by § 514.8(k)(1), the followingare the basic requirements under thispart:

(1) Foreign commerce of the UnitedStates. (i) Section 8 of the Shipping Actof 1984 requires common carriers andconferences of such common carriers tofile with the Commission and keepopen to public inspection, tariffs show-ing all rates, charges, classifications,Tariff Rules and practices for transpor-tation between U.S. and foreign portsand between points on any throughroute which is established. These regu-lations implement this requirement


147


and, in addition, the requirements ofsections 9, 10 and 16 of the ShippingAct of 1984.

(ii) Service contracts and their essen-tial terms are also required to be filedby the 1984 Act and shall apply only totransportation of cargo moving from,to or through a United States port inthe foreign commerce of the UnitedStates.

(iii) Anti-rebate certification. (A) Ananti-rebating certification shall befiled in paper format, as prescribed bypart 582 of this chapter, by every com-mon carrier in foreign commerce as aprerequisite to obtaining password au-thority to file its initial tariff underthis part, and thereafter, on each suc-ceeding December 31 of an even-num-bered calendar year. Except for the ini-tial certification, the certification filedon each succeeding December 31 of aneven-numbered calendar year shall bevalid for the two calendar years follow-ing the December 31 filing date.

(B) Failure of a common carrier tofile an anti-rebate certification beforefiling initial tariffs, as required by thispart and part 582 of this chapter, shallresult in withholding or suspension ofany filing authorization and rejectionof that carrier’s proposed tariff(s).

(C) Any common carrier who fails tofile an anti-rebate certification as re-quired by part 582 of this chapter willbe notified by FEDERAL REGISTER publi-cation and by certified mail that if,within forty-five (45) days from thedate the certified notice is mailed, thecommon carrier does not either estab-lish that the required anti-rebate cer-tification was filed in accordance withthis part and part 582 of this chapter,or file the required anti-rebate certifi-cation, its tariff(s) will be cancelledand attempted filings rejected.

(D) In the event common carrierrates are published in one or more con-ference tariffs, the name of every com-mon carrier who did not file an anti-re-bate certification will be stricken fromthe list of carriers participating inthose conference tariffs.

(E) The tariff(s) of any common car-rier who files an anti-rebate certifi-cation after December 31 but before theend of the forty-five (45) days’ noticeperiod will not be canceled; however,the common carrier will be subject to

civil penalties as provided in parts 502and 582 of this chapter. The tariff(s) ofany common carrier who files an anti-rebate certification after December 31but before the end of the forty-five (45)days’ notice period will not be can-celed; however, the common carrierwill be subject to civil penalties as pro-vided in parts 505 and 582 of this chap-ter. After the forty-five (45) days, anycommon carrier that does not have ananti-rebate certification on file withthe Commission will be notified byFEDERAL REGISTER publication and cer-tified mail, return receipt requested,that its tariff(s) have been canceledand/or its name has been stricken fromconference tariff(s).

(2) Domestic offshore commerce of theUnited States under the Shipping Act,1916 and the Intercoastal Shipping Act,1933. (i) Every domestic offshore carriershall file with the Commission andkeep open to public inspection, tariffsshowing its actual rates, fares andcharges for or in connection withtransportation between all points onits own route, and all points on anythrough route established in conjunc-tion with other carriers. Such tariffsshall plainly show the places betweenwhich freight or passengers will be car-ried and shall contain any classifica-tion of freight and passenger accom-modations affecting or determining therates applicable to such transportationand shall state separately each termi-nal or other charge, privilege, or facil-ity granted or allowed to shippers orpassengers and any Tariff Rules or reg-ulations which in anywise change, af-fect, or determine any part of the totalrates, fares or charges assessed or thevalue of service rendered to consignors,consignees or passengers.

(ii) Only tariffs of persons engaged incommon carriage by water may befiled. Common carriers subject to theShipping Act, 1916, are those vessel op-erating and non-vessel-operating car-riers providing transportation by waterbetween:

(A) Any of the 48 contiguous states orthe District of Columbia and Alaska orHawaii;

(B) Any state or the District of Co-lumbia and any territory, common-wealth, possession or district (exclud-ing the District of Columbia);


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46 CFR Ch. IV (10–1–96 Edition)§ 514.1

(C) Alaska and Hawaii;(D) Any territory, commonwealth,

possession or district (excluding theDistrict of Columbia) and any othersuch territory, commonwealth, posses-sion, or district; and

(E) Places in the same district, terri-tory, commonwealth or possession (ex-cluding the District of Columbia), andwhich are not solely engaged in trans-portation subject to the jurisdiction ofthe Interstate Commerce Commissionunder 49 U.S.C. Chapter 105.

(3) Both foreign and domestic offshorecommerce—(i) Terminal operators. (A)Every person carrying on the businessof furnishing wharfage, dock, ware-house, or other terminal facilities asdescribed in paragraph (a)(3) of thissection, including, but not limited toterminals owned or operated by Statesand their political subdivisions; rail-roads who perform port terminal serv-ices not covered by their line haulrates; common carriers who performport terminal services; and warehouse-men who operate port terminal facili-ties, shall file, and shall keep open forinspection at all their places of busi-ness, a schedule or tariff showing alltheir rates, charges, Tariff Rules, andregulations relating to or connectedwith the receiving, handling, storing,and/or delivering of property at theirterminal facilities,

(B) Every tariff or tariff change shallbe filed on or before its effective date,except as required by CommissionOrder or by agreements approved pur-suant to section 15 of the Shipping Act,1916 and/or effective under section 6 ofthe Shipping Act of 1984, and be keptopen for public inspection as providedin paragraph (c)(3)(i)(A) of this section.

(C) Persons who file tariffs pursuantto requirements of Commission Ordersor agreements, approved under section15 of the Shipping Act, 1916 and/or ef-fective under section 6 of the ShippingAct of 1984, are not relieved of such re-quirements by this part.

(ii) [Reserved](4) Electronic filing. All tariffs filed

under this part shall be properlyformatted as provided in this part andin the ATFI ‘‘Batch Filing Guide,’’under § 514.8(c)(3).

(d) Rejection of tariff data. (1) Accept-ance of tariff matter does not establish

the legality of the rates and practicesdescribed therein. The mere filing of atariff does not excuse the tariff owneror publisher from the obligations of the1916, 1933 or 1984 Acts or this chapter,regardless of whether these obligationspreceded or followed the filing of thetariff in question.

(2) Any tariff matter submitted forfiling, including service contracts andtheir essential terms, which fails inany respect to conform with the appli-cable shipping statutes, with the provi-sions of this part, or with a Commis-sion Order, is subject to rejection orpartial rejection after filing. Cause forrejection includes failure of the filingdomestic offshore carrier to complywith the provisions of Rule 67 of theCommission’s Rules of Practice andProcedure (46 CFR 502.67) and/or part552 of this chapter.

(3) Notices of rejection, with reasonstherefor, will be made available to fil-ers through electronic mail and, if notaccessed by the filer within a certainperiod of time, will be sent by regularU.S. mail. For service contracts and/oressential terms, the Commission mayalso notify the filing party of the Com-mission’s intent to reject within 20days of filing. See § 514.7(g). (Note:There will be no notice of rejection forattempted filings which are not accept-ed into the system because they arenot syntactically correct for process-ing.)

(4) Upon rejection, rejected tariffmatter is void and its use is unlawful.

(5) After rejection, the filer is respon-sible for putting its tariff in order. See§ 514.9(b)(19)(iv).

(6) The ‘‘Status’’ function on manyATFI screens displays a pop-up windowthat shows the status of a filed tariffitem, including a code that identifieswhether it was accepted or rejected, adescription of the code, and commentsentered by an FMC Examiner regardinga rejected item.

(e) Penalties; suspension of tariff mate-rial. (1) Operating without an effectivetariff on file with the Commission orcharging rates not in conformance withsuch a tariff is unlawful.

(2) Foreign commerce. Pursuant tosection 13 of the Shipping Act of 1984,operating without an effective tariff on


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file or charging rates not in conform-ance with such a tariff is subject to acivil penalty of not more than $5,000 foreach violation unless the violation waswillfully and knowingly committed, inwhich case the amount of civil penaltymay not exceed $25,000 for each viola-tion. Each day of a continuing viola-tion constitutes a separate offense. Ad-ditionally, the Commission may sus-pend any or all tariffs of the commoncarrier, or that common carrier’s rightto use any or all tariffs of conferencesof which it is a member, for a periodnot to exceed 12 months. See § 514.19.

(3) Domestic offshore commerce. (i)The Commission may at any time di-rect the cancellation of tariff matterwhich does not conform to the 1916 Actor this part. See § 514.19.

(ii) Violations of the provisions ofthis part are subject to a civil penaltyof not more than $1,000 for each daysuch violation continues.

(f) Filing fee. Under the authority ofthe Independent Offices AppropriationAct, 31 U.S.C. 9701, the Commission as-sesses a filing fee for ATFI filings. See§ 514.21(i) for filing fees.

[57 FR 36271, Aug. 12, 1992, as amended at 57FR 39623, Sept. 1, 1992; 59 FR 63908, Dec. 12,1994; 60 FR 27229, May 23, 1995]

§ 514.2 Definitions.The following definitions (in alpha-

betical order) shall apply to the regula-tions of this part and to all tariffs andservice contracts filed pursuant tothem, unless otherwise indicated bythe context of this part.

Across-the-board increase (domestic off-shore commerce) means any change inrates, fares, or charges in domestic off-shore commerce which will: (1) Resultin an increase in not less than 50 per-cent of the total rate, fare or chargeitems in the tariffs per trade of anycarrier, and (2) directly result in an in-crease in gross revenues of said carrierfor the particular trade of less than 3percent. See § 514.9(b)(1).

Alternate port service means sub-stituted service whereby the vessel-op-erating common carrier for whom thetariff object is filed uses someone elseto perform the transportation betweenthe point at which the cargo was ten-dered by the shipper and the port atwhich the cargo is actually loaded on

the filing carrier’s vessel, or betweenthe port at which the cargo is dis-charged from the filing carrier’s vesseland the point at which the cargo is tobe tendered to the consignee.

Amendment means any change, alter-ation, correction or modification of anexisting tariff.

Assessorial (accessorial) means a par-ticular service or condition, other thanthe basic transportation, which is usu-ally described in a commodity descrip-tion, TLI, or Tariff Rule, and for whicha charge may be added to the basicocean freight rate. See § 514.10(d).

Assessorial charge means the amountdetermined for an assessorial service orcondition that is added to the basicocean freight rate. See § 514.10(d).

Assessorial charge calculation meansan algorithmic representation of theconditions and mathematical stepsnecessary to calculate an assessorialcharge.

Associative check means an automatedcomparative check of data filed withATFI to check for logical conformitywith Commission tariff filing rules andpreviously filed tariff matter. See§ 514.8(n)(1)(iii).

ATFI means the Commission’s Auto-mated Tariff Filing and InformationSystem, a computer-based system forcreating, filing, processing and retriev-ing ocean freight and terminal tariffsand the essential terms of service con-tracts.

Availability (period of) means theprocess of offering essential terms of aservice contract to all similarly situ-ated shippers who can accept them forthe purpose of entering their own serv-ice contract (for a period of 30 days ormore). See § 514.17(d)(3).

Batch filing means the process bywhich a tariff filer can transmit to theCommission tariff matter which hasbeen created on the filer’s own com-puter. (Also see ‘‘on-line batch filing,’’‘‘in-bulk batch filing’’ and ‘‘tape batchfiling’’). See § 514.8 (c), (d)(3), and (l).

Batch Filing Guide means an ATFIuser document, available upon requestfrom the Commission, which definesthe procedures and technical require-ments for batch filing. See § 514.8(d)(3).

BTCL means the Commission’s Bu-reau of Tariffs, Certification and Li-censing.


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46 CFR Ch. IV (10–1–96 Edition)§ 514.2

Bulk cargo means cargo that is loadedand carried in bulk without mark orcount, in a loose unpackaged form,having homogeneous characteristics.Bulk cargo loaded into intermodalequipment, except LASH or Seabeebarges, is subject to mark and countand is, therefore, subject to the tarifffiling requirements of this part.

Checking means the service of count-ing and checking cargo against appro-priate documents for the account ofthe cargo or the vessel, or other personrequesting same. See ‘‘terminal serv-ices.’’ See § 514.15(b)(23).

Chemical parcel tanker. See ‘‘commoncarrier.’’

Co-loading (foreign commerce) meansthe combining of cargo, in the importor export commerce of the UnitedStates, by two or more NVOCCs fortendering to an ocean carrier under thename of one or more of the NVOCCs.See § 514.15(b)(14).

Combination rate means a rate for ashipment moving under intermodaltransportation which is computed bythe addition of a TLI, and an inlandrate(s) applicable from/to inlandpoint(s) not covered by said TLI.

Commission means the Federal Mari-time Commission.

Commodity description means a com-prehensive description of a commoditylisted in a tariff, including a brief defi-nition of the commodity, any applica-ble assessorial, related assessorialcharges if any, and the commodityindex entries by which the commodityis referenced.

Commodity description number means a10-digit number used to identify a com-modity description. See § 514.13(a).

Commodity index means an index ofthe commodity descriptions containedin a tariff. See § 514.13(a).

Commodity rates means rates for ship-ping to or from specific locations acommodity or commodities specificallynamed or described in the tariff inwhich the rate or rates are published.See § 514.13(a).

Common carrier or carrier (foreign com-merce) means a person holding itselfout to the general public to providetransportation by water of cargo be-tween the United States and a foreigncountry for compensation that:

(1) Assumes responsibility for thetransportation from port or point of re-ceipt to the port or point of destina-tion; and

(2) Utilizes, for all or part of thattransportation, a vessel operating onthe high seas or the Great Lakes be-tween a port in the United States anda port in a foreign country, except thatthe term does not include a commoncarrier engaged in ocean transpor-tation by ferry boat, ocean tramp, orchemical parcel tanker.As used in this paragraph, ‘‘chemicalparcel-tanker’’ means a vessel whosecargo-carrying capability consists ofindividual cargo tanks for bulk chemi-cals that are a permanent part of thevessel, that have segregation capabil-ity with piping systems to permit si-multaneous carriage of several bulkchemical cargoes with minimum riskof cross-contamination, and that has avalid certificate of fitness under theInternational Maritime OrganizationCode for the Construction and Equip-ment of Ships Carrying DangerousChemicals in Bulk.

Conference means an association ofocean common carriers permitted, pur-suant to an approved or effective agree-ment, to engage in concerted activityand to utilize a common tariff. Theterm shall also include any associationof ocean common carriers which is per-mitted, pursuant to an effective agree-ment, to fix rates and to enter intoservice contracts, but the term doesnot include a joint service, consortium,pooling, sailing or transshipmentagreement. For the term ‘‘marine ter-minal conference (agreement),’’ see§ 514.3(a)(8) and §§ 560.307(b) and572.307(b) of this chapter.

Conformity checks means all types ofsystem checks to determine compli-ance with the criteria of syntax checks(data form and format), validity checks(reference tables’ entries), and associa-tive checks.

Consignee means the recipient ofcargo from a shipper; the person towhom a transported commodity is tobe delivered.

Container means a demountable andreusable freight-carrying unit designedto be transported by different modes oftransportation and having construc-tion, fittings, and fastenings able to


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withstand, without permanent distor-tion or additional exterior packagingor containment, the normal stressesthat apply on continuous all-water andintermodal transportation. The termincludes dry cargo, ventilated, insu-lated, refrigerated, flat rack, vehiclerack, liquid tank, and open-top con-tainers without chassis, but does notinclude crates, boxes or pallets.

Contract party means any party sign-ing a service contract as a commoncarrier, conference, shipper or shippers’association. See §§ 514.7 and 514.17.

Controlled common carrier means anocean common carrier that is, or whoseoperating assets are, directly or indi-rectly owned or controlled by the gov-ernment under whose registry the ves-sels of the common carrier operate;ownership or control by a governmentshall be deemed to exist with respect toany common carrier if:

(1) A majority portion of the interestin the common carrier is owned or con-trolled in any manner by that govern-ment, by any agency thereof, or by anypublic or private person controlled bythat government; or

(2) That government has the right toappoint or disapprove the appointmentof a majority of the directors, the chiefoperating officer or the chief executiveofficer of the common carrier. See§§ 514.3(a)(2); 514.3(b); 514.4(c); 514.9(b);and 514.13(b)(7).

Data Element Dictionary (DED) meansa list of the data fields and the values,terms, and expressions allowable foreach field. The ATFI-specific Data Ele-ment Dictionary is a section in theATFI ‘‘Batch Filing Guide.’’ See§ 514.8(d)(3).

Destination scope means a locationgroup in a tariff detailing the allow-able destinations for TLIs defined inthat tariff. See §§ 514.11(b)(10) and514.13(b).

Dockage means the charge assessedagainst a vessel for berthing at awharf, pier, bulkhead structure, orbank or for mooring to a vessel soberthed. See also ‘‘terminal services.’’

Domestic offshore carrier means a car-rier engaged in the transportation bywater of cargo and/or passengers on thehigh seas or the Great Lakes on regu-lar routes from port to port betweenAlaska, Hawaii, a Territory, District or

possession of the United States andany other State, Territory, District orpossession of the United States, or be-tween places in the same Territory,District or possession. See§ 514.1(c)(2)(ii).

Domestic offshore commerce meanscommerce that may be engaged in bydomestic offshore carriers. See§ 514.1(c)(2)(ii).

Domestic offshore tariff means a tariffof port to port rates for transporting indomestic offshore commerce.

Dummy algorithm. See ‘‘null linkage.’’Edit checks. See ‘‘conformity checks.’’Effective date means the date (12:01

a.m.) upon which a filed tariff or tariffelement is scheduled to go into effectby the filer. See §§ 514.9(a) and514.10(a)(3).

Equipment interchange agreementmeans a sample agreement which in-cludes the general terms and condi-tions affecting cost (e.g., maintenanceand repair requirements, insurance ob-ligations, pickup or drop off chargesand services such as tracing and re-plenishing fuel or refrigerant for reefercontainers) that govern the use of car-rier-provided equipment followinginterchange, including cargo contain-ers, trailers and chassis. It also in-cludes the standard free time allowed,and detention or similar charges as-sessed. See §§ 514.3(a)(1) and514.15(b)(21).

Equipment interchange Tariff Rule orEquipment interchange tariff means ei-ther a Tariff Rule or general referencetariff which contains the terms andconditions, including standard freetime and charges, governing the use ofcarrier equipment following inter-change, and may incorporate an equip-ment interchange agreement and thefiler’s exceptions thereto. See§§ 514.12(c)(3) and 514.15(b)(21).

Essential terms. See ‘‘statement of es-sential terms.’’

Essential terms publication means thesingle publication which is maintainedby each carrier or conference for serv-ice contract(s) and which containsstatements of essential terms for everysuch contract. See § 514.17(b).

Expiration date means the last day,after which the entire tariff or tariffelement (e.g., TLI) is no longer in ef-fect. See ‘‘thru date’’ and § 514.10(a).


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46 CFR Ch. IV (10–1–96 Edition)§ 514.2

File or filing (of service contracts oramendments thereto) means actual re-ceipt at the Commission’s Washington,DC offices. See § 514.7.

File or filing (of tariff matter) meansthe electronic entering of tariff matterinto the ATFI computer after receiptby electronic means or physical deliv-ery of magnetic tape(s). See § 514.8(c).

Filing date (established by the ATFIsystem) means the date any tariff mat-ter is electronically transmitted to andentered into the system as a successfultransmission, or physically deliveredto a designated location(s) and date-time stamped. See §§ 514.8(c) and514.10(a)(2).

FMC examiner means an employee ofthe Commission who reviews tariffs toensure that they conform to the ship-ping statutes and the regulations setby the Commission.

Foreign commerce means that com-merce under the jurisdiction of the 1984Act.

Forest products means forest productsin an unfinished or semifinished statethat require special handling moving inlot sizes too large for a container, in-cluding, but not limited to, lumber inbundles, rough timber, ties, poles, pil-ing, laminated beams, bundled siding,bundled plywood, bundled core stock orveneers, bundled particle or fiberboards, bundled hardwood, wood pulpin rolls, wood pulp in unitized bales,paper board in rolls and paper in rolls.See §§ 514.3(b)(1) and 514.7(c).

Free time means the specified periodduring which cargo may occupy spaceassigned to it on terminal property freeof wharf demurrage or terminal storagecharges immediately prior to the load-ing or subsequent to the discharge ofsuch cargo on or off the vessel. See‘‘terminal services’’ and § 514.15(b)(23).‘‘Free time’’ is also accorded to cargoat destination rail terminals and des-tination motor terminals located at in-land points, as well as at containerfreight stations and other off-dock de-livery points removed from the termi-nal. Additionally, ‘‘free time’’ is a termcommonly used in connection with useof carrier equipment at both origin anddestination under, for example, equip-ment interchange tariffs.

Freight forwarder. See ‘‘ocean freightforwarder.’’

General decrease (domestic offshorecommerce) means any change in rates,fares, or charges which will:

(1) Result in a decrease in not lessthan 50 percent of the total rate, fare,or charge items in the tariffs per tradeof any carrier; and

(2) Directly result in a decrease ingross revenues of said carrier for theparticular trade of not less than 3 per-cent. See § 514.9(b)(7).

General increase (domestic offshorecommerce) means any change in rates,fares, or charges which will:

(1) Result in an increase in not lessthan 50 percent of the total rate, fare,or charge items in the tariffs per tradeof any carrier; and

(2) Directly result in an increase ingross revenues of said carrier for theparticular trade of not less than 3 per-cent. See § 514.9(b)(7).

Geographic area means the general lo-cation from which and/or to whichcargo subject to a service contract willmove in through service. See § 514.17.

Handling means the service of phys-ically moving cargo between point ofrest and any place on the terminal fa-cility, other than the end of ship’stackle. See ‘‘terminal services’’ and§ 514.15(b)(23).

Harmonized Code means the codingprovisions of the Harmonized System.See § 514.13(a).

Harmonized System means the ‘‘Inter-national Convention on the Har-monized Commodity Description andCoding System,’’ which may be ob-tained from the Customs CooperationCouncil (‘‘CCC’’) in Brussels, Belgium,or any of its authorized distributors.See § 514.13(a).

Heavy lift means the service of pro-viding heavy lift cranes and equipmentfor lifting cargo. See ‘‘terminal serv-ices’’ and § 514.15 (b)(4) and (b)(23).

In-bulk batch filing means batch filingby tariff publishers using the ATFItransaction sets to create files on mag-netic tape for physical delivery to theCommission’s ATFI Computer Center.Also referred to as tape batch filing.See § 514.8(c)(3).

Inland point means any city and asso-ciated state/province, country, U.S.ZIP code, or U.S. ZIP code range,which lies beyond port terminal areas.(A city may share the name of a port:


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the immediate ship-side and terminalarea is the port, but the rest of the cityis considered an inland point.) See§ 514.15(b)(1).

Inland rate means a rate specifiedfrom/to an ocean port to/from an inlandpoint, for specified modes of overlandtransportation. See § 514.15(b)(1).

Inland rate table means a structuredmatrix of geographic inland locations(points, U.S. ZIP code ranges, etc.) onone axis and transportation modes(truck, rail, etc.) on the other axis,with the inland rates specified at thematrix row and column intersections.See § 514.15(b)(1).

Interactive filing means the process bywhich a tariff filer accesses the ATFIsystem via dial-up, using telecommuni-cations links, a modem and terminal,and interacts with the system on atransaction by transaction basis to re-trieve its own tariff information, cre-ate tariff filings, and verify previousfilings. See § 514.8(c)(1).

Interactive retrieval means the processby which any member of the public ac-cesses the ATFI system via dial-upconnection, using telecommunicationslinks, a modem and a terminal, andinteracts with the system on a trans-action-by-transaction basis to retrievetariff matter of carriers, conferencesand terminal operators which has beenfiled in the ATFI database. See § 514.20.

Intermodal service. See ‘‘intermodaltransportation.’’

Intermodal transportation means con-tinuous transportation involving morethan one mode of service, (e.g., ship,rail, motor, air), for pickup and/or de-livery at a point beyond the area of theport at which the vessel calls. Theterm ‘‘intermodal transportation’’ canapply to ‘‘through transportation (atthrough rates)’’ or transportation onthrough routes using combinationrates. See § 514.15(b)(1).

Joint rates means rates or charges es-tablished by two or more common car-riers for ocean transportation over thecombined routes of such common car-riers. See § 514.15(b)(1).

Loading and unloading means theservice of loading or unloading cargobetween any place on the terminal andrailroad cars, trucks, lighters or bargesor any other means of conveyance to or

from the terminal facility. See ‘‘termi-nal services’’ and § 514.15(b)(23).

Local rates means rates or charges fortransportation over the route of a sin-gle common carrier (or any one com-mon carrier participating in a con-ference tariff), the application of whichis not contingent upon a prior or subse-quent movement. See § 514.15(b)(1).

Location group means a logical collec-tion of geographic points, ports, states/provinces, countries, or combinationsthereof, which is primarily used toidentify, by location group name, agroup that may represent tariff originand/or destination scope and TLI originand/or destination. See §§ 514.10(b) and514.11(b)(10).

Log in or log on means entering theATFI system to perform functions suchas filing or retrieving, and requires cer-tain formalities, such as password, ID,etc. See § 514.8(f).

Log off or log out means exiting theATFI system after the user is finishedwith functions such as filing or retriev-ing. Automatic log off or logout canoccur after certain periods of time. See§ 514.20(c)(2).

Loyalty contract (foreign commerce)means a contract with an ocean com-mon carrier or conference, other than aservice contract or contract based upontime-volume rates, by which a shipperobtains lower rates by committing allor a fixed portion of its cargo to thatcarrier or conference. See § 514.15(b)(27).

Marine terminal services agreementmeans an agreement as defined in§ 560.308(a) or § 572.310(a). See§ 514.3(a)(8).

1984 Act means the Shipping Act of1984.

1916 Act means the Shipping Act, 1916,as amended (including the IntercoastalShipping Act, 1933, and the Transpor-tation Act of 1940).

Non-vessel-operating common carrier (orNVOCC) (foreign commerce) means acommon carrier that does not operatethe vessels by which the ocean trans-portation is provided and is a shipperin its relationship with an ocean com-mon carrier.

Null linkage or dummy algorithmmeans a functionality to label and linkassessorial charges in full-text formatto ATFI objects, such as TLIs and com-modities. See § 514.10(d).


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46 CFR Ch. IV (10–1–96 Edition)§ 514.2

Ocean common carrier (foreign com-merce) means a vessel-operating com-mon carrier; but the term does not in-clude one engaged in ocean transpor-tation by ferry boat or ocean tramp.

Ocean freight forwarder (foreign com-merce) means a person in the UnitedStates that:

(1) Dispatches shipments from theUnited States via common carriers andbooks or otherwise arranges space forthose shipments on behalf of shippers;and

(2) Processes the documentation orperforms related activities incident tothose shipments.

On-line batch filing means the processby which a filer transmits tariff infor-mation, properly formatted in accord-ance with published ATFI transactionset formats, to the ATFI system as a‘‘batch’’ of transactions via dial-uptelecommunications links from its owncomputer. See § 514.8(c)(2).

Open for public inspection means themaintenance, in electronic or paperform, of a complete and current set ofthe tariffs used by a common carrier,conference or terminal operator, or towhich it is a party, in its office(s). See§ 514.8(k).

Open rate (foreign commerce) means arate on a specified commodity or com-modities over which a conference relin-quishes or suspends its ratemaking au-thority, in whole or in part, therebypermitting each individual ocean com-mon carrier member of the conferenceto fix its own rate on such commodityor commodities. See §§ 514.13(b)(19) and514.15(b)(15).

Organization name means an entity’sname on file with the Commission andfor which the Commission assigns anorganization number. See § 514.11(a).

Organization record means informa-tion regarding an entity, including itsname, address, organization number,carrier type, and the filing and effec-tive dates of the organization record.See § 514.11(a).

Origin scope means a location groupdefining the geographic range of cargoorigins covered by a tariff. See§§ 514.11(b)(10) and 514.13(b).

Owner (of tariff material) means thecarrier, conference or terminal estab-lishing the rates and charges in tariffmaterial and on whose behalf the tariff

material is filed. See ‘‘publisher (tar-iff).’’

Page-based tariff means the tradi-tional type of tariff in which rates arelisted on the pages of a paper docu-ment. See § 514.8(k)(2).

Person includes individuals, firms,partnerships, associations, companies,corporations, joint stock associations,trustees, receivers, agents, assigneesand personal representatives.

Point of rest means that area on theterminal facility which is assigned forthe receipt of inbound cargo from theship and from which inbound cargomay be delivered to the consignee, andthat area which is assigned for the re-ceipt of outbound cargo from shippersfor vessel loading. See § 514.15(b)(23).

Port means a place at which a com-mon carrier originates or terminates(by transshipment or otherwise) its ac-tual ocean carriage of cargo or pas-sengers as to any particular transpor-tation movement. See §§ 514.15(b)(1),(b)(13) and (b)(23).

Port range means those ports in thecountry of loading or unloading ofservice contract cargo that are regu-larly served by the contracting carrieror conference, as specified in its tariffof general applicability, even if thecontract itself contemplates use of buta single port within that range. See§§ 514.7 and 514.17.

Port terminal facilities means one ormore structures comprising a terminalunit, which include, but are not limitedto wharves, warehouses, covered and/oropen storage spaces, cold storageplants, grain elevators and/or bulkcargo loading and/or unloading struc-tures, landings, and receiving stations,used for the transmission, care andconvenience of cargo and/or passengersin the interchange of same betweenland and water carriers or between twowater carriers. See § 514.15(b)(23).

Post, posted, posting (of tariff matter—domestic offshore commerce) means themaintenance of a complete, up-to-datetariff, in electronic or paper form, atthe office(s) of each carrier party tothe tariff under conditions assuring itsavailability for inspection by membersof the public. See § 514.8(k).

Practices. See ‘‘tariff.’’Project rates means rates applicable

to the transportation of materials and


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equipment to be employed in the con-struction or development of a namedfacility used for a major governmental,charitable, manufacturing, resourceexploitation, public utility or publicservice purpose, and also including dis-aster relief projects. See § 514.13(a)(5).

Proportional rates means rates orcharges assessed by a common carrierfor transportation services, the appli-cation of which is conditioned upon aprior or subsequent movement. See§ 514.15(b)(1).

Publisher (tariff) means an organiza-tion authorized to file or amend tariffinformation.

Rate means a price quoted in a tarifffor providing a specified level of trans-portation service for a stated cargoquantity, from origin to destination,on and after a stated effective date orwithin a defined time frame. See§ 514.13(b)(19).

Retrieval. See ‘‘interactive retrieval.’’Round trip excursion voyage means a

single voyage in domestic offshorecommerce which originates and termi-nates at the same port, does not per-manently disembark passengers at anyintermediate port, and does not call atany port outside of the United States,its territories, commonwealths, dis-tricts or possessions. See § 514.3(a)(5).

Rules (in a tariff, i.e., Tariff Rules)means the stated terms and conditionsset by the tariff owner which governthe application of tariff rates, chargesand other matters. See § 514.15.

Scope means the location group(s)(geographic grouping(s)) listing theports or ranges of ports to and fromwhich the tariff’s rates apply. See§ 514.11(b)(10).

Service contract means a contract be-tween a shipper or shippers’ associa-tion and an ocean common carrier orconference, in which the shipper makesa commitment to provide a certainminimum quantity of its cargo orfreight revenue over a fixed time pe-riod, and the ocean common carrier orconference commits to a certain rateor rate schedule as well as a definedservice level -- such as, assured space,transit time, port rotation, or similarservice features. The contract may alsospecify provisions in the event of non-performance on the part of eitherparty. See § 514.7.

Service contract records means suchdocuments and information as will en-able the Commission to verify compli-ance with the terms of a service con-tract and shall include freighted oceanbills of lading or equivalent shippingdocuments which establish that theterms of the contract are being or havebeen met. See § 514.7(m).

Shipment means all of the cargo car-ried under the terms of a single bill oflading.

Shipper means an owner or person forwhose account the ocean transpor-tation of cargo is provided and includesthe person to whom delivery is to bemade (consignee).

Shippers’association (foreign commerce)means a group of shippers that consoli-dates or distributes freight on a non-profit basis for the members of thegroup in order to secure carload, truck-load, or other volume rates or servicecontracts.

Special case number means a codenumber assigned by the Commission toa specific filer for a limited, designatedpurpose, such as for a particular rate(TLI) increase to go into effect on lessthan statutory notice by special per-mission or for other ATFI associativechecks to be bypassed. See § 514.9(b)(19).

Special permission means permission,authorized by the Commission, for cer-tain tariff filings that do not conformwith applicable regulations, usually in-volving effectiveness on less than thenormal statutory notice.

Specimen bill of lading means a samplebill of lading contained in a tariff forexample purposes, which, in ATFI, isachieved by electronically entering theterms contained on the carrier’s bill oflading in the appropriate Tariff Rule.See § 514.15(b)(8).

Statement of essential terms means theconcise summary of all essential termsof a service contract required to befiled with the Commission and madeavailable to the general public in tariffformat by the carrier or conference inits Essential Terms Publication. See§ 514.17.

Submit or submission (foreign com-merce—service contracts) means ‘‘file’’ or‘‘filing’’ under this section. See § 514.7.

Substituted service means the use oftransportation performed by someoneother than the carrier for whom the


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tariff object is filed. See ‘‘alternateport service,’’ ‘‘transshipment,’’ and§§ 514.15(b)(1) and (b)(13).

Syntax check means an automaticsystem review of items in filings tocheck conformity with data elementtype and size, and other format re-quirements outlined in the ‘‘Batch Fil-ing Guide.’’ See § 514.8(n)(1)(i).

Tape batch filing. See ‘‘in-bulk batchfiling.’’

Tariff means a publication containingthe actual rates, charges, classifica-tions, Tariff Rules, regulations andpractices of a common carrier, con-ference of common carriers, or marineterminal operator. The term ‘‘prac-tices’’ refers to those usages, customsor modes of operation which in anyway affect, determine or change thetransportation rates, charges or serv-ices provided by a common carrier ormarine terminal operator, and, in thecase of conferences, must be restrictedto activities authorized by the basicconference agreement.

Tariff amendments. See ‘‘amend-ment.’’

Tariff filing means any tariff or modi-fication thereto which is received bythe Commission as properly filed pur-suant to these rules. See ‘‘file, filing’’and § 514.8(c).

Tariff line item (TLI) (with a 14-digitnumber) means a single freight rate, ineffect on and after a specific date or fora specific time period, for the transpor-tation of a stated cargo quantity,which may move from origin to des-tination under a single specified set oftransportation conditions, such as con-tainer size or temperature. See§ 514.13(b).

Tariff matter, tariff material, tariff pub-lication means a tariff and the essentialterms of service contracts, or any por-tion and amendment thereof, tenderedfor filing with the Commission pursu-ant to this part.

Tariff of general applicability (foreigncommerce—service contracts) means theeffective tariff, on file at the Commis-sion under this part, that would applyto the transportation in the absence ofa service contract. See §§ 514.7(h)(1)(iv)and 514.12(a).

Tariff record means a collection oftariff identification data that includethe name and type of the tariff, the

tariff number, publishing office, unitsof weight and measure, and the datethe tariff was filed, the date it becameeffective, and the date it expires. See§ 514.11(a).

Tariff Rule. See ‘‘rules (in a tariff)’’and § 514.15.

Terminal services includes checking;dockage; free time; handling; heavylift; loading and unloading; terminalstorage; usage; wharfage; and, wharfdemurrage, as defined in this section.The definition of terminal services setforth in this section shall be set forthin tariffs filed pursuant to this part ex-cept that other definitions of terminalservices may be used if they are cor-related by footnote or other appro-priate method to the definitions setforth herein. Any additional serviceswhich are offered shall be listed andcharges therefor shall be shown in ter-minal tariffs. See § 514.15(b)(23).

Terminal storage means the service ofproviding warehouse or other terminalfacilities for the storage of inbound oroutbound cargo after the expiration offree time, including wharf storage,shipside storage, closed or coveredstorage, open or ground storage, bond-ed storage and refrigerated storage,after storage arrangements have beenmade. See ‘‘terminal services’’ and§ 514.15(b)(23).

Termination date means the expira-tion date of a service contract or thedate the service contract is terminatedfor reasons not specifically set forth inthe contract. See § 514.17(d).

Through rate (domestic offshore com-merce) means a total charge for trans-portation from origin to destination. Itmay be a local rate, a joint rate, or acombination of separately establishedrates. See § 514.15(b)(1).

Through rate (foreign commerce) meansthe single amount charged by a com-mon carrier in connection withthrough transportation. See§ 514.15(b)(1).

Through route (domestic offshore com-merce) means continuous transpor-tation between origin and destinationfor which a through rate is assessedand which is offered or performed by:

(1) A single domestic offshore carrieroffering service between port terminalareas;


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(2) Two or more domestic offshorecarriers; or

(3) One or more domestic offshorecarriers in connection with one ormore other carriers. See § 514.15(b)(1).

Through transportation (domestic off-shore commerce) means continuoustransportation between points of originand destination, either or both ofwhich lie beyond port terminal areas,for which a through rate or combina-tion rate is assessed and which is of-fered or performed by one or more car-riers, at least one of which is a domes-tic offshore carrier. Through transpor-tation involving joint rates with serv-ices subject to ICC jurisdiction is notsubject to the jurisdiction of the FMC.See § 514.3(a)(3)(ii).

Through transportation (foreign com-merce) means continuous transpor-tation between points of origin anddestination, either or both of which liebeyond port terminal areas, for which athrough rate is assessed and which isoffered or performed by one or morecarriers, at least one of which is a com-mon carrier, between a United Statespoint or port and a foreign point orport. See § 514.15(b)(1).

Thru date means the date (11:59 p.m.)after which an amendment to a tariffelement (e.g., TLI rate) is designatedby the filer to be unavailable for useand the previously effective tariff ele-ment automatically goes back into ef-fect. See ‘‘expiration date’’ and§ 514.10(a)(5).

Time/volume rate (foreign commerce)means a rate published in a tariffwhich is conditional upon receipt of aspecified aggregate volume of cargo oraggregate freight revenue over a speci-fied period of time. See §§ 514.13(b)(19)and 514.15(b)(26).

TLI. See ‘‘tariff line item.’’Trade name(s) means a name or

names that a tariff filer uses for con-ducting business, but which is not nec-essarily its legal name. This is alsoknown as a ‘‘d/b/a’’ (doing business as)name. See § 514.11.

Traditional tariff means a page-basedtariff in which all of the tariff compo-nents are contained on the pages of apaper document. See § 514.8(k)(2).

Transaction set means a pre-defined,ATFI-compatible data format used forelectronic batch filing (electronic data

interchange or EDI) of tariff informa-tion. When using third-party softwarefor batch filing, all data must beformatted into the appropriate trans-action sets before it can be batch filedto the Commission through the ATFIsystem. The transaction set formatsare available to the public in the ATFI‘‘Batch Filing Guide.’’ See § 514.8(d)(3).

Transshipment means the physicaltransfer of cargo from a vessel of onecarrier to a vessel of another in thecourse of all-water or through trans-portation, where at least one of the ex-changing carriers is a vessel-operatingcarrier subject to the FMC’s jurisdic-tion. See § 514.15(b)(13).

Usage means the use of terminal fa-cility by any rail carrier, lighter opera-tor, trucker, shipper or consignee, itsagents, servants, and/or employees,when it performs its own car, lighter ortruck loading or unloading, or the useof said facilities for any other gainfulpurpose for which a charge is not oth-erwise specified. See ‘‘terminal serv-ices’’ and § 514.15(b)(23).

Validity check means a system reviewof certain items in filings to check con-formity with reference tables outlinedin the transaction sets and standardglossaries employed in ATFI, e.g., ori-gin and destination locations must becorrectly spelled and be members ofthe ATFI locations glossary. See§ 514.8(n)(1)(ii).

Via port(s) means the port or portgroup at which a vessel calls forthrough transportation of cargo fromanother origin and/or to another des-tination.

Wharf demurrage means a charge as-sessed against cargo remaining in or onterminal facilities after the expirationof free time, unless arrangements havebeen made for storage. See ‘‘terminalservices.’’

Wharfage means a charge assessedagainst the cargo or vessel on all cargopassing or conveyed over, onto, orunder wharves or between vessels (to orfrom barge, lighter, or water), whenberthed at wharf or when moored inslip adjacent to wharf. Wharfage issolely the charge for use of wharf anddoes not include charges for any otherservice. See ‘‘terminal services’’ and§ 514.15(b)(23).


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46 CFR Ch. IV (10–1–96 Edition)§ 514.3

Workdays (domestic offshore commerce)means all days except Saturdays, Sun-days, and all federal holidays observedin the District of Columbia. See§ 514.9(b)(24)(ii).

[57 FR 36271, Aug. 12, 1992, as amended at 57FR 44509, Sept. 28, 1992; 57 FR 46322, Oct. 8,1992; 58 FR 27, Jan. 4, 1993]

§ 514.3 Exemptions and exclusions.Applications for exemptions are gov-

erned by § 502.69 of this chapter. Thefollowing exemptions are granted fromcertain described requirements of thispart:

(a) Certain services involved in the fol-lowing:

(1) Equipment interchange agreements.Equipment-interchange agreements be-tween common carriers subject to thispart and inland carriers, where suchagreements are not referred to in thecarriers’ tariffs and do not affect thetariff rates, charges or practices of thecarriers, are exempt from the tariff fil-ing requirements of the 1916 and 1984Acts and the rules of this part. See§§ 514.12(b)(3) and 514.15(b)(21).

(2) Controlled common carriers in for-eign commerce. A controlled commoncarrier shall be exempt from the provi-sions of this part exclusively applicableto controlled common carriers (See§ 514.4(c)) when:

(i) The vessels of the controllingstate are entitled by a treaty of theUnited States to receive national ormost-favored-nation treatment;

(ii) The controlling state subscribed,as of November 17, 1978, to the shippingpolicy statement contained in note 1,Annex ‘‘A’’ of the Code of Liberaliza-tion of Current Invisible Operations,adopted by the Council of the Organiza-tion for Economic Cooperation and De-velopment;

(iii) As to any particular rate, thecontrolled common carrier’s tariff con-tains an amount set by the duly au-thorized action of a ratemaking body,except that this exemption is inap-plicable to rates established pursuantto an agreement in which all the mem-bers are controlled common carriersnot otherwise excluded by this para-graph (see § 514.9(b)(24)(i)(A));

(iv) The controlled common carrier’srates, charges, classifications, TariffRules or regulations govern transpor-

tation of cargo between the controllingstate and the United States, includingits districts, territories and possessions(see § 514.9(b)(24)(i)(B)); or

(v) The controlled common carrieroperates in a trade served exclusivelyby controlled common carriers (see§ 514.9(b)(24)(i)(C)).

(3) Interstate Commerce Commission(‘‘ICC’’). Transportation in domesticoffshore commerce which is subject tothe jurisdiction of the Interstate Com-merce Commission under 49 U.S.C. Ch.105 is not subject to the tariff filing re-quirements of the 1916 Act and therules of this part.

(4) Marine terminal operations of DOD.When the Department of Defense (in-cluding the military department andall agencies of the Department of De-fense) carries on the business of fur-nishing wharfage, dock, warehouse, orother terminal facilities, as defined in§ 514.2, it shall be exempt from the ter-minal tariff filing and publication re-quirements of this part.

(5) Round trip passenger excursion voy-ages in domestic offshore commerce.Round trip passenger excursion voy-ages in domestic offshore commerceare exempt from the tariff filing re-quirements of the 1916 Act and therules of this part.

(6) Certain small vessels in domestic off-shore commerce. Transportation in do-mestic offshore commerce by vesselswith a cargo carrying capacity of 100tons or less, or with an indicated horse-power of 100 or less, is exempt from thetariff filing requirements of the 1916Act and the rules of this part, but onlyif such vessels:

(i) Are not employed by or under thecommon control or management of adomestic offshore carrier which oper-ates vessels in excess of these limits;

(ii) Are not operated as part of athrough route with another domesticoffshore carrier; and

(iii) Are not performing lighterageservices in connection with or on be-half of another domestic offshore car-rier.

(7) Terminal barge operators in PacificSlope States. Transportation providedby terminal barge operators in PacificSlope States barging containers andcontainerized cargo by barge betweenpoints in the United States are exempt


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from the tariff filing requirements ofthe 1916 and 1984 Acts and the rules ofthis part, where:

(i) The cargo is moving between apoint in a foreign country or a non-contiguous State, territory, or posses-sion and a point in the United States;

(ii) The transportation by barge be-tween points in the United States isfurnished by a terminal operator as aservice substitute in lieu of a directvessel call by the common carrier bywater transporting the containers orcontainerized cargo under a throughbill of lading; and

(iii) Such terminal operator is a Pa-cific Slope State, municipality, orother public body or agency subject tothe jurisdiction of the Federal Mari-time Commission, and the only one fur-nishing the particular circumscribedbarge service in question as of January2, 1975.

(8) Certain terminal services. (i) The fil-ing requirements of this part do notapply to rates and charges for storageof cargo and services incidental theretoby public warehousemen pursuant tostorage agreements covered by issuedwarehouse receipts.

(ii) Rates, charges, rules and regula-tions governing terminal services pro-vided to and paid for by common car-riers by water pursuant to a marineterminal services agreement as definedin § 560.308(a) or § 572.310(a) of this chap-ter, need not be separately filed in tar-iffs for the purposes of this part, oncondition that such rates, charges,rules and regulations are not deter-mined through a marine terminal con-ference agreement, as defined in§§ 560.307(b) and 572.307(b) of this chap-ter.

(iii) Rates, charges, rules and/or regu-lations which but for paragraph(a)(8)(ii) of this section would be sub-ject to the tariff-filing requirements ofthis part may not unilaterally imposeexculpatory provisions of a nature pro-hibited by § 514.4(b)(3)(ii).

(9) Terminal tariffs; electronic formatrequirements. Marine terminal tariffsare exempt from the commodity-de-scription and TLI-object requirementsof this part, but only to the extent nec-essary to accommodate electronic fil-ing of such tariffs in full-text format inTariff Rule 34 (§ 514.15(b)(34).

(10) NVOCCs in domestic offshore com-merce. Non-vessel-operating commoncarriers (‘‘NVOCCs’’) providing trans-portation in domestic offshore com-merce are exempt from the provisionsof section 3 of the Intercoastal Ship-ping Act, 1933, 46 U.S.C. app. 845, andthus, from the suspension provisions of§ 514.19(a). The reasonableness ofNVOCC rates in domestic offshore com-merce may be determined under theprovisions of section 18 of the 1916 Act,46 U.S.C. app. 817.

(b) Certain cargo types—(1) Bulk, forestproducts, etc. (i) Except as provided inparagraphs (b)(1)(ii) and (iii) of thissection, this part does not apply tobulk cargo, forest products, recycledmetal scrap, waste paper and paperwaste in foreign tariffs, terminal tar-iffs or service contracts.

(ii) Marine terminal operators, car-riers or conferences which voluntarilyfile tariff or service contract provisionscovering otherwise exempt transpor-tation thereby subject themselves toall statutory provisions and the re-quirements of this part, including therequirement to adhere to the filed tar-iff provisions or service contracts.

(iii) An exempt commodity listed inparagraph (b)(1) of this section may beincluded in a service contract filedwith the Commission only if:

(A) There is a tariff of general appli-cability for the transportation whichcontains a specific commodity rate forthe exempted commodity; or

(B) The contract itself sets forth arate or charge which will be applied ifthe contract is rejected or otherwiseterminated.

(2) Mail in foreign commerce. Transpor-tation of mail between the UnitedStates and foreign countries is exemptfrom the filing requirements of the 1984Act and the rules of this part.

(3) Used military household goods—NVOCCs. Transportation of used mili-tary household goods and personal ef-fects by non-vessel-operating commoncarriers is exempt from the filing re-quirements of the 1916 and 1984 Actsand the rules of this part.

(4) Department of Defense cargo in for-eign commerce. Transportation of U.S.Department of Defense cargo moving inforeign commerce under terms andconditions negotiated and approved by


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46 CFR Ch. IV (10–1–96 Edition)§ 514.3

the Military Sealift Command (‘‘MSC’’)and published in a rate guide,quotation or tender is exempt from thetariff filing requirements of the 1984Act and the rules of this part. An exactcopy of the rate guide, quotation ortender, including any amendmentsthereto, shall be filed in paper formatwith the Commission as soon as it be-comes available.

(5) Used household goods—GeneralServices Administration. Transportationof used household goods and personaleffects by non-vessel-operating com-mon carriers shipped by federal civil-ian executive agencies under the Inter-national Household Goods Program ad-ministered by the General Services Ad-ministration is exempt from the filingrequirements of the 1916 and 1984 Actsand the rules of this part.

(c) Certain locations in foreign com-merce—(1) Between foreign countries.This part does not apply to transpor-tation of cargo between foreign coun-tries, including that which is trans-shipped from one ocean common car-rier to another (or between vessels ofthe same common carrier) at a U.S.port or transferred between an oceancommon carrier and another transpor-tation mode at a U.S. port for overlandcarriage through the United States,where the ocean common carrier ac-cepts custody of the cargo in a foreigncountry and issues a through bill oflading covering its transportation to aforeign point of destination.

(2) Between Canada and U.S. The fol-lowing services are exempt from thefiling requirements of the 1984 Act andthe rules of this part:

(i) Prince Rupert and Alaska—(A) Ve-hicles. Transportation by vessels oper-ated by the State of Alaska betweenPrince Rupert, Canada and ports insoutheastern Alaska, if all the follow-ing conditions are met:

(1) Carriage of property is limited tovehicles;

(2) Tolls levied for vehicles are basedsolely on space utilized rather than theweight or contents of the vehicle andare the same whether the vehicle isloaded or empty;

(3) The vessel operator does not movethe vehicles on or off the ship; and

(4) The common carrier does not par-ticipate in any joint rates establishing

through routes or in any other type ofagreement with any other common car-rier.

(B) Passengers. Transportation of pas-sengers, commercial buses carryingpassengers, personal vehicles and per-sonal effects by vessels operated by theState of Alaska between Seattle, Wash-ington and Prince Rupert, Canada,only if such vehicles and personal ef-fects are the accompanying personalproperty of the passengers and are nottransported for the purpose of sale.

(ii) British Columbia and Puget SoundPorts; rail cars—(A) Through rates.Transportation by water of cargo mov-ing in rail cars between British Colum-bia, Canada and United States ports onPuget Sound, and between British Co-lumbia, Canada and ports or points inAlaska, only if the cargo does notoriginate in or is not destined to for-eign countries other than Canada, butonly if:

(1) The through rates are filed withthe Interstate Commerce Commissionand/or the Canadian Transport Com-mission; and

(2) Certified copies of the rate divi-sions and of all agreements, arrange-ments or concurrences, entered into inconnection with the transportation ofsuch cargo, are filed with the Commis-sion within 30 days of the effectivenessof such rate divisions, agreements, ar-rangements or concurrences.

(B) Bulk; port-to-port. Transportationby water of cargo moving in bulk with-out mark or count in rail cars on alocal port-to-port rate basis betweenports in British Columbia, Canada andUnited States ports on Puget Sound,only if the rates charged for any par-ticular bulk type commodity on anyone sailing are identical for all ship-pers, except that:

(1) This exemption shall not apply tocargo originating in or destined to for-eign countries other than Canada; and

(2) The carrier will remain subject toall other provisions of the Shipping Actof 1984.

(iii) Incan Superior, Ltd. Transpor-tation by Incan Superior, Ltd. of cargomoving in railroad cars between Thun-der Bay, Ontario, and Superior, Wis-consin, only if the cargo does not origi-nate in or is not destined to foreigncountries other than Canada, and if:


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(A) The through rates are filed withthe Interstate Commerce Commissionand/or the Canadian Transport Com-mission; and

(B) Certified copies of the rate divi-sions and of all agreements, arrange-ments or concurrences entered into inconnection with the transportation ofsuch cargo are filed with the Commis-sion within 30 days of the effectivenessof such rate divisions, agreements, ar-rangements or concurrences.

(d) Domestic offshore commerce—(1) No-tice requirements; general. Carriers en-gaged in the transportation by water ofpassengers or property on the high seasor the Great Lakes on regular routesfrom port to port between Alaska, Ha-waii, a Territory, District or possessionof the United States and any otherState, Territory, District or possessionof the United States, or between placesin the same Territory, District, or pos-session, may publish:

(i) On one day’s notice, any new oramendatory tariff matter that does notresult in an increased cost to the ship-per. This exemption may not apply toany decrease which is part of a ‘‘gen-eral decrease in rates’’ as defined bysection 1 of the 1933 Act. See § 514.2; and

(ii) On seven workdays’ notice, anynew or amendatory tariff matter thatresults in an increased cost to the ship-per. This exemption may not apply toany increase which is part of a ‘‘gen-eral increase in rates’’ as defined bysection 1 of the 1933 Act (see § 514.2), orany increase which is part of an‘‘across-the-board’’ increase in rates asdefined in § 514.2.

(2) Alaska—(i) Bethel—KuskokwimBay. Transportation between Bethel,Alaska and points in the KuskokwimBay region in the range from Platinumto Mekoryuk is exempt from the filingrequirements of the 1916 Act and therules of this part.

(ii) Seattle—S.E. Alaska on State-of-Alaska operated vessels. Transportationof passengers, commercial buses carry-ing passengers, personal vehicles andpersonal effects by vessels operated bythe State of Alaska between Seattle,Washington, and ports in SoutheasternAlaska, is exempt from the filing re-quirements of the 1916 Act and therules of this part, only if said personalvehicles and personal effects are not

transported for the purpose of sale,lease, or other commercial activities.

(3) [Reserved](4) Puerto Rico—(i) Bulk liquid cargo.

Transportation between the continen-tal United States and Puerto Rico ofbulk liquid cargoes in quantities of notless than 200,000 gallons per shipment(i.e., a single shipper to a single con-signee) is exempt from the filing re-quirements of the 1916 Act and therules of this part, only if such ship-ments are carried in tank vessels de-signed exclusively for bulk liquid car-goes and which are certified under reg-ulations approved by the U.S. CoastGuard pursuant to 46 U.S.C. 3306.

(ii) [Reserved](5) [Reserved](e) Electronic filing. A temporary ex-

emption from the electronic filing re-quirements of this part may be ob-tained by application under § 514.8(a),but, during the period of such exemp-tion and unless otherwise exempted bythis part, tariff material is required tobe filed in paper format under parts515, 550, 580 and/or 581 of this chapter.

[57 FR 36271, Aug. 12, 1992, as amended at 57FR 44509, Sept. 28, 1992; 57 FR 44700, Sept. 29,1992; 58 FR 28790, May 17, 1993; 60 FR 44437,Aug. 28, 1995]

§ 514.4 Content, filing and cancellationof tariff material; general.

(a) Effectiveness of new or initial andconference tariffs in the domestic offshoreand foreign trades. Unless otherwiseprovided by the Commission or thispart, all conference and carrier tariffmaterial tendered for filing (includingthe tariffs of carriers entering a tradefor the first time), shall bear an effec-tive date which complies with the ap-propriate notice period(s) prescribed in§ 514.9 or in other sections of this part.The notice period between filing andeffective date shall commence at 12:01a.m. of the day of filing, as evidencedby the Commission’s receipt notation.The tariff may take effect at 12:01 a.m.of the day after the notice period ex-pires.

(b) Prohibitions—(1) Foreign languagetariffs. (i) Tariffs and essential terms ofservice contracts in foreign languages


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46 CFR Ch. IV (10–1–96 Edition)§ 514.4

will not be accepted. Filers may, how-ever, include foreign language com-modity descriptions, TLI notes, andcommodity index entries, but only if:

(A) The non-English entries followthe English entries; and

(B) The non-English text is preciselytranslated from the English.

(ii) The English wording shall haveprecedence in any question of interpre-tation.

(2) Ambiguous, duplicating and conflict-ing provisions. No person may publishand file any tariff matter which con-tains ambiguous language or duplicatesor conflicts with any other tariff mat-ter on file with the Commission inwhich such person is a party or partici-pant, whether filed by such person orby an authorized agent.

(3) Limiting or qualifying provisions—(i) Limitation of liability. Tariffs maynot contain Tariff Rules purporting tolimit liability for loss or damage in amanner that is prohibited by applicablestatute or regulation.

(ii) Exculpatory tariff provisions. Noterminal tariff may contain provisionsthat exculpate or otherwise relieve ma-rine terminal operators from liabilityfor their own negligence, or that im-pose upon others the obligation to in-demnify or hold-harmless the termi-nals from liability for their own neg-ligence.

(iii) Rates in other tariffs. Except asspecifically allowed in this part (see§ 514.12):

(A) No rate tariff may require ref-erence to or be governed by anotherrate tariff; and

(B) The publication of a statement ina tariff to the effect that the rates pub-lished therein take precedence over therates published in some other tariff, orthat the rates published in some othertariff take precedence over or alternatewith rates published therein, is prohib-ited.

(iv) Modification of essential terms. Es-sential terms of service contracts maynot contain any provision permittingmodification by the parties other thanin full compliance with this part.

(c) Controlled common carriers—(1)Controlled common carrier rates—(i) Levelof rates and charges. Except as providedin § 514.3(a)(2), no controlled commoncarrier may maintain rates or charges

in its tariffs filed with the Commissionthat are below a level that is just andreasonable, nor may any such carrierestablish or maintain unjust or unrea-sonable classifications, Tariff Rules, orregulations in those tariffs. An unjustor unreasonable classification, TariffRule or regulation means one that re-sults or is likely to result in the car-riage or handling of cargo at rates orcharges that are below a just and rea-sonable level.

(ii) Commission disapproval. The Com-mission may, at any time after noticeand hearing, disapprove any rates,charges, classifications, Tariff Rules orregulations that the controlled com-mon carrier has failed to demonstrateto be just and reasonable. In a proceed-ing under this paragraph, the burden ofproof is on the controlled common car-rier to demonstrate that its rates,charges, classifications, Tariff Rules orregulations are just and reasonable.Rates, charges, classifications, TariffRules or regulations filed by a con-trolled common carrier that have beenrejected, suspended, or disapproved bythe Commission are void and their useis unlawful.

(iii) Effective date of rates. The rates,charges, classifications, Tariff Rules orregulations of controlled common car-riers may not, without special permis-sion of the Commission, become effec-tive sooner than the 30th day after thedate of filing with the Commission.

(2) Classification as a controlled com-mon carrier. (i) The Commission will no-tify any common carrier of its classi-fication as a controlled common car-rier and enter such classification inATFI.

(ii) Any common carrier contestingsuch a classification may, within 30days after the date of the Commission’snotice, submit a rebuttal statement.

(iii) The Commission shall review therebuttal and notify the common carrierof its final decision within 30 days fromthe date the rebuttal statement wasfiled.

(d) Duty and authority to file—(1) Gen-eral procedure. (i) Except as provided inparagraph (d)(1)(ii) of this section, au-thority to obtain or delegate authorityfor using USERID and password under§ 514.8(f) for filing and amending par-ticular types of tariff material, as well


163


as authority to change filing and edit-ing authority, must be requested by aresponsible official of the tariff ownerin writing, using the registration formin exhibit 1 to this part, showing (orattaching) all necessary approvals andpaying the appropriate fee under§ 514.21.

(ii) In an emergency, a person, al-ready authorized to maintain and editits firm’s organization record under§ 514.11(a), may change a ‘‘publisher’’under § 514.11(a)(9)(iii), verbally notifyBTCL, and promptly submit the properdocuments.

(2) Domestic offshore tariffs. (i) Tariffsin domestic offshore commerce may befiled only by a responsible official of,or a tariff agent appointed by, a domes-tic offshore carrier participating in thetransportation offered therein. When atariff agent is employed, a delegationof authority from each participating,domestic offshore carrier must be pro-vided.

(ii) The request for filing authorityshall state that a tariff agent has beenappointed as of a particular date, iden-tify the agent by name and businessaddress, indicate whether and underwhat circumstances any other personis authorized to serve as an alternateagent, and specifically set forth theagent’s powers and duties to act for thecarrier in tariff matters. Only one al-ternate agent may be appointed.

(iii) More than one delegation of au-thority covering any one tariff is pro-hibited, except that governing tariffsfiled pursuant to § 514.12 may be thesubject of separate delegations. Sub-mission of a subsequent delegation ofauthority covering a tariff, governingtariff or group of tariffs, shall auto-matically revoke any earlier delega-tion as to that tariff or tariffs on theday the subsequent delegation is filed,as evidenced by the Commission’s re-ceipt notation.

(iv) A delegation of authority to atariff agent may be revoked in whole orin part by filing a written revocationwhich clearly identifies the delegationof authority and the particular powersand duties being revoked.

(v) Should a carrier enter receiver-ship, or otherwise come under the con-trol of a trustee, the duty and author-ity to file tariff material shall be upon

the receiver or trustee appointed untilthe receivership/trusteeship is termi-nated.

(3) Foreign tariffs. (i) Tariffs in for-eign commerce shall be filed by an offi-cer or employee of the common carrieror, if a conference tariff, by an officeror employee of the conference. In thealternative, filing may be accom-plished through an agent authorized toact for such common carrier or con-ference.

(ii) A common carrier or conferencemay delegate authority to a person,not an official or employee of suchcommon carrier or conference, for thepurpose of issuing all its tariffs or anyparticular tariff.

(iii) Whenever there is a delegation oftariff-issuing authority by a commoncarrier or conference, the request shallset forth the exact limits of the agent’sauthority.

(4) Conference-related situations in for-eign commerce—(i) Admission to member-ship. Before a common carrier is admit-ted to membership in a conference, itshall electronically file notice of can-cellation of any independent tariff ap-plicable to the trade served by the con-ference, effective upon the date of ad-mission to conference membership,making reference to the conferencetariff and where the conference tariffmay be examined. The filing of theindependent tariff(s) and admission toconference membership may become ef-fective upon the date of filing, exceptthat, unless Special Permission isgranted pursuant to § 514.18, cancella-tion of the independent tariff and ad-mission to conference membership re-quires 30 days’ notice if:

(A) The carrier is a controlled car-rier, or

(B) The addition of the carrier to theconference would result in a ratechange from the carrier’s independenttariff which causes an increase in costto the shipper.

(ii) Duties of members. (A) Commoncarrier participants in a conferencetariff are not relieved from the neces-sity of complying with the Commis-sion’s regulations and the require-ments of section 8(a)(1) of the 1984 Actwith regard to keeping tariffs open forpublic inspection. See § 514.8(k)(1).


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(B) A common carrier’s obligation tofile tariffs pursuant to section 8(a) ofthe 1984 Act and this part must be car-ried out as follows:

(1) When the common carrier is not aparty to an agreement, by filing itsown tariff or tariffs.

(2) When the common carrier is partyto an agreement, by participation in asingle tariff filed by the conference, ex-cept that this requirement shall notapply to:

(i) Ratemaking agreements either be-tween or among conferences, or be-tween one or more conferences and oneor more independent carriers; or

(ii) New conference agreements, newmembers to such agreements, or en-largements of the geographic scope ofconference agreements, until ninety(90) days after the fact, unless specialpermission to extend that period isgranted for good cause shown.

(C) When the common carrier’s tariffis a conference tariff, the common car-rier shall ensure that the conferencepublishes the common carrier’s tariffprovisions in the conference tariff.

(iii) Independent action rates of con-trolled carriers. Conferences may file onbehalf of their controlled common car-rier members lower independent-actionrates on less than 30 days’ notice, sub-ject to the requirements of their basicagreements and subject to such ratesbeing filed at or above the level set bya member of the conference that hasnot been determined by the Commis-sion to be a controlled common carriersubject to section 9 of the 1984 Act, inthe trade involved.

(5) Service contracts and essential termsin foreign commerce. (i) As further pro-vided in paragraph (d)(5)(ii) of this sec-tion, the duty under this part to fileservice contracts, statements of essen-tial terms and notices, and to maintainan essential terms publication under§ 514.17, shall be upon:

(A) A service contract signatory car-rier which is not a member of a con-ference for the service covered by thecontract; or

(B) The conference which:(1) Is signatory to the service con-

tract; or(2) Has one or more member carriers

signatory to a service contract for a

service otherwise covered by the con-ference agreement.

(ii) When a conference files a servicecontract for and on behalf of one ormore of its member lines and the con-tract covers service from, to or be-tween ports and/or points not includedwithin the scope of the conference, thecomplete text of the statement of es-sential terms shall be simultaneouslyfiled in the essential terms publica-tions of both the conference(s) and car-rier(s) involved, which shall complywith all other essential terms publica-tion filing and maintenance require-ments under §§ 514.7 and 514.17.

(6) Transfer of operations or control;changes in name or conference member-ship. (i)(A) Whenever a conference orcommon carrier with an individual tar-iff on file changes its name or transfersoperating control to another entity orperson, the person who will thereaftermanage the conference or operate thecommon carrier service shall submit awritten application to the FMC. Theapplication shall be accompanied byappropriate completed ATFI User Reg-istration Form(s) (exhibit 1 to thispart), if needed, and with the properuser charge under § 514.21(c) (for filerinitial registration), to procedurallytransfer the tariff to the succeedingperson or firm. Subsequent amend-ments to such tariffs shall be in thename of the new conference or commoncarrier, as applicable.

(B) Requests to procedurally transferonly part of the service extended undera given rate tariff will not be granted.

(ii) Domestic offshore tariffs namingparticipating carriers shall be amendedwithin 90 days whenever any partici-pating carrier transfers its operations,transfers control of its business, orchanges its name, and the successorcarrier continues to participate in theservice. The amendment shall deleteall references to the transferring car-rier (or old name) and substitute ref-erences to the successor carrier (or newname) in their place.

(iii) Whenever the name of a commoncarrier which participates in a con-ference is changed, the conference shallfile an appropriate amendment to itstariff indicating the participating com-mon carrier’s new name.


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(iv) Whenever the operation, controlor ownership of a common carrier istransferred resulting in a majority por-tion of the interest of that commoncarrier being owned or controlled inany manner by a government underwhose registry the vessels of the com-mon carrier are operated, the commoncarrier shall immediately notify theCommission in writing of the details ofthe change.

(e) Cancellation—(1) Tariffs. (i) An en-tire tariff may be canceled by the filer,or by the Commission for good cause,by appropriately changing the expira-tion date in the tariff record. See§ 514.11(b).

(ii) Cancellation of a tariff due to acessation of all service by the publish-ing carrier between the ports or pointslisted in the canceled tariff may takeeffect on the same day it is filed.

(iii) The tariffs and delegations of au-thority of a carrier which ceases oper-ations in a trade for more than 30 days(other than for seasonal discontinu-ance) shall be canceled within 60 daysafter the cessation of operations.

(2) Essential terms. The statement ofessential terms may not be canceleduntil after all of its associated servicecontracts, including any renewal or ex-tension, have expired. In the event acontract is terminated under§ 514.7(l)(1)(ii), the effective date of thetermination shall be used as the date ofcancellation (contract terminationdate under § 514.17(d)(5)).

[57 FR 36271, Aug. 12, 1992, as amended at 57FR 44509, Sept. 28, 1992]

§§ 514.5—514.6 [Reserved]

Subpart B—Service Contracts§ 514.7 Service contracts in foreign

commerce.(a) Scope and applicability. Service

contracts shall apply only to transpor-tation of cargo moving from, to orthrough a United States port in theforeign commerce of the United States.While tariffs and the essential terms ofservice contracts are required to befiled electronically and made availableto the public under subpart C of thispart, service contracts themselves andamendments thereto (incorporatingmandatory essential terms as described

in § 514.17 and confidential names ofshippers, etc.), as well as certain relat-ed notices, shall be filed in paper, hardcopy format under this subpart andsection.

(b) Confidentiality. All service con-tracts and amendments to service con-tracts filed with the Commission shall,to the full extent permitted by law, beheld in confidence.

(c) Exempt commodities. Except as pro-vided in paragraphs (c)(1) and (c)(2) ofthis section, this section does notapply to contracts relating to bulkcargo, forest products, recycled metalscrap, waste paper or paper waste.

(1) Inclusion in service contracts. Anexempt commodity listed in this para-graph may be included in a service con-tract filed with the Commission, butonly if:

(i) There is a tariff of general appli-cability for the transportation, whichcontains a specific commodity rate forthe exempted commodity; or

(ii) The contract itself sets forth arate or charge which will be applied ifthe contract is rejected or otherwiseterminated.

(2) Waiver of exemption. Upon filingunder this paragraph, the service con-tract and essential terms shall be sub-ject to the same requirements as thosefor contracts involving non-exemptcommodities.

(d) Service contracts with non-vessel-op-erating common carriers. No ocean com-mon carrier or conference may executeor file any service contract in which acontract party or an affiliate of suchcontract party or member of a ship-pers’ association entitled to receiveservice under the contract is anNVOCC, unless such NVOCC has a tar-iff and proof of financial responsibilityas required by sections 8 and 23 of theShipping Act of 1984 and Commissionregulations under this part and part 583of this chapter.

(e) Certification of shipper status—(1)Certification. The shipper contractparty shall certify on the signaturepage of the service contract its shipperstatus, e.g., owner of the cargo, ship-pers’ association, NVOCC, or specifiedother designation, and the status ofevery affiliate of such contract partyor member of a shippers’ associationentitled to receive service under the


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contract. The certification shall besigned by the contract party.

(2) Proof of tariff and bond. If the cer-tification completed by the contractparty under paragraph (e)(1) of this sec-tion identifies the contract party or anaffiliate or member of a shippers’ asso-ciation as an NVOCC, the ocean com-mon carrier or conference shall obtainproof that such NVOCC has a tariff anda bond as required under section 8 and23 of the 1984 Act before signing theservice contract. An ocean commoncarrier or conference can obtain proofof an NVOCC’s compliance by consult-ing a current list published by theCommission of NVOCCs in compliancewith the tariff and bonding require-ments or by reviewing a copy of thetariff rule published by the NVOCC andin effect under § 514.15(b)(24).

(3) Joining shippers’ association duringterm of contract. If an NVOCC joins ashippers’ association during the termof a service contract and is entitled toreceive service under the contract, theNVOCC shall provide to the ocean com-mon carrier or conference the proof ofcompliance required by paragraph(e)(2) of this section prior to any ship-ments under the contract.

(4) Reliance on NVOCC proof; inde-pendent knowledge. An ocean commoncarrier or conference executing a serv-ice contract shall be deemed to havecomplied with section 10(b)(15) of the1984 Act upon meeting the require-ments of paragraphs (e)(1) and (e)(2) ofthis section, unless the ocean commoncarrier had reason to know such cer-tification or documentation of NVOCCtariff and bonding was false.

(f) Availability of essential terms. Astatement of the essential terms ofeach initial and amended service con-tract, as set forth in tariff format,shall be made available for inspectionby the general public pursuant to therequirements of this section and§ 514.17.

(1) Availability of terms. The essentialterms of an initial or amended servicecontract shall be made available foruse in a contract to all other shippersor shippers’ associations similarly situ-ated, under the same terms and condi-tions, for a specified period of no lessthan thirty (30) days from the date offiling of the essential terms of the

service contract or amendment theretounder § 514.17, as may be adjusted underparagraph (j)(4) of this section, exceptthat, where a shipper or shippers’ asso-ciation not a party to the original con-tract exercises its right to access theamended contract, the minimum vol-ume obligation for the accessing ship-per or shippers’ association shall bepro-rated according to the relation be-tween the duration of the original (nowamended) contract and the duration ofthe access contract. The conference orcarrier may specify in the EssentialTerms Publication the informationwhich must accompany a me-too re-quest and the procedures for submit-ting same.

(2) Me-too requests and replies. (i)Whenever a shipper or shippers’ asso-ciation desires to enter into an initialor amended service contract with thesame essential terms as in another ex-isting service contract, a request shallbe submitted to the carrier or con-ference in writing.

(ii) The carrier or conference shallreply to the request by mailing, orother suitable form of delivery, within14 days of the receipt of the request, ei-ther a contract offer with the same es-sential terms which can be acceptedand signed by the recipient upon re-ceipt, or an explanation in writing whythe applicant is not entitled to such acontract. The carrier or conferencemay require the contract offer to be ac-cepted within a specified period oftime.

(3) Filing of me-too contracts. The serv-ice contract resulting from a requestunder this section may be implementedas described in paragraph (j)(3) of thissection, and no additional statement ofessential terms need be filed. The let-ter transmitting the service contractitself for filing, however, shall indicatethat it is a ‘‘me-too’’ contract and ref-erence the essential terms FMC FileNumber. See § 514.17(d)(4)(i).

(4) Changes in me-too contracts. In thecase of any expressly described subse-quent event which results in a changeto an original essential term by the op-eration of a contract clause in the serv-ice contract under § 514.17(d)(7)(viii),the new essential term(s) shall be im-mediately made available in writing to


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other shippers and shippers’ associa-tions which have entered into a con-tract with the same, original essentialterms, and which are similarly affectedby the event. Copies shall also be sub-mitted to the Commission under para-graph (g)(2)(i) of this section.

(g) Filing of service contract materials.Authorized persons under § 514.4(d)(5)shall file with BTCL the following:

(1) Service contracts. Within ten (10)days of the electronic filing of essen-tial terms under § 514.17, a true andcomplete copy of the related con-tract(s) shall be submitted in form andcontent as provided by this section and§ 514.17, in single copy contained in adouble envelope, which contains noother material, as follows:

(i) The outer envelope shall be ad-dressed to: ‘‘Director, Bureau of Tar-iffs, Certification and Licensing, Fed-eral Maritime Commission, Washing-ton, DC 20573.’’

(ii) The inner envelope shall besealed, contain only the executed con-tract, and shall state: ‘‘This EnvelopeContains a Confidential Service Con-tract.’’

(iii) The top of each page of a filedservice contract shall be stamped‘‘Confidential.’’

(2) Notices of: change to contract, con-tract party or rate; availability ofchanged terms to similarly-situated ship-pers; and settlement of account. Thereshall be filed with the Commission,pursuant to the procedures of para-graph (g)(1) of this section, a detailednotice, within 30 days of the occur-rence, of:

(i) The making available of contin-gent or amended essential terms tosimilarly situated shippers under para-graphs (f)(1) or (f)(4) of this section;

(ii) Termination under paragraph(l)(1)(ii) of this section by mutualagreement, breach or default not cov-ered by the service contract;

(iii) The adjustment of accounts, byrerating, liquidated damages, or other-wise under paragraph (l) of this sec-tion;

(iv) Final settlement of any accountadjusted as described in paragraph(g)(2)(iii) of this section; and

(v) Any change to:

(A) The name of a basic contractparty under paragraph (h)(1)(v) of thissection; or

(B) The list of affiliates under para-graph (h)(1)(vi) of this section of anycontract party entitled to receive orauthorized to offer services under thecontract.

(h) Form and content. Every servicecontract shall clearly, legibly and ac-curately set forth in the followingorder:

(1) On the first page, preceding anyother provisions: (i) A unique servicecontract number, and consecutivelynumbered amendment number, if any,bearing the prefix ‘‘SC’’ (see§ 514.17(d)(2));

(ii) The ATFI number (‘‘Tariff #—————’’) of the carrier’s or con-ference’s essential terms publication(See §§ 514.11(b) and 514.17(b));

(iii) A reference to the statement ofessential terms numbers, as follows:

(A) ‘‘ET Number llllll’’ as pro-vided in § 514.17(d)(2)(i); and,

(B) ‘‘FMC File Numberllllll’’as provided in § 514.17(d)(4)(i).

(iv) The ATFI number(s) (‘‘Tariff #—————’’) of the tariff(s) of generalapplicability;

(v) The typewritten legal names andbusiness addresses of the contract par-ties; the typewritten legal names of af-filiates entitled to access the contract;and the typewritten names, titles andaddresses of the representatives sign-ing the contract for the parties. Car-riers and/or conferences which enterinto contracts which include affiliatesmust in each instance either:

(A) list the affiliates’ business ad-dresses; or

(B) certify that this information willbe provided to the Commission upon re-quest within 10 business days of suchrequest (These requirements will applyto previously-filed contracts amendedafter March 13, 1996). However, the re-quirements of this section do not applyto amendments to contracts that havebeen filed in accordance with the re-quirements of this section unless theamendment adds new parties or affili-ates. subsequent references in the con-tract to the contract parties shall beconsistent with the first reference (e.g.,(exact name), ‘‘carriers,’’ ‘‘shipper,’’ or‘‘association,’’ etc.); and


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1 See Exhibit II of this part for an exampleof an abbreviated format service contract.

(vi) Every affiliate of each contractparty named under paragraph (h)(1)(v)of this section entitled to receive orauthorized to offer services under thecontract, except that in the case of acontract entered into by a conferenceor shippers’ association, individualmembers need not be named unless thecontract includes or excludes specificmembers. In the event the list of affili-ates is too lengthy to be included onthe first page, reference shall be madeto the exact location of such informa-tion.

(2) On the second and subsequentpages: (i) The complete terms of thecontract, including:

(A) All essential terms as requiredunder § 514.17, preferably in the orderand format prescribed by § 514.17(d);

(B) Other terms of the contract; and(C) Section 514.7(h)(2)(i)(A) does not

apply to a service contract that incor-porates by reference all of the associ-ated essential terms filing as publishedin ATFI, provided that the parties cer-tify that, other than for those provi-sions set forth in the filed service con-tract, such essential terms filing setsforth the true and complete contract.1

(ii)(A) A description of the shipmentrecords which will be maintained tosupport the contract; and

(B) The address, telephone number,and title of the person who will respondto a request by making shipmentrecords available to the Commissionfor inspection under paragraph (m) ofthis section; and

(iii) The number of free days andcharges for use of carrier or conferenceprovided equipment. The carrier orconference may reference its tariff ofgeneral applicability or equipmentinterchange tariff. In those instances,reference need be made to Tariff Rule21 (§ 514.15(b)(21)) and the applicabletariff number only.

(3) On the signature page: (i) Signa-tures of all necessary contract parties;and

(ii) A certification of shipper statusin accordance with paragraph (e) ofthis section.

(i) [Reserved]

(j) Contract rejection and notice; imple-mentation—(1) Initial filing and notice ofintent to reject—(i) Within 20 days afterthe initial filing of an initial or amend-ed service contract, the Commissionmay reject, or notify the filing party ofthe Commission’s intent to reject, aservice contract and/or statement ofessential terms that does not conformto the form, content and filing require-ments of the 1984 Act or this part. TheCommission will provide an expla-nation of the reasons for such rejectionor intent to reject.

(ii) Except for rejection on theground that the service contract oramendment thereto was not filed with-in ten days of its essential terms, orother major deficiencies, such as notcontaining an essential term, the par-ties will have 20 days after the date ap-pearing on the notice of intent to re-ject to resubmit the contract (in paperform under paragraph (g) of this sec-tion) and/or statement of essentialterms (in electronic form under§ 514.17), modified to satisfy the Com-mission’s concerns.

(2) Rejection. The Commission mayreject an initial or amended contractand/or statement of essential terms if:

(i) The initial or amended servicecontract is not filed within 10 days ofthe electronic filing of its associatedessential terms;

(ii) A mandatory essential term or 30-day me-too notice is missing; or

(iii) Under a notice of rejection pur-suant to paragraph (j)(1) of this sec-tion, if the objectionable contract orstatement of essential terms:

(A) Is not resubmitted within 20 daysof the notice of intent to reject; or

(B) Is resubmitted within 20 days ofthe notice of intent to reject as pro-vided in paragraph (j)(1)(ii) of this sec-tion, but still does not conform to theform, content or filing requirements ofthe Act or this part.

(3) Implementation; prohibition and re-rating. (i) Performance under a servicecontract or amendment thereto maybegin without prior Commission au-thorization on the day its associatedstatement of essential terms is elec-tronically filed, except for rejectionunder paragraph (j)(3)(ii) of this sec-tion;


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(ii) When the filing parties receivenotice that an initial or amended serv-ice contract or statement of essentialterms has been rejected under para-graph (j)(2) of this section:

(A) Further or continued implemen-tation of the service contract is prohib-ited;

(B) All services performed under thecontract shall be rerated in accordancewith the otherwise applicable tariffprovisions for such services with noticeto the shipper or shippers’ associationwithin 30 days of the date of rejection;and

(C) Detailed notice shall be given tothe Commission under paragraph (g)(2)of this section within 30 days of:

(1) The rerating or other account ad-justment resulting from rejectionunder this paragraph; and

(2) Final settlement of the accountadjusted under paragraph(j)((3)(ii)(C)(1) of this section.

(4) Period of availability. The mini-mum 30-day period of availability of es-sential terms required by paragraph(f)(1) of this section shall be suspendedon the date of the notice of intent toreject an initial or amended servicecontract and/or statement of essentialterms under paragraph (j)(1)(i) of thissection, or on the date of rejectionunder paragraphs (j)(1)(i) and (j)(2) ofthis section, whichever occurs first,and a new 30-day period shall com-mence upon the resubmission thereofunder paragraph (j)(1)(ii) of this sec-tion.

(k) Modification, correction and can-cellation of service contract terms.

(1) Modifications. (i) The essentialterms originally set forth in a servicecontract may be amended by mutualagreement of the parties to the con-tract and shall be electronically filedwith the Commission under § 514.17.

(ii) Amended service contracts shallbe filed with the Commission pursuantto paragraph (g) of this section.

(iii) Any shipper or shippers’ associa-tion that has previously entered into aservice contract which is amended pur-suant to this paragraph may elect tocontinue under that contract or adoptthe modified essential terms as anamendment to its contract.

(2) Corrections. Either party to a filedservice contract may request permis-

sion to correct clerical or administra-tive errors in the essential terms of afiled contract. Requests shall be filed,in duplicate, with the Commission’s Of-fice of the Secretary within 45 days ofthe contract’s filing with the Commis-sion and shall include:

(i) A letter of transmittal explainingthe purpose of the submission, and pro-viding specific information to identifythe initial or amended service contractto be corrected.

(ii) A paper copy of the proposed cor-rect essential terms. Corrections shallbe indicated as follows:

(A) Matter being deleted shall bestruck through; and

(B) Matter to be added shall imme-diately follow the language being de-leted and be underscored;

(iii) An affidavit from the filingparty attesting with specificity to thefactual circumstances surrounding theclerical or administrative error, withreference to any supporting docu-mentation;

(iv) Documents supporting the cleri-cal or administrative error; and

(v) A brief statement from the otherparty to the contract concurring in therequest for correction.

(3) Filing and availability of cor-rected materials.

(i) If the request for correction isgranted, the carrier or conference shallfile the corrected contract provisionsunder this section and/or a correctedstatement of essential terms under§ 514.17, using a special case numberunder § 514.9(b)(19). Corrected essentialterms shall be made available to allother shippers or shippers’ associationssimilarly situated for a specified periodof no less than fifteen (15) days fromthe date of the filing of the correctedessential terms. The provisions of para-graphs (f)(1) to (f)(3) of this sectionshall otherwise apply.

(ii) The provisions of paragraph(k)(3)(i) of this section do not apply toclerical or administrative errors thatappear only in a confidentially filedservice contract but not also in the rel-evant essential terms.

(iii) Any shipper or shippers’ associa-tion that has previously entered into aservice contract that is corrected pur-suant to this paragraph may elect to


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continue under that contract with orwithout the corrected essential terms.

(4) Cancellation. See paragraph (1) ofthis section and § 514.4(e)(2).

(l) Accounting adjustments; rerating;notice—(1) Account adjustment; rerat-ing—(i) Events and damages covered bycontract. An account shall be adjustedwhen there is either liability for liq-uidated damages under§ 514.17(d)(7)(vii), or the occurrence ofan event described in § 514.17(d)(7)(viii).

(ii) Mutual termination or shipper fail-ure to meet cargo minimum not covered bythe contract. In the event of a contracttermination which is not provided forin the contract itself and which resultsfrom mutual agreement of the partiesor because the shipper or shippers’ as-sociation has failed to tender the mini-mum quantity required by the con-tract:

(A) Further or continued implemen-tation of the service contract is prohib-ited; and

(B) The cargo previously carriedunder the contract shall be rerated ac-cording to the otherwise applicable tar-iff provisions of the carrier or con-ference in effect at the time of eachshipment.

(2) Notice to contract party. A proposedfinal accounting or rerating under thissection shall be issued to the appro-priate contract party within 60 days oftermination, discontinuance, breach ordefault of the service contract, for:

(i) Liability for liquidated damagesunder § 514.17(d)(7)(vii);

(ii) The occurrence of an event under§ 514.17(d)(7)(viii); or

(iii) Termination, breach or defaultnot covered by the contract.

(3) Notice to Commission. Detailed no-tice of any termination, rerating, and/or account adjustments, as well asfinal settlement of an adjusted ac-count, shall be given to the Commis-sion under paragraph (g)(2) of this sec-tion.

(m) Record keeping and audit—(1)Records retention for five years. Everycommon carrier or conference shallmaintain service contract records in anorganized, readily accessible or retriev-able manner for a period of five yearsfrom the termination of each contract.

(2) [Paragraph (m)(2) is stayed untilfurther notice.] Where maintained. (i)

Service contract records shall be main-tained in the United States, exceptthat service contract records may bemaintained outside the United Statesif the Chairman or Secretary of a con-ference or President or Chief ExecutiveOfficer of a carrier certifies annuallyby January 1, on a form to be suppliedby the Commission, that service con-tract records will be made available asprovided in paragraph (m)(3) of thissection.

(ii) If service contract records are notmade available to the Commission asprovided in paragraph (m)(3) of thissection, the Commission may cancelany carrier’s or conference’s right tomaintain records outside the UnitedStates pursuant to the certificationprocedure of paragraph (m)(2)(i) of thissection.

(3) Production for audit within 30 daysof request. Every common carrier orconference shall, upon written requestof the FMC’s Director, Bureau of En-forcement or any Area Representative,submit requested service contractrecords within 30 days from the date ofthe request.

[57 FR 36271, Aug. 12, 1992, as amended at 57FR 46322, Oct. 8, 1992; 58 FR 27, Jan. 4, 1993;58 FR 5622, Jan. 22, 1993; 61 FR 5309, Feb. 12,1996; 61 FR 51233, Oct. 1, 1996]

EFFECTIVE DATE NOTE: At 57 FR 36271, Aug.12, 1992, the effectiveness of paragraph (m)(2)is stayed until further notice. The agencywill publish a document in the FEDERAL REG-ISTER.

Subpart C—Form, Content andUse of Tariff Data

§ 514.8 Electronic filing.(a) Exemptions. (1) All tariffs required

to be filed by this part shall be filed inthe proper electronic form and mannerunless specifically exempted by theCommission.

(2) A petition for a temporary exemp-tion from the electronic filing require-ments of this part shall be filed withthe Secretary of the Commission under§ 502.69 of this chapter and § 514.21. Un-less a complete exemption from filingtariff material is warranted, the peti-tioner obtaining the exemption willstill be required to file tariffs in paperformat during the period of the exemp-tion.


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(b) User manual. A user manual forelectronic filing (and/or retrieval) maybe purchased from BTCL for a fee setforth in § 514.21. The user manual con-tains the following:

(1) ATFI Fundamentals Guide, whichprovides the basic ATFI concepts andthe general system background to un-derstand the procedures for ATFI use.

(2) ATFI System Handbook, which de-scribes system use characteristics, pro-vides high-level introduction to users’interfaces, i.e., menus and screens, out-lines the information contained in theguides, and is a quick reference sourcefor experienced users.

(3) ATFI Tariff Retrieval Guide, whichprovides complete instructional detailon the retrieval procedures to accessall components of a tariff using theATFI central site system in interactivemode.

(4) ATFI Tariff Filing Guide, whichprovides complete instructional detailon the interactive filing procedures tocreate and maintain all components ofa tariff using the ATFI central site sys-tem in interactive mode.

(5) ATFI ‘‘Batch Filing Guide’’ (seeparagraph (d)(3) of this section), whichpresents information to tariff filerswho prepare new tariff submissions ormodifications in an ‘‘off-line’’ or batchmode, and then submit the batch fil-ings to the Commission either elec-tronically (on-line batch) or by tape(tape or in-bulk batch). Contains theATFI transaction sets for properformatting of batch filings.

(c) Filing; types of filing. In all cases,interactive, on-line batch or bulk(tape) batch, the filing session is proc-essed as soon as possible after submis-sion/receipt of the filing session infor-mation. The ATFI system assigns thefiling date, which is the date an elec-tronically transmitted (interactive oron-line batch) filing session file trans-fer is initiated (successful file transferassumed) or the tape (in-bulk batch) isdelivered to a designated location anddate-time stamped, in local time in theU.S. Eastern Time Zone. After the fil-ing session is processed, a filing-resultsmessage is placed in the filers elec-tronic mailbox on the central site sys-tem.

(1) Interactive filing. Interactive tarifffiling uses a modem and VT-100-type

terminal (or VT-100-type terminalemulation on a personal computer) forATFI access to create tariff filings,verify previous filings, and performsample freight calculations for ver-ification of filed information, usingATFI system screens and pop-up win-dows. The modem must adhere to oneof the following standards: Bell 212(1200 baud); CCITT V.22 (2400 baud); orCCITT V.32 (9600 baud). The filing issubmitted when the filer executes thecommand to ‘‘File all AuthorizedChanges’’ and ATFI’s ‘‘sent’’ responseindicates completion of that filing ses-sion submission.

(2) On-line batch filing. On-line batchfiling is performed by transmission ofprepared tariff material to the ATFIsystem over dial-up lines from the fil-er’s own computer, using publishedATFI transaction set formats and theKERMIT file transfer protocols. Theconclusion of the file transfer sequenceis a positive keyboard entry to initiatethe transfer and a response that indi-cates completion of that submission.The modem requirements are the sameas those in paragraph (c)(1) of this sec-tion. On-line batch filing requires acomputer and software capable of pro-ducing tariff material according to theATFI transaction sets, and transmit-ting via KERMIT protocol. KERMIT ispublic domain software and is availablefrom: KERMIT Distribution, ColumbiaUniversity Center for Computing Ac-tivities, 612 West 115th Street, NewYork, NY 10025.

(3) In-bulk (tape) batch filing. Tapebatch filing is accomplished by phys-ical delivery of prepared tariff materialon magnetic tape, in the publishedATFI transaction set formats, to des-ignated location(s) and accepted/time-stamped by an ATFI attendant, ordate/time stamped and deposited forprocessing. The tape is processed afterreceipt at the ATFI Computer Center.In order that in-bulk (tape) tariff datacan be deemed to be ‘‘filed’’ on a par-ticular date, the tape(s) must be appro-priately delivered (deposited) by 5:00p.m. on that date, if a normal Commis-sion work day; or if the date desired isa non-work day, by 5:00 p.m. on the pre-vious Commission work day. See§ 514.10(a)(2)(iii). In-bulk batch filing re-quires a computer and software capable


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of producing tariff material accordingto the ATFI transaction sets, and re-cording this on 9-track 1600 bpi or 6250bpi tape according to standards out-lined in the ‘‘Batch Filing Guide.’’ Seeparagraph (d)(3) of this section.

(d) General format requirements—(1)Database format. The ATFI database isstructured from tariff data elementsand the tariff objects (see paragraph (h)of this section) formed by logicalgrouping of those elements. For exam-ple, a TLI is a tariff object which con-tains data elements for origin, destina-tion, rate, basis, service, etc. The tariffobjects are relational, with the ‘‘mas-ter’’ record being the organizationrecord for a firm. One or more tariffrecords would be ‘‘related’’ to that or-ganization record. All required and op-tional Tariff Rules, any number ofcommodity descriptions, desired loca-tion groups and inland rate tables arerelated to a specific tariff record. TLIsare related to a specific commodity de-scription and assessorial-charge algo-rithms are related to specific TariffRules, commodity descriptions or TLIs.This relational structure allows inter-active ATFI users to quickly locatespecific tariff objects regardless of thefiling organization, tariff type or trade.Although the data formats are veryprecise and the CRT displays standard,the traditional page format is nolonger in use. See paragraph (l)(1) ofthis section.

(2) Batch transmission. Batch trans-mission of tariff materials to the ATFIcomputer, either on-line or in-bulk, isgoverned by the transaction sets con-tained in the ‘‘Batch Filing Guide.’’Tariff filings not complying with theregulations in this part or the formatsand valid codes contained in the‘‘Batch Filing Guide’’ are subject to re-jection.

(3) ‘‘Batch Filing Guide.’’ The ATFI‘‘Batch Filing Guide’’ is published andupdated in Pike and Fischer, ‘‘ShippingRegulation,’’ SR 329:501, and a copy ofthe Guide is available from BTCL. The‘‘Batch Filing Guide’’ includes the fol-lowing items:

(i) Transaction sets. The transactionset formats also include transactionset segments, data elements, and ref-erence tables.

(ii) Data Element Dictionary (‘‘DED’’)and Valid Reference Table Entries forcertain data elements (e.g., servicecodes, container type codes, currencycodes, etc.), calculation statement defi-nitions, and condition and calculationstatement data fields. For interactivefiling, valid reference table entries canbe accessed on help screens.

(4) Adding new transaction data. Re-quests for major changes or additionsto the transaction set data dictionaryor reference tables shall be submittedin writing to BTCL, with sufficient de-tail and reasons for each proposedchange. A contact person and tele-phone number also should be providedin case of questions.

(i) A proposed major change (otherthan a correction), such as to a trans-action set, will require formal configu-ration management procedures and aminimum of thirty days’ advance no-tice of the change in the FEDERAL REG-ISTER and the ATFI system news, avail-able at system logon, and by other es-tablished Commission communicationsprocedures.

(ii) Minor changes will be enteredinto the system and published as soonas possible. Such minor changes in-clude additions to any of the followingterm and reference lists: Cities; Statesand provinces; Countries; Ports; Con-tainer sizes; Container types; Con-tainer temperatures; Hazard codes; In-land modes; Packaging types; RateBases; Service types; Stuffing mode;Stripping mode; and Currencies. SeeAppendixes A and B to the ATFI BatchFiling Guide.

(e) Hardware and software require-ments. The basic equipment suite nec-essary to access ATFI is a VT-100-typeterminal (including CRT) and amodem. A more sophisticated suite forATFI access would be composed of apersonal computer (PC) (includingCRT), a VT-100 emulation softwarepackage, and a modem. For batch fil-ers, the transmitted filing session mustbe formatted to comply with the trans-action sets. The transmission may bevia the use of KERMIT file transferprotocols after establishing a link foron-line batch filing with the ATFIcentral site computer (see paragraph(c)(2) of this section).


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(f) Password and User ID. (1) SystemIdentifications (‘‘IDs’’) for either filingor retrieval logon and initial passwordassignments are obtained by submit-ting the User Registration Form (ex-hibit 1 to this part), along with theproper fee under § 514.21 and other nec-essary documents prescribed by§ 514.4(d) of this part, to BTCL. A sepa-rate User Registration Form is re-quired for each individual that will ac-cess ATFI.

(2) Logon IDs and passwords may notbe shared with or loaned to or used byany individual other than the individ-ual registrant. The Commission re-serves the right to disable any logon IDthat is shared with, loaned to or usedby parties other than the registrant.

(3) Authority for organizationalmaintenance, filing or retrieval can betransferred by submitting an amendedregistration form requesting the as-signment of a new logon ID and pass-word (see § 514.(4)(d)). The originallogon ID will be canceled when a re-placement logon ID is issued.

(g) Connecting to ATFI; procedures. IfATFI user equipment (hardware andsoftware) is compatible with the con-figurations specified in paragraph (e) ofthis section, and the proper ID andpassword have been obtained underparagraph (f) of this section, on-lineATFI services (interactive retrieval,interactive filing, and on-line batch fil-ing) are available to users registeredunder this section and § 514.21 for therespective services, over commercialtelecommunications using standardasynchronous modems with data ratesup to 9600 baud. The dial-up proceduresare set forth in section 2.3 of the BatchFiling Guide and section 4.2 of theATFI System Handbook, and the ATFIHot Line number is available throughBTCL.

(h) Major menu selections. Proper con-nection will lead the user to the ‘‘ATFILogo Menu,’’ which allows selectionsby any user for ‘‘Tariff Retrieval,’’‘‘Retrieval Practice,’’ ‘‘Retrieval CBI,’’‘‘Mailbox,’’ ‘‘ATFI System News,’’‘‘Change Password,’’ ‘‘Screen Setup,’’and ‘‘Logout.’’ Additionally, a reg-istered filer can access ‘‘Tariff Filing,’’‘‘Filing CBI,’’ and ‘‘Filing Practice.’’Upon the selection of either ‘‘TariffFiling’’ or ‘‘Tariff Retrieval,’’ the user

will be led to the ‘‘Main Menu,’’ whichallows selection (with help screens andwindows) of the following items andsubitems (see also the anti-rebate pol-icy notice in paragraph (j) of this sec-tion). The tariff objects (in addition to *‘‘Commodity Descriptions’’ and *‘‘TLIs’’) are marked with an asterisk(*).

(1) Select Tariff. This selection allowsaccess to a particular tariff which canbe selected by ‘‘Organization Number,’’‘‘Origin’’ and ‘‘Destination,’’ and/or‘‘Organization Trade Name.’’

(2) Rate Inquiry. This selection is usedfor ‘‘Commodities’’ (§ 514.13(a)), ‘‘TLIs’’(§ 514.13(b)), ‘‘Access Dates’’(§ 514.10(a)(1)), and ‘‘Algorithms’’ for as-sessorial charges and calculations(§ 514.10(d)). For essential terms publi-cations, ‘‘Rate Inquiry’’ provides ac-cess to the * ‘‘Essential Terms’’ of serv-ice contracts (§ 514.17).

(3) Other Tariff Components. This se-lection provides another menu for:

(i) * Rules (Tariff Rules). See § 514.15.(ii) Inland Rates. (This provides ac-

cess to * ‘‘Inland Rate Tables.’’) See§ 514.15(b)(1).

(iii) Commodity Index. (This can alsobe accessed from the ‘‘CommoditySearch’’ screen under ‘‘Rate Inquiry.’’)See § 514.13(a)(7).

(iv) * Location Groups. See § 514.10(b).(v) Tariff Definition. This selection

provides another menu for:(A) * Tariff Record. See § 514.11(b).(B) Origin Scope. See § 514.11(c).(C) Destination Scope. See § 514.11(c).(D) Governing Tariffs. See § 514.12.(E) * Organization Record. (This item

is more directly available by filers whohave the authority to edit the ‘‘Organi-zation Record.’’) See § 514.11(a).

(vi) Select Tariff.(vii) New Access Date. See

§ 514.10(a)(1).(4) Utilities.(i) Currency Conversion.(ii) Display Options.(iii) Version Information.(iv) New Tariff Creation (filers only).(v) General Rate Increases (filers only).(vi) Authorize/Review Changes (filers

only).(vii) Filing Utilities (filers only).(5) Exit Tariff System.(6) V1.00 Information.(i) [Reserved]


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(j) Anti-rebate tariff notice. To furtherimplement the United States policyagainst untariffed rebates, as reflectedin § 514.1(c)(1)(iii), the following noticewill appear after logon to the ATFIsystem:

The foreign commerce carriers whose tar-iffs are recorded within this system have apolicy against the payment of any rebate, di-rectly or indirectly by the company or byany officer, employee or agent, which pay-ment would be unlawful under the ShippingAct of 1984. Such policy has been certified tothe Federal Maritime Commission in accord-ance with the Shipping Act of 1984. The ship-ping statutes also prohibit rebates in the do-mestic offshore trade.

(k) Publication; paper copies of tariffmaterials—(1) Publication—(i) Availabil-ity for public inspection. (A) During nor-mal business hours, every carrier, con-ference and terminal operator shallpromptly make available to the publicin paper or electronic form and at areasonable charge (such as for a regu-lar subscription under § 514.15(b)(30)) alltariff material required by this part tobe filed by the carrier, conference ormarine terminal operator, as well asall Commission actions affecting suchtariff material, such as rejections, sus-pensions, etc.

(B) In addition to the requirements ofparagraph (k)(1)(i)(A) of this section,every domestic offshore carrier shallmake available to the public at eachfacility at which it receives freight orpassengers for transportation, or atwhich it employs a general or salesagent, all tariff material governingtransportation to and from the facilityin question.

(ii) Availability of domestic offshoretariff materials to government officials.The governor of any state, common-wealth or territory served by a domes-tic offshore carrier may request a car-rier in writing to furnish to a des-ignated government official or officetariff matter filed by the carrier whichpertains to trades affecting the state,commonwealth or territory in ques-tion. Such request may be for the tariffmatter either to be made available inelectronic format, or to be furnished inno more than two (2) paper copies.Upon receipt of such a request, whichshall include the name, address andfacsimile transmission number(s) of

the designated official or office, thecarrier shall promptly provide to thedesignated official or office the re-quested tariff material and add the of-ficial or office to its list of tariff sub-scribers. No charge shall be made forthe service, but such officials and of-fices shall be treated in the same fash-ion as paid subscribers in all other re-spects. See § 514.15(b)(30). In addition, acopy of any new or amendatory tariffmatter that results in an increasedcost to the shipper and that is filed onless than 30 days’ notice pursuant to§ 514.9(b)(24)(ii), shall be provided to thedesignated Government officials or of-fices, on the same day that such tariffmatter is filed with the Federal Mari-time Commission, by hand delivery orfacsimile transmission of one papercopy, or by electronic transmission, ifavailable.

(iii) Assistance to the public. Personsrequesting to inspect tariff materialsshall, upon reasonable notice, be pro-vided sufficient instruction or assist-ance to allow them to ascertain boththe present and proposed rates,charges, classifications, Tariff Rulesand practices of the tariff owner.

(iv) Tariff Rule containing public accessdetails. Tariff filers shall set forth indetail in Tariff Rule 30 (§ 514.15(b)(30))all costs, conditions and arrangementsfor public inspection of tariff material,including the official tariff when it isnot available for access in the ATFIsystem due to a breakdown or similardisaster.

(v) Official copies. (A) Except as pro-vided in paragraph (k)(1)(v)(B) of thissection, the official version of a tariffwill be the version of any and all tariffobjects published and effective on aspecific date in the ATFI central sitecomputer or the ATFI archives. Indi-vidual tariffs are accessible by reg-istered ATFI interactive retrievers andby the public at terminals in the Com-mission’s Tariff Control Center.

(B) During a major emergency wherethe ATFI host processor is inaccessibledue to an equipment breakdown in theATFI system, the official tariff of atariff owner shall be that maintainedby the tariff owner for public accessduring just such an emergency. The ac-cess to the emergency tariff shall bedescribed in the tariff owner’s Tariff


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Rule 30 (§ 514.15(b)(30)). As soon as theATFI host processor becomes acces-sible, the tariff owner shall ensure thatthere are no discrepancies between theemergency tariff and the ATFI tariff.

(2) Certified paper copies of tariff mate-rial. The Commission will publish paperpages containing filed tariff informa-tion only for special Commission re-quirements, e.g., for requested certifi-cation of tariff data by the CommissionSecretary for official use in court andin other governmental proceedingsunder § 503.43(c) of this chapter and§ 514.21(d). The pages produced for thesepurposes will not reflect the formats oftraditional, page-based tariffs, but willpresent tariff objects in effect or filedto become effective on a specific date.The paper format may reflect theprinting of a computer screen displayor the retrieval and printing of a spe-cific portion of a tariff in the ATFIdatabase or the ATFI database ar-chives.

(l) Certification of batch filing capabil-ity. (1) The Commission will not makeavailable to the public software pack-ages for firms to use in formulatingtariff filings. The Commission has re-leased the ‘‘Batch Filing Guide’’ (withtransaction sets) into the public do-main so that qualified commercialfirms can develop batch filing softwarefor the general market.

(2) Certification. Firms which de-velop batch filing software, by appoint-ment through BTCL and payment ofthe fee set forth in § 514.21, can be cer-tified for the formatting of one or moreof several types of tariff data (e.g., do-mestic, foreign, essential terms, etc.)in ATFI transaction set format andsubmission of that data to the FMCATFI central site computer. The datamay be submitted either via on-linebatch transmission over dial-up tele-communications links using the re-quired file transfer protocols, or inbulk batch via delivery to the ATFIcomputer center of magnetic tape con-taining the tariff data. Certificationwill require submission of tariff filingsessions to ATFI, with an evaluation ofthe actual results of the attempted fil-ings to ensure that the transaction setformats are properly employed andthat the filing results are consistentwith the filer’s expectations.

(m) ATFI screens. The sample screensused to illustrate tariff objects in thispart simulate parts of, but are not theactual, completed ATFI screens used inthe electronic filing and retrieval oftariff data, which may also changewith technical or regulatory develop-ments. Moreover, certain fields appear-ing on the actual ATFI screens may beblocked off from directly entering allor certain data in such fields, becauseof default procedures, developing andcopying data from other, preliminaryscreens, etc. Accordingly, filers mustcarefully follow instructions in orderto properly enter complete and accu-rate tariff data.

(n) Validation of data. Tariff data sub-mitted to ATFI for filing are screenedfor compliance with ATFI conformitychecks, and certain data not automati-cally rejected by the conformitychecks are flagged for Commission ex-aminer review.

(1) Conformity checks. The conformitychecks are syntax checks, validitychecks and associative checks. Forinteractive filing, the ATFI systemwill generally not accept tariff mate-rial which fails conformity checks andthe on-line filer can immediately cor-rect its proposed filing before final sub-mission to the ATFI database. Com-mercially developed batch filing soft-ware can be designed to accomplish thesame functionality. However, all pro-posed filings of tariff materials mustundergo the routine system conformitychecks before they can be received intothe database. Filers will be notified ofautomatic rejections at this stage byelectronic mail, with follow-up letter,if necessary. The conformity checksare:

(i) Syntax Checks. Tariff material willbe checked for file integrity, properdata types, field lengths, and logicalsequence according to the ‘‘Batch Fil-ing Guide’s’’ transaction sets. Data notconforming to the data element formator type in the ‘‘Batch Filing Guide’s’’Data Element Dictionary (‘‘DED’’) andthe sequence requirements of thetransaction sets and segment defini-tions will result in rejections of sub-mitted tariff data to include the pos-sible rejection of an entire filing ifform and format errors are extensiveenough to preclude processing.


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46 CFR Ch. IV (10–1–96 Edition)§ 514.8

(ii) Validity Checks. Certain data ele-ments of filed tariff material will alsobe checked for data validity by typeagainst the DED’s published referencetables, such as for container types andsizes, rate basis, and packaging. See§ 514.13(b).

(iii) Associative Checks. ATFI uses as-sociative checks to identify logicalconformity with established tariff fil-ing rules. The following are some rep-resentative types of associative checksperformed by the ATFI system.

(A) Any new or amended tariff mattermust have:

(1) A valid organization number andname (§ 514.11 (b)(1)(ii) and (b)(2)).

(2) No suspended carrier or objectstatus (See §§ 514.1(c)(1) and 514.19).

(3) Appropriate publication authority(§ 514.11(a)(9)(iii)).

(4) Filing date same as or prior to ef-fective date (§ 514.10(a)).

(5) Valid and appropriate filing/amendment codes (§ 514.9).

(6) Valid and appropriate filing, effec-tive, thru and expiration dates (§§ 514.9and 514.10(a)).

(7) When used, valid special casenumber and filing/amendment code‘‘S,’’ with no other filing/amendmentcodes entered (§ 514.9(b)(19)).

(B) Tariff records (§ 514.11(b)) musthave new (unique to carrier/conference/terminal) tariff number(§ 514.11(b)(1)(ii)).

(C) Commodity description records(§ 514.13(a)) must have:

(1) Complete textual description andunique number.

(2) At least one commodity indexentry.

(D) Tariff line item (TLI) records(§ 514.13(b)) must have a valid:

(1) Commodity description and code(§ 514.13(b)(5)).

(2) TLI code (§ 514.13(b)(6)).(3) Origin and destination

(§ 514.13(b)(15)).(4) Rate basis (§ 514.13(b)(17)).(5) A specified rate (§ 514.13(b)(19)).(E) Tariff Rules (§ 514.15(b)) must

have:(1) All mandatory rules.(2) Number of new Tariff Rule not

previously used in that tariff.(F) New or enlarged scope (certain tar-

iffs) must have effective date 30 days ormore after filing date (§ 514.11(b)(10)).

(G) Essential terms (§ 514.17) musthave:

(1) All mandatory terms (§ 514.17(d)).(2) Availability date for initial serv-

ice contracts and each amendmentthereto at least 30 days greater thanthe filing date (§ 514.17(d)(3)).

(2) Flag for FMC examiner review. InATFI, electronic conformity checkscannot be designed to check and pass/fail every possible rejection situation,such as, for example, conflicting textsor ambiguous language. Other matters,such as filings of controlled carriers,require policy review under the 1984Act. For these reasons, ATFI will auto-matically queue for review by a Com-mission examiner the items which sur-vive the conformity checks describedin paragraph (n)(1) of this section. Thefollowing are representative types ofitems flagged for examiner review:

(i) Any new or amended tariff matter:(A) Of a controlled common carrier.(B) With a filing/amendment code of

‘‘G,’’ ‘‘K,’’ ‘‘M,’’ ‘‘P,’’ ‘‘T,’’ or ‘‘X’’(§ 514.9(b)).

(C) When a special case number ispresent (§ 514.9(b)(19)).

(ii) All tariff record filings and amend-ments (§ 514.11(b)).

(iii) All new commodity descriptions(§ 514.13(a)).

(iv) Tariff line item (TLI) records(§ 514.13(b)):

(A) With any increase and the filing/amendment code does not contain an‘‘A’’ or ‘‘G’’ (§ 514.9 (b)(1) and (b)(7)).

(B) With any non-rate data changes(§ 514.13(b)(17)).

(v) All Tariff Rules (§ 514.15).(vi) Location groups (§§ 514.9(b)(16) and

514.10(b)):(A) Any new group or addition to

group.(B) Any deletion of a group member.(vii) All service contract essential terms

filings. (§ 514.17).(3) Status/rejection codes. The com-

mand line at the bottom of most ATFIscreens provides a ‘‘Status’’ option forretrievers to determine whether anATFI object is accepted, rejected, sus-pended, etc., and the reasons therefor.The DED ‘‘FMC Status/RejectionCode’’ provides numeric, two-digit


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codes for this purposes, e.g., ‘‘01—Notrejected; item accepted.’’

[57 FR 36271, Aug. 12, 1992, as amended at 57FR 44509, Sept. 28, 1992; 57 FR 46324, Oct. 8,1992; 58 FR 28, Jan. 4, 1993; 60 FR 56123, Nov.7, 1995]

§ 514.9 Filing/Amendment codes andrequired notice periods.

(a) General. (1) Under the shippingstatutes, various types of tariff mate-rial require different notice periods(beginning with the filing date) beforethey may become effective. For exam-ple, a new tariff or a rate increase usu-ally requires 30 days’ notice before theeffective date. See § 514.4(a). Paragraph(b) of this section describes the dif-ferent notice periods for the varioustypes of filed tariff items and their cor-responding filing/amendment codes(symbols), which shall be carefullyused by the filer for the purposes ofguiding the user and triggering accu-rate associative checks to ensure theintegrity of the filed tariff material.See § 514.8(n). The ATFI system makesavailable a Help screen which also liststhe uniform symbols.

(2) Multiple symbols. Filed tariff mate-rial frequently can be coded with morethan one symbol. Accordingly, thefield, ‘‘Amendment Type,’’ appearingon most ATFI screens, will usuallyallow up to three different, compatiblesymbols, but see paragraph (b)(19) ofthis section.

(3) Symbol(s) resulting from deletion.When amendments deleting existingtariff matter alter the amount paid bythe shipper/consignee, the effect of thischange shall be indicated by the propercode symbol(s), as required by para-graph (b) of this section.

(4) Restricted use of symbols. The codesor symbols prescribed in paragraph (b)of this section may not be used for anyother purpose, nor shall any symbol beused other than the appropriate sym-bol(s) described in paragraph (b) of thissection.

(5) Essential terms and terminal tariffs.Due to the absence of most of the no-tice requirements otherwise applicableto carrier or conference tariffs, the useof symbols under this section for ter-minal tariffs will be appropriate for thetariff objects employed and filing/maintenance. Symbols for essential

terms of service contracts under § 514.17will usually be ‘‘I’’ for initial filings,‘‘S’’ for corrections, and the appro-priate symbols for amendments to es-sential terms. See § 514.17(d)(5)(i).

(b) Filing/Amendment codes and noticeperiods. For tariffs in foreign and do-mestic offshore commerce, the follow-ing are the notice periods for varioustypes of filings and their correspondingsymbols. To the extent applicable andpermitted by the ATFI system, thesymbols can also be used in other typesof tariff material, such as terminal tar-iffs.

(1) ‘‘A’’ Increase (Foreign commerce andacross-the-board increase which is not ageneral rate increase in domestic offshorecommerce under paragraph (b)(7) of thissection [‘‘G’’]: 30 days’ notice. (i)(A) Ex-cept for a general rate increase in do-mestic offshore commerce, amend-ments which provide for changes inrates, charges, rules, or other tariffprovisions (including fares in domesticoffshore commerce), which constitute acost increase in foreign commerce oran across-the-board increase in domes-tic offshore commerce, shall use thesymbol ‘‘A’’ and be filed to become ef-fective not earlier than 30 days’ afterthe date of filing, unless an exemptionor special permission to become effec-tive on less than said 30 days’ noticehas been granted by the Commission.See paragraph (b)(24)(ii) of this sectionfor domestic offshore increases whichmay be filed on seven workdays’ no-tice.

(B) With the filing of tariff materialunder this paragraph (b)(1)(i), domesticoffshore carriers shall simultaneouslysubmit in paper format any supportingdata required by part 552 of this chap-ter.

(ii) An amendment which deletes aspecific commodity and rate applicablethereto from a tariff, thereby resultingin the application of a higher ‘‘cargon.o.s.’’ or similar general cargo rate, isa rate increase requiring the appro-priate notice period and correspondingsymbol under this section.

(2) [Reserved](3) ‘‘C’’ Change resulting in neither in-

crease nor decrease in rates or charges: ef-fective upon ‘‘short notice,’’ i.e., upon fil-ing in foreign commerce, or on one day’snotice in domestic offshore commerce. (i)


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46 CFR Ch. IV (10–1–96 Edition)§ 514.9

Amendments which result in no changein cost to the shipper, such as anamendment changing only the name oraddress of the filing party, may becomeeffective upon short notice (i.e., uponfiling in foreign commerce, or on oneday’s notice in domestic offshore com-merce) and shall use the symbol ‘‘C;’’except that all changes to controlledcommon carrier tariffs may not be-come effective earlier than 30 daysfrom the date of filing, unless specialpermission has been granted by theCommission under § 514.18, or thechange affects only tariff matterswhich are the subject of a suspensionproceeding under § 514.19 of this part.

(ii) An amendment containing a rateon a specific commodity not previouslynamed in a tariff which results in nochange in cost to the shipper may be-come effective on short notice underthis subparagraph, if:

(A) The tariff contains a ‘‘cargo,n.o.s.’’ or similar general cargo ratewhich would otherwise be applicable tothe specific commodity;

(B) The specific commodity rate isequal to the previously applicable gen-eral cargo rate; and

(C) The common carrier is not a con-trolled common carrier which has notreceived special permission or an ex-emption authorizing the amendment.

(4) [Reserved](5) ‘‘E’’ Expiration: effective upon filing

unless it results in an increase underparagraph (b)(1) ‘‘A’’ or (b)(7) ‘‘G’’ of thissection. When amendments deleting orexpiring existing tariff matter alterthe amount to be paid by the shipper/consignee, the effect of this changeshall be indicated by other symbol(s)under this paragraph (b). Otherwise,expired or deleted matter, such as anamendment completely canceling atariff due to a cessation of all serviceby the carrier between the ports orpoints listed in the canceled tariff,may take effect upon filing and shalluse the symbol ‘‘E.’’

(6) [Reserved](7) ‘‘G’’ General rate increase or de-

crease (domestic offshore commerce): 60days’ notice. Amendments of domesticoffshore tariffs which change rates,fares, charges, Tariff Rules, or othertariff provisions and which constitute ageneral increase or decrease in rates,

shall be filed together with any sup-porting material required by part 552and § 502.67 of this chapter at least 60days prior to their effective date andshall use the symbol ‘‘G.’’

(8) [Reserved](9) ‘‘I’’ New or initial matter: 30 days’

notice—(i)(A) New tariffs and, exceptfor a general increase or decrease in do-mestic offshore commerce, filingswhich provide for new or initial rates,fares, charges, Tariff Rules or othertariff provisions resulting in an in-creased cost to the shipper, shall usethe symbol ‘‘I’’ and be filed to becomeeffective not earlier than 30 days afterthe date of filing, unless an exemptionor special permission to become effec-tive on less than said 30 days’ noticehas been granted by the Commission.

(B)With the filing of tariff materialunder this subparagraph, domestic off-shore carriers shall simultaneouslysubmit in paper format any supportingdata required by part 552 of this chap-ter.

(ii) Initial filings of essential termsof service contracts under § 514.17 ofthis part may not use any symbol otherthan ‘‘I.’’ See paragraph (b)(19)(iii)(A)of this section for corrections to essen-tial terms.

(10) [Reserved](11) ‘‘K’’ Rate or charge filed by a con-

trolled common carrier member of a con-ference under independent action (foreigncommerce): effective upon filing if de-crease.

(i) All changes to controlled commoncarrier tariffs may not become effec-tive earlier than 30 days from the dateof filing unless special permission hasbeen granted by the Commission under§ 514.18, or the change affects only tariffmatters which are the subject of a sus-pension proceeding under § 514.19 of thispart. Such changes shall use the mostappropriate symbol(s) under this sec-tion.

(ii) Conferences may file on behalf oftheir controlled common carrier mem-bers lower independent-action rates onless than 30 days’ notice, using thesymbol ‘‘K,’’ subject to the require-ments of their basic agreements andsubject to such rates being filed at orabove the level set by a member of the


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conference that has not been deter-mined by the Commission to be a con-trolled common carrier subject to sec-tion 9 of the 1984 Act, in the trade in-volved.

(12) [Reserved](13) ‘‘M’’ Transportation of U.S. De-

partment of Defense Cargo. Where a ratefor military cargo is incorporated as aseparate TLI in the commercial tariffof a carrier or conference in foreigncommerce, the filing/amendment code‘‘M’’ shall be used to identify the TLI.Any such military rate may be effec-tive upon filing.

(14)–(15) [Reserved](16) ‘‘P’’ Extension of service to addi-

tional port(s) at rates already in effect forsimilar services at the port(s) being added;or the carrier’s establishment of addi-tional terminal facilities at the port(s) al-ready served, at the same rates as thosecurrently applicable to comparable facili-ties of the carrier at the same port.

(i) In domestic offshore commerce:(A) Amendments extending actual

service to additional ports at rates orfares already in effect for similar serv-ice at the ports being added may takeeffect upon filing and shall use thesymbol ‘‘P;’’ and

(B) Carriers may file to be effectiveupon filing, using the symbol ‘‘P,’’amendments establishing additionalterminal facilities for loading or dis-charging cargo at ports or harbors al-ready served, but only if the rates to becharged at such facilities are the sameas those currently applicable to com-parable facilities of the carrier at thesame port or harbor.

(ii) In foreign commerce:(A) Amendments which provide for

the addition of a port or point to a pre-viously existing origin or destinationfield may become effective upon filingand shall use the symbol ‘‘P.’’

(B) A deletion of a port or point froma previously existing origin or destina-tion field may not be coded with a ‘‘P,’’but shall be coded with other appro-priate symbol(s) under this section.

(17) [Reserved](18) ‘‘R’’ Reduction (Not a general rate

decrease in domestic offshore commerceunder paragraph (b)(7) ‘‘G’’ of this sec-tion)—(i) Domestic offshore commerce(one day’s notice). Except for a generalrate decrease, amendments to domestic

offshore tariffs which provide forchanges in rates, fares, charges, TariffRules or other tariff provisions result-ing in a decrease in cost, shall be filedto become effective not earlier thanone day after the date of filing, usingthe symbol ‘‘R,’’ unless an exemptionor special permission to become effec-tive on less than said one day’s noticehas been granted by the Commission.

(ii) Foreign commerce. Amendmentswhich provide for changes in rates,charges, Tariff Rules, regulations orother tariff provisions resulting in adecrease in cost to the shipper may be-come effective upon filing and shall usethe symbol ‘‘R;’’ except that allchanges to controlled common carriertariffs may not become effective ear-lier than 30 days from the date of fil-ing, unless special permission has beengranted by the Commission under§ 514.18, or the change affects only tariffmatters which are the subject of a sus-pension proceeding under § 514.19 of thispart.

(19) ‘‘S’’ Special case matter: effectiveupon filing unless otherwise directed bythe Commission. Special case numberswill be developed and issued by theCommission and shall be entered bythe filer, along with the symbol ‘‘S.’’Special case matter may not be filedwith other types of amendments, in-cluding special case matter with otherspecial case number(s). When filingspecial case matter, no filing/amend-ments codes other than ‘‘S’’ may beused. Special Case filings may arisefrom the following situations:

(i) Special permission under § 514.18.(ii) Special Docket decision under

§ 502.92 of this chapter.(iii) Correction or resubmission of es-

sential terms.(A) Correction under §§ 514.7(k) and

514.17.(B) Resubmission after notice of in-

tent to reject under § 514.7(j).(iv) Filing to put tariff in order after

rejection or overturning a rejection.(Except with the use of the Thru-dateunder § 514.10(a)(5), the ATFI systemcannot by itself restore material thathas been superseded or rejected, so thefiler is required to make any filings toput its tariff in order, through the spe-cial case procedures, if necessary.)


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(v) Filing of tariff data after suspen-sion under § 514.19.

(vi) Other situations, as directed bythe Commission.

(20) ‘‘T’’ Terminal rates, charges or pro-visions or canal tolls over which the car-rier has no control: effective upon filing.Wherever a tariff includes charges forterminal services, canal tolls, addi-tional charges, or other provisions notunder the control of the common car-rier or conference which merely acts asa collection agent for the charges, andthe agency making such changes doesso without notice to the tariff owner,such provisions may be changed in thecarrier’s or conference’s tariff upon fil-ing and shall use the symbol ‘‘T.’’

(21)–(22) [Reserved](23) ‘‘W’’ for same-day withdrawal of

erroneous data. A filer may withdraw anerroneous filing by the use of the sym-bol ‘‘W’’ with the corrected filing, butonly if the corrected filing is made onthe same date as the erroneous filing.

(24) ‘‘X’’ Exemptions. (i) Controlledcarrier data in U.S. bilateral trades orin trades served exclusively by con-trolled carriers. (See § 514.3(a)(2).) Acontrolled common carrier shall usethe symbol ‘‘X’’ for all tariff materialfiled under the following exempt situa-tions:

(A) As to any particular rate, thecontrolled common carrier’s tariff con-tains an amount set by the duly au-thorized action of a ratemaking body,except that this exemption is inap-plicable to rates established pursuantto an agreement in which all the mem-bers are controlled common carriersnot otherwise excluded by this para-graph;

(B) The controlled common carrier’srates, charges, classifications, TariffRules or regulations govern transpor-tation of cargo between the controllingstate and the United States (includingits districts, territories and posses-sions); or

(C) The controlled common carrieroperates in a trade served exclusivelyby controlled common carriers.

(ii) Domestic offshore tariff increasesnot general or across-the-board increases(7 workdays’ notice). (A) Except for anacross-the-board increase (‘‘A’’) or ageneral rate increase (‘‘G’’) in domesticoffshore commerce, an amendment

which provides for changes in rates,fares, charges, rules, or other tariffprovisions, which constitutes a cost in-crease in domestic offshore commerce,shall use the symbol ‘‘X’’ and be filedto become effective not earlier than 7workdays’ after the date of filing, un-less an exemption or special permissionto become effective on less than said 7workdays’ notice has been granted bythe Commission. See paragraphs (b)(1)and (b)(7) of this section.

(B) With the filing of tariff materialunder this paragraph (b)(24)(ii), domes-tic offshore carriers shall simulta-neously submit in paper format anysupporting data required by part 552 ofthis chapter.

(C) An amendment which deletes aspecific commodity and rate applicablethereto from a tariff, thereby resultingin the application of a higher ‘‘cargon.o.s.’’ or similar general cargo rate, isa rate increase requiring the appro-priate notice period and correspondingsymbol under this section.

(iii) The symbol ‘‘X’’ may be used forother situations involving an exemp-tion or continuing special permission,as directed by the Commission.

(c) Multiple amendments; same or dif-ferent TLI. All filings with adequate no-tice, but with different, successive effec-tive dates (each filing effective afterthe effective date of the previous fil-ing), will be entered into the ATFI sys-tem, whether or not they amend thesame TLI. On the other hand, unless anappropriate thru date (§ 514.10(a)(5)) isemployed to protect the same or latereffective date of an earlier amendmentof the same TLI, only the later (or last)filing, which has an effective date thesame as or earlier than that of the pre-vious filing(s), will be given effect, inwhich case, the previous filing(s) willbe presumed to be erroneous and void.

(d) Supplements. ‘‘Supplements’’ totariffs are prohibited. The ATFI sys-tem will electronically accommodatethe necessary amendment of each TLIselected for general rate changes,through the GRI/GRD utility,assessorials and/or individual TLIchanges. Other matters, previouslyhandled by supplements in traditional,


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page-based tariffs, will be handled pro-cedurally and/or through Tariff Rules,TLI notes, etc.

[57 FR 36271, Aug. 12, 1992, as amended at 57FR 44509, Sept. 28, 1992; 58 FR 28, Jan. 4, 1993;58 FR 28790, May 17, 1993]

§ 514.10 Other items used throughoutATFI.

(a) Control dates and history. Variouscontrol dates are used for tariff mate-rial filed in and/or retrieved from theATFI system. The following simulatedscreen illustrates these dates which arefound on many ATFI screens and con-tains corresponding numbers keyed toexplanatory and regulatory subpara-graphs within this paragraph (in addi-tion to ‘‘Today’’ which is the date ofentry into the system and the screen).For special date provisions applicableto the essential terms of service con-tracts, see §§ 514.17 (d)(3) to (d)(5).

(1)(i) Access date and history. The de-fault date for the Access date is ‘‘To-day’s date.’’ Interactive ATFI, how-ever, allows the user to set a different,desired access date for retrieving ob-jects within the tariff. See§ 514.8(h)(3)(vii). The system will selectonly tariff items that are in effect onthe chosen access date. This allows theuser to examine the tariff as it existedon a particular date in the past, or toexamine rates and Tariff Rules whichhave a future effective date.

(ii) History; ¥Rev; +Rev. Similar tothe functionality of the Access date,the following functions are also avail-able on many ATFI screens:

(A) History. This function displaysthe entire list of modifications to atariff item.

(B) ¥Rev. This function displays theprevious revision (one revision at atime) of the tariff item just prior tothe date displayed in the effective datefield. See paragraph (a)(3) of this sec-tion.

(C) +Rev. This function displays thenext (future) revision of the tariff itemaccording to the date in the effectivedate field. See paragraph (a)(3) of thissection.

(2) Filing date. The filing date, or thedate any tariff or tariff element isprocessed by ATFI, is used to deter-mine the beginning of the advance no-tice period required for various types oftariff material under § 514.9(b). The fil-ing date is determined for each of thethree basic types of filing, as follows:

(i) Interactive. The interactive filingsystem enters a filing date (currentdate) for every tariff object or tariffobject update to be filed. Proposed ob-jects with an outdated filing date willnot be accepted by interactive ATFI.The day of filing is determined by thetime of the ‘‘Commit Authorized Fil-ings to ATFI’’ command at the comple-tion of an interactive filing session andthe ‘‘Sent’’ response from the system,indicating completion of that com-mand at the ATFI central site, in localtime in the U.S. Eastern Time Zone.The function ‘‘FileDate’’ (or ‘‘Default-Dates’’ or ‘‘Defaults’’) enables the userto update its proposed filing date tomatch the date of expected trans-mission of the proposed filing.

(ii) On-line batch. Filers will have afiling date automatically assigned toall tariff objects filed according to thestart time of the file transfer, for filetransfers that are successfully com-pleted, U.S. Eastern Time Zone. On-line batch filers should plan the trans-mission of filing session files to allowfor retransmission(s) starting duringthe same U.S. Eastern Time Zone date,in case the results of the initial trans-mission(s) are not successful.

(iii) In-bulk (tape) batch. Filers willhave a filing date (in local time in theU.S. Eastern Time Zone) assigned toall tariff objects filed according to thedate of delivery of a tape to a des-ignated location. If the date of delivery


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is a normal Commission work day, thefiling date can be that date if the tapeis delivered by 5:00 p.m. If the deliverydate is not a normal Commission workday, or the tape is delivered after 5:00p.m. on a normal work day, the filingdate may not be until the next Com-mission work day.

(3) Effective date. The Effective dateis the date upon which a filed tariff ortariff element is scheduled to go intoeffect by the filer. It determines theend of the advance notice period re-quired for various types of tariff mate-rial under § 514.9(b). Specifically, a tar-iff provision becomes effective at 12:01a.m. on the beginning of the effectivedate. In interactive filing, the Effectivedate can be changed through‘‘FileDate,’’ etc., as described in para-graph (a)(2)(i) of this section.

(4) Expiration date. The Expirationdate is the last day, after which the en-tire tariff or tariff element (e.g., TLI),which is designated to expire, is nolonger in effect. After midnight at theend of this day, the current version ofthe tariff will not include the expiredobject. In the screen example, the en-tire item (e.g., TLI) expires on May 1,1992, leaving no specific rate, whichcould result in an increase to an NOSrate, for which advance notice from thefiling date is required under § 514.9(b).The expired object becomes a part ofthe history objects for the tariff.

(5) ‘‘Thru’’ date. The thru date is thedate after which an amendment to atariff element (e.g., TLI rate) is des-ignated by the filer to be unavailablefor use and the previously effective tar-iff element automatically goes backinto effect. After midnight at the endof the Thru date, the previously effec-tive tariff object will resume its effect.Thru-date tariff objects recognize andmaintain the validity of the unexpiredtariff objects they temporarily super-sede during their time of effectiveness.In the screen example, the effectiveitem reverts to the item prior to effec-tiveness on March 1, 1992, which goesout of existence when expired on May1, 1992. Where an increase requires anadvance notice (e.g., 30 days) under§ 514.9(b), a Thru-date item which is:

(i) A decrease when initially effectiverequires 30 days’ notice from the Filingdate to the Thru date, irrespective of

when it becomes effective (no earlierthan Filing).

(ii) An increase when initially effec-tive requires 30 days’ notice from theFiling Date to the Effective date, butmay revert (Thru date) to the previousitem on or after the Effective date.

(b) Locations and groups. The namesof places entered by filers, such as inorigin and destination scopes and TLIs,shall conform in spelling to, and will bevalidated by, ATFI glossaries.

(1) Names—(i) Point names. ATFI rec-ognizes approximately 250,000 worldplace names.

(ii) Port names. ATFI recognizesocean port names, using spellings con-cordant with the Point Names list,where there is a corresponding pointname.

(2) Location groups. In the primarytariff, or in a governing tariff under§ 514.12(a)(1)(ii), the filer will have theoption to define and create groups ofcities, states, provinces and countries(e.g. location groups) or groups of ports(e.g. port groups), which may be usedin the construction of TLIs and othertariff objects in lieu of specifying par-ticular place names in each tariff item,or creating multiple tariff items whichare identical in all ways except forplace names. A partial screen illustrat-ing the locations within an origin portgroup follows:

(c) Currency. ATFI recognizes a largenumber of foreign currencies for ratesand charges. The complete list ofATFI-recognized currencies is avail-able on-line. Currency conversion ratesare maintained and updated in ATFI on


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a periodic basis; except that these con-version rates are for comparison pur-poses only, not as official conversionrates for booking or billing. See§ 514.8(h)(3)(vi).

(d) Assessorials and algorithms—(1) Re-quirement.—(i) Charges. Assessorial oraccessorial charges, which are to beadded to the basic ocean freight rate tocalculate the total cost to the shipper,shall be clearly shown through mathe-matical formulas or algorithms, as fur-ther explained in the Batch FilingGuide (as well as in the rest of the UserManual), when the applicability of theadditional charge to the basic oceanfreight rate can be accurately deter-mined prior to the carrier’s receipt ofcargo. Examples of the types of asses-sorial charges that would usually notbe determinable prior to cargo ship-ment or preparation of the Bill of Lad-ing are:

(A) Free Time and Demurrage undere.g., a rule for detention or demurrageon carrier equipment.

(B) Diversion of cargo.(C) Blocking, bracing, staking, secur-

ing or protective-covering charges thatcannot be predetermined.

(D) Cargo held by carrier or terminalstorage.

(ii) Precedence There should be noconflict between the algorithm and thetextual description of the assessorial(if any), but, if there is, the algorithmshall take precedence.

(iii) Predeterminable charges. Assesso-rial charges which can be determinedprior to shipment shall be expressed inalgorithm form and may be containedin Tariff Rules of tariffs under § 514.15,as well as in commodity descriptionsand TLIs of tariffs under § 514.13. Algo-rithms, including dummy algorithmsunder paragraph (d)(1)(iv) of this sec-tion, are not accommodated in essen-tial terms publications or statementsof essential terms under § 514.17.

(iv) Non-predeterminable charges; nulllinkage. Assessorial charges, which can-not be determined prior to shipment

and which are not expressed in the nor-mal algorithm form, shall be set forthin full-text format in the same loca-tions as described in paragraph(d)(1)(iii) of this section. In order to ap-prise the retriever that such chargesmay be applicable, however, the filershall link all of these charges to theappropriate item(s) using null linkage(dummy algorithms), i.e., the algo-rithm: WHEN—ALWAYS; THEN—NOTHING.

(2) Overview. Algorithms are ex-pressed as one or more condition andcalculation statement sets. Each setreflects a separate possible conditionwhich may apply, and the means of cal-culating a tariff additional charge forthat condition. A set is composed of agroup of condition statements, fol-lowed by a group of calculation state-ments. The allowable condition state-ments accommodate historically com-mon criteria for the assessment ofocean freight and charges (e.g., ‘‘WhenDestination is ‘New York’,’’ ‘‘WhenContainer Size is ‘40Ft’,’’ etc.). Thesestatements, in turn, accommodate his-torically common factors used in thecomputation of freight and charges(e.g., weight, volume, origin, containersize, etc.).

(3) Calculation statements. The cal-culation statements, listed in theBatch Filing Guide at Appendix B, sec-tion 2, include common arithmeticfunctions, includingaddition [ <X>= <A>+ ],subtraction [ <X>= <A> ¥ ],multiplication [ <X>= <A>X ] anddivision [ <X>= <A> / ], as well asother operations, such asminimum [ <X>=MIN( <A> , ) ] andmaximum [ <X>=MAX( <A> , ) ]functions.

(4) Screen illustration. A partial screen(with pop-up help window), illustratingalgorithms with multiple conditionsets for a commodity description, fol-lows:

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Between the two (condition) sets, thereis an implied ‘‘OR’’ operator (weight‘‘OR’’ measure). This means that eitherone or the other of these condition setsmust be TRUE in order for the assesso-rial to apply. After entering the ratedweight and volume in these conditionsets, the system will process them inthe order in which they appear, evalu-ating whether each is TRUE or FALSE.If TRUE, the assessorial is applicableto the shipment and will be enteredonto the main screen where other po-tentially applicable assessorials (e.g.,in different Tariff Rules) will also beprocessed.

(5) Application. For filing, a toggling(on or off) function provides specificapplication (‘‘linking’’) of an assesso-rial to a commodity or Tariff Rule. Forretrieving, applicable assessorials areadded to the applicable TLI to find theoverall cost for the shipment. Beforeshipment, however, there will be somecondition sets where the values are notknown (e.g., a surcharge for a non-scheduled port where the ship calls in

an emergency and unloads the ship-ment). In these cases, assessorials can-not be accurately applied prior tobooking or sailing. Nonetheless, filersshall use the null linkage or dummy al-gorithm functionality to label and linkassessorials in full text form to otherATFI objects, such as TLIs and com-modities, for the purpose of enablingthe retriever to identify all potentiallyapplicable charges.

[57 FR 36271, Aug. 12, 1992, as amended at 58FR 28, Jan. 4, 1993]

§ 514.11 Organization and tariffrecords; tariff scope.

(a) Organization record. The organiza-tion record is the master record for alltariff information in ATFI for a spe-cific firm. Each firm wishing to filetariffs or essential terms must com-plete and submit an ATFI User Reg-istration Form (exhibit 1 to this part)under §§ 514.4(d) and 514.8(f). Upon Com-mission approval of organization reg-istration in ATFI, a ‘‘shell’’ organiza-tion record, specific to the requestor, isestablished and contains the organiza-tion number, organization name andorganization type. The firm’s author-ized representative can then access thenewly established organization record(see partial screen), using the specialaccess Logon ID and password for orga-nizational record maintenance, to filethe address for the firm’s home office,and complete the affiliations, d/b/a, andpublisher lists as appropriate. To maxi-mize security of the data, maintenance(editing) of the organization recordwill be permitted only through theinteractive mode by the individual inthe firm holding the special accessLOGON ID and password for organiza-tion record maintenance. The followingsimulated screen is indexed to subse-quent, explanatory subparagraph (num-bers) of this paragraph. As with allATFI screens, filers shall enter com-plete and accurate data in all requiredfields.


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(1) Org number and agreement number.The organization and agreement num-bers are generated by the Commissionfor the particular tariff owners. Theagreement number is filled in only ifthe organization is an agreement (con-ference, etc.). The organization numberis also used to verify whether a currentanti-rebate certification has been filedunder § 514.1(c)(1)(iii).

(2) Org name. The organization name(filled in by the FMC) is the officialname of the firm (from the corporatecharter, etc.), often a parent corpora-tion, responsible for filing tariffs, oftenby several affiliates through d/b/anames. The Org Name on the OrgRecord screen is not changeable by thefiler.

(3) The Country of home office is thecountry in which the firm’s head-quarters is located.

(4) Org type would be ocean carrier,conference, NVOCC, etc.,

(5) Controlled. This field is filled in bythe Commission and indicates whetherthe firm is a controlled carrier (‘‘Y’’ or‘‘N’’).

(6) SCAC Code. The Standard CarrierAlpha Code (assigned by the MotorFreight Association) further identifiesthe registered organization.

(7) Home office address information. Asecond line for street address is pro-vided, if necessary, and names of con-tact person(s) shall be entered. Other-wise, the field is self-explanatory.

(8) Command line. While not shown onmost screen illustrations in this part,the items and functions in (below) thecommand line provide instructions foraccessing help screens, tables and otherinformation relevant to the screen. Thedata required in paragraph (a)(9) of thissection are found on separate screenswhich are accessed by highlighting theitem and pressing ‘‘ENTER.’’

(9) (i) Affiliations. The affiliations are:members of a filing conference; partici-pating carriers; or conferences towhich a filing carrier belongs. As withthe organization, itself, both the nameand Commission-assigned number shallbe listed.

(ii) dba’s. The d/b/a (‘‘doing businessas’’) names of affiliated firms are listed


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46 CFR Ch. IV (10–1–96 Edition)§ 514.11

here. Filers shall ensure that the d/b/a’s of all firms filing tariffs under theorganization umbrella are accuratelylisted.

(iii) Publishers. Filers shall list allpublishers used to file and maintainthe organization’s tariffs. Publisherswill be assigned Org Numbers by theFMC which will be entered here.

(b) Tariff Record. The tariff record(s)for a specific organization registered

under paragraph (a) of this sectionshow the characteristics of each tariff.The ATFI system provides an index ofall organization’s tariffs from the datafurnished in the Tariff Record. The fol-lowing simulated screen is indexed tosubsequent, explanatory subparagraphs(numbers) of this paragraph. As withall ATFI screens, filers shall entercomplete and accurate data in all re-quired fields.

(1)(i) Org number is the same is inparagraph (a)(1) of this section. Thisnumber cannot be changed by the filer.

(ii) Tariff # is a 3-digit number as-signed by the organization to distin-guish it from its other tariffs.

(iii) Tariff code uniquely identifies atariff within the ATFI system. It con-sists of either the organization numberplus the user-assigned tariff number(e.g., 999999–001) or the SCAC code (seeparagraph (a)(6) of this section) plusthe user-assigned tariff number, as inthe illustration. The SCAC code takes

precedence when previously providedon the ATFI User Registration Form(Exhibit 1 to Part 514) for entering onthe organization record during creationor amendment.

(2) Org name is the same as in para-graph (a)(2) of this section.

(3) The d/b/a name could be a namedifferent from the organization name,but shall appear in the list of d/b/a’s inthe organization record under para-graph (a)(9)(ii) of this section.


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(4) The Title of the tariff is assignedby the organization and could be asshown in the illustration.

(5) Tariff Type in the illustration is‘‘FC’’ for ‘‘foreign commodity tariff’’ asset forth in the ‘‘Batch Filing Guide’s’’Data Element Dictionary.

(6) Tariff TON is the default (unlesschanged) measurement units through-out the tariff for both weight and vol-ume, as codified in two tables of the‘‘Batch Filing Guide’s’’ Data ElementDictionary.

(7) Monetary units is the default (un-less changed) currency unit to be usedthroughout the tariff. See § 514.10(c).

(8)(i) Address information is the sameas in paragraph (a)(7) of this section,except that more than one address andcontact person can be provided (see‘‘Select Address’’ in Command Line),such as for the tariff publisher, the or-ganization’s tariff filing, billing and/orclaims office, and an agent for serviceof process under paragraph (b)(8)(ii) ofthis section.

(ii) Foreign-domiciled NVOCCs. EveryNVOCC not domiciled in the UnitedStates shall enter in the first addressfield provided in the tariff record thename and address of a person in theUnited States designated under§ 514.15(b)(24)(ii) and § 583.5 of this chap-ter as its legal agent for service of judi-cial and administrative process, includ-ing subpenas.

(9) Command line. See paragraph (a)(8)of this section.

(10) Scope: origin and destination. Thescope of each individual tariff is de-fined in more detail, in Tariff Rule 1 ofthe tariff (514.15(b)(1)), but entered intwo specific location groups (see§ 514.10(b)(5)(ii)) in the auxiliary screenfor the tariff record. All other originand destination ports and points filedin the tariff shall be within the geo-graphic scope of the regions and/orcountries defined in the tariff recordscope.

(i) Origin. The origin scope is a singlelocation group or port group in a tariffencompassing the allowable origins forTLIs defined in that tariff.

(ii) Destination. The destination scopeis a single location group or a portgroup in a tariff encompassing the al-lowable destinations for TLIs definedin that tariff.

(iii) Between tariffs. The filer may in-sert a statement in the scope fieldsthat the rates and charges, etc. are be-tween two location groups, but shallcreate separate origin and destinationpairs, as well as TLIs, for each direc-tion.

(iv) Ports and/or points. A tariff withorigin and destination groups contain-ing only ports will be a port tariff only;no onward through intermodal rateswill be allowed. A tariff with non-portcities, states, or country names in ei-ther the origin or destination groupwill be eligible to contain intermodalrates under § 514.15(b)(1).

§ 514.12 Governing and general ref-erence tariffs.

Where any matter directly affects aTLI, it must be filed in electronic formin the appropriate tariff in the appro-priate place. Thus, a governing tariffmay be a commodity tariff, but onlylocations, inland rate tables and TariffRule level assessorials (and not com-modity descriptions or TLIs) withinsuch a governing tariff may be linkedto govern matter in another (‘‘gov-erned’’) tariff.

(a) Governing tariffs (filed electroni-cally). A filer which files multiple tar-iffs with duplicative and/or commonlyapplicable items, such as Tariff Rulesor inland rate tables, may file a gov-erning tariff which contains, and is re-ferred to in the governed tariff(s) as asource for, location groups, inlandrates and rules-level assessorialcharges, which are applied as if theywere a part of the governed tariff.

(1) Types. Due to ATFI’s ‘‘linkage’’design feature, whereby tariff items atrules level (location groups, inland ratetables and algorithms in rules), can beelectronically referenced and made ap-plicable from one tariff (governing) toanother (governed), a filer may createand use only the following types ofgoverning tariffs, or combinationsthereof, which shall accompany gov-erned tariffs in the ATFI electronicformat:

(i) Rules tariffs, including HazardousCargo Tariff Rules and/or other TariffRules which contain assessorialcharges (see § 514.15(b));

(ii) Location group tariffs (see§ 514.10(b)(2));


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46 CFR Ch. IV (10–1–96 Edition)§ 514.12

(iii) Inland rate table tariffs (see§ 514.15(b)(1));

(iv) Bill of lading tariffs (see§ 514.15(b)(8));

(2) Creation and link to governed tariff.Governing tariffs shall be created byusing ATFI’s standard tariff creationfunction and referenced in each gov-erned tariff, using the ‘‘Governing Tar-iff’’ function under § 514.8(h)(3)(v)(D),where the list of governing tariffs maybe accessed.

(3) Conflicts between governing andgoverned tariffs. A Tariff Rule affectinga TLI or passenger fare may appear inonly one governing tariff. See§ 514.4(b)(3)(iii). Filers shall ensure theexclusive and accurate application oftariff matter contained in governingand governed tariffs to every TLI con-tained in the governed tariff, as illus-trated by the following:

(i) Application of Tariff Rules and asso-ciated assessorial charges. Tariff Rules,and any assessorial charges within theTariff Rules, from both the governedtariff and the governing tariff, willautomatically apply to any shipment,unless the Tariff Rules in either orboth tariffs are ‘‘turned off,’’ using sys-tem-assessorial-charge-applicationflags to disable the charge application,which will indicate the ‘‘Yes’’ or ‘‘No’’status to the users of the central sitesystem. Unless ‘‘turned off,’’ duplica-tive, redundant, or overlapping assesso-rial charges could apply to shipments,because the ATFI central site applica-tions will not deconflict like-type as-sessorial charges. Where the non-rate-affecting Tariff Rules’ texts conflictbetween governing and governed tar-iffs, the governed Tariff Rules will pre-vail.

(ii) Location groups. Location groupsfrom both governed and governing tar-iffs will apply to any shipment, unlessboth tariffs include a group with thesame name. In this case, if not cor-rected or accommodated by the filer,the location group from the governedtariff will take precedence and the gov-erning tariff location group of the samename will be ignored.

(b) General reference tariffs (in paperformat). Certain tariffs, other than gov-erning tariffs described in paragraph(a) of this section, are general ref-erence tariffs and, if they do not con-

tain assessorial charges or other mat-ters affecting the TLI, will continue tobe ‘‘on-file’’ at, or accepted by, BTCL,in paper format. General reference tar-iffs are usually compiled by firms (withFMC-assigned Org Numbers) other thanthose required to file ocean freight tar-iffs, and are allowed to be cross-ref-erenced in the electronically-filed tar-iffs. General reference tariffs include:

(1) Hazardous Cargo Rules Tariffs, notcontaining rates or charges (see§ 514.15(b)(16) and paragraph (a)(1)(i) ofthis section).

(2) Equipment Registers.(3) Equipment Interchange Tariffs. (i)

Equipment interchange tariffs may befiled in electronic format under thispart, or, in paper format, arranged inthe following order:

(A) Title Page.(B) Check Sheet (optional).(C) Table of Contents.(D) Explanation of Symbols, Abbre-

viations and Reference Marks.(E) Tariff Rules.(F) Free Time and Charges—List of

Exceptions to Standard Free Days and/or Charges.

(ii) The Tariff Rules section of theequipment interchange tariff shall in-clude Tariff Rules 1 (Scope,§ 514.15(b)(1)) and 21 (Use of CarrierEquipment, § 514.15(b)(21)). Other un-used mandatory Tariff Rules in§ 514.15(b) shall be noted as ‘‘Not Appli-cable.’’ Equipment interchange tariffsneed not reference carrier or con-ference rate tariffs.

(4) Mileage guide publications.(c) Essential terms of service contracts.

To the extent possible under the spe-cial full-text format for electronic fil-ing of the essential terms of servicecontracts under § 514.17, the followingtypes of governing tariffs are permis-sible:

(1) Essential terms publicationsunder § 514.17(b) (solely for essentialterms documents); and

(2) Tariffs of general applicabilityunder § 514.17(b)(2) (solely for essentialterms publications).

[57 FR 36271, Aug. 12, 1992, as amended at 58FR 28, Jan. 4, 1993; 58 FR 30715, May 27, 1993]


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§ 514.13 Commodities and tariff lineitems (‘‘TLIs’’).

In ATFI, commodities and rates(TLIs) are created separately for sys-tem reasons, but each TLI under para-graph (b) of this section shall be associ-ated with, applicable to, and subsumedunder, an already existing, specificcommodity under paragraph (a) of thissection. There may be many TLIs ap-plicable to one commodity. A differentfour-digit code must be assigned forevery TLI applicable to one particularcommodity as a suffix to the one 10–digit commodity code, created by thetariff owner under paragraph (a) of thissection.

(a) Commodities—(1) Choice of meth-odology. For each separate commodityin a tariff, a separate and distinct 10–digit numeric code shall be used. With-in the system’s transaction-set param-eters, filers may use any commoditycoding they wish but are urged to uti-lize the Harmonized System (‘‘HS’’) forboth the commodity coding and associ-ated terminology (definitions), to themaximum extent possible.

(2) Commodity description—(i) Generalrequirements. (A) Commodity rates shallbe specific and may not apply by impli-cation, or otherwise, to analogous arti-cles.

(B) Commodity descriptions shall in-clude dimensions and weights for cargorated on an ‘‘Each’’ (‘‘EA’’) basis, whenthe packaging is non-standard (e.g.,machinery).

(C) Commodities subject to minimumquantity requirements for carriage orrating shall include a clear statementof such requirements in the commoditydescription and/or TLI to which theyapply. See also Tariff Rule 11(§ 514.15(b)(11)).

(ii) Exclusions; special provisions. Inthe commodity description record, fil-ers shall list commodities excludedfrom the commodity description andprovide notes to articulate any specialprovisions that may apply to the com-modity description, e.g., where a com-modity is subject to time/volume, openor independent-action rates, as de-scribed in paragraph (b)(19) of this sec-tion.

(iii) Assessorial charges applicable tocommodity. Assessorial charges (see§ 514.10(d)) that are specific to a de-

scribed commodity shall be applied tothe commodity by creating the appro-priate algorithm condition sets in thecommodity description record.

(3) Use of the HS code (Optional).—(i)The Harmonized System (‘‘HS’’). In HS,the first two digits identify the chap-ter. The basic commodity chapters arenumbered from ‘‘1’’ to ‘‘97.’’ Each chap-ter is divided into several commodityheadings. The second two HS digitsidentify the heading. Each heading isdivided into several commodity sub-headings. The third two HS digits iden-tify the subheading. Finally, four moredigits (digits 6–10) can be used to fur-ther classify commodities within theHS chapter, heading and subheading.

(ii) Classification and description underthe optional HS code. When using HS,commodities should be classified asspecifically as possible under the HS,in a manner which conforms the prod-uct under substantive, rather than sim-ply textual, criteria. Each commoditydescription should be consistent withthe corresponding HS description forthe particular code or parts of the codeused. When using HS, for the first sixdigits (of the 10-digit ATFI commoditycode), filers should not use other codesnot found in the HS, but should use themodified HS and special ATFI codes de-scribed in this paragraph. The remain-ing system four digits are to be usersupplied, but different commoditiesmay not have the same 10-digit num-ber.

(iii) Six-digit code applicable to com-modity. If the commodity descriptionestablished by the filer coincides withan HS description at the (first) six-digit classification level, the six-digitcode should be used, e.g., ‘‘9503.10—Electric trains.’’

(iv) Six-digit code inapplicable to com-modity. When the commodity descrip-tion established by the filer does notfully coincide with any (first) six-digitdescription in the HS, as provided inparagraph (a)(3)(iii) of this section, andit would be inaccurate to describe itusing a six-digit classification, onlythat part of the HS classification thatis applicable to the filer’s commoditydescription should be used, as follows:


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(A) Four digits. If a commodity can beclassified only by HS chapter and head-ing, then the filer should use the cor-rect chapter and heading digits (digits1–4), and the subheading digits (digits5–6) should be filled in with ‘‘00,’’ e.g.,‘‘9501.00—Wheeled toys, n.o.s.’’

(B) Two digits. If a commodity can beclassified only by the chapter (digits 1–2), then the heading and subheadingdigits (digits 3–6) should be ‘‘00.00,’’e.g., ‘‘9500.00—Toys, n.o.s.’’

(4) Mixed commodities and mixed lots.(i) Except for project rates under para-graph (a)(5) of this section, mixed com-modities (to the extent not accommo-dated by the ‘‘00’’ HS approach de-scribed in paragraph (a)(3)(iv)(B) of thissection) will require the ATFI code‘‘99’’ for the first two digits, whether ornot HS is used, with the next four dig-its (#’s 3–6) available at filers’ option,and will include situations involving:

(A) One specific commodity descriptionwhich includes several commodities classi-fied in more than one HS chapter (or fil-er’s equivalent), e.g., ‘‘Footwear’’ or‘‘Footwear, n.o.s.’’ (various types orparts of which are contained in HSchapters 44, 64, 83, 90 and 98); or

(B) ‘‘Mixed commodities’’ (semble), as acommodity description, which includesseveral commodities, all of which mustbe specifically listed in the descriptionfor the mixed commodities, whether ornot HS is used.

(ii) Whether or not HS is used, wherespecified proportions of certain mixedcommodities or other conditions arerequired to comply with the descrip-tion or to be eligible for a particularTLI associated with the description,the specific proportions and/or condi-tions shall be set forth specifically forthe commodity, and/or in a Tariff Ruleunder § 514.15, as applicable.

(5) Projects (for ‘‘Project Rates’’). A‘‘Project’’ commodity description forproject rates (TLIs) includes materialsand equipment to be employed in theconstruction or development of anamed facility used for a major govern-mental, charitable, manufacturing, re-source exploitation, public utility orpublic service purpose, and also in-cludes disaster relief projects. None ofthe materials or equipment coveredshall be transported for the purpose of

resale or other commercial distribu-tion.

(i) Any ‘‘Project’’ will require theATFI code: ‘‘98’’ for the first two dig-its, with the next four digits (#’s 3–6)available at filer’s option, and the com-modity description record shall in-clude:

(A) An exact description of theproject which demonstrates that it isqualified for a ‘‘project rate’’ underparagraph (a)(5), introductory para-graph, of this section.

(B) A statement that only propri-etary materials actually employed inthe project are eligible for the projectrate. The filer shall provide for the useof a bill of lading clause on all projectrate cargo, which shall state that:

All materials included in this bill of ladingare of a wholly proprietary nature and shallnot be resold or otherwise commercially dis-tributed at destination.

(C) For domestic offshore carriers, astatement that the project rate willcover the carrier’s variable costs andcontribute to its fixed expenses.

(ii) As an alternative to listing a‘‘project’’ as a separate ‘‘commodity’’under paragraph (a)(5)(i) of this sec-tion, project rates can be a stated dis-count for all commodities, a group ofcommodities, or particular TLIs there-under, achieved by algorithms set forthin Tariff Rule 33 (§ 514.15(b)(33)), andproperly applied or linked to each com-modity and/or TLI, as further describedin the ATFI User Guides.

(6) Codes for non-commodity categories.A TLI may be applicable to all com-modities, or all commodities of a class,on which specific commodity descrip-tions are not stated, such as ‘‘cargo,n.o.s.’’ (not otherwise specified), ‘‘gen-eral cargo,’’ ‘‘freight—all kinds,’’ orother identifying name. Because theATFI system requires TLIs to be asso-ciated with and subsumed within acommodity, TLIs not directly involv-ing specific commodities must stillhave a ‘‘commodity code.’’ Therefore,TLI rates, such as for ‘‘FAK’’ and‘‘NOS’’ (entire tariff) will require thefirst two digits of the ‘‘commoditycode’’ to be ‘‘00,’’ with the next fourdigits (#’s 3–6) available at filer’s op-tion.

(7) Commodity index. (i) Each com-modity description created under this


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section shall have at least one similarindex entry which will logically rep-resent the commodity within the al-phabetical index. Filers are encour-aged, however, to create multiple en-tries in the index for articles withequally valid common use names, suchas, ‘‘Sodium Chloride,’’ ‘‘Salt, com-mon,’’ etc.

(ii) If a commodity description in-cludes two or more commodities, eachincluded commodity shall be shown inthe index.

(iii) Items, such as ‘‘mixed commod-ities,’’ ‘‘projects’’ or ‘‘project rates,’’‘‘n.o.s’’ descriptions, and ‘‘FAK,’’ shallbe included in the commodity index.

(b) Tariff Line Items (‘‘TLIs’’)—(1) Gen-eral requirements. (i) All rates andcharges shall be stated in a systematicand straightforward manner. Rates,charges, Tariff Rules, regulations orclassifications may not be duplicative,conflicting or otherwise ambiguouswhen compared with items in the sametariff or in any other tariff to whichthe publishing filer is a party.

(ii) The minimum TLI requisites area valid, accepted commodity descrip-tion to which the TLI is applicable,valid filing and effective dates, originand destination locations or location

groups within the scope of the tariff, arate, rate basis, and service designa-tion.

(2) Illustrative screen. (i) As with allATFI screens, filers shall enter com-plete and accurate data in all requiredfields. The information shown on thesimulated screen is actually entered onthe ‘‘ATFI NEW (Commodity) DE-SCRIPTION CREATION’’ and ‘‘ATFINEW TLI CREATION’’ screens, butwhen completed, is displayed on thefollowing simulated screen, which isindexed to explanatory subparagraphs(numbers) of this paragraph. An aster-isk (*) before an item indicates thatthe particular field is NOT required tobe completed, except when the situa-tion requires it (e.g., special case num-ber, or when an entry is required todistinguish the TLI from another TLIwithin the same commodity).

(ii) Where an optional TLI screenfield (*) is filled in, the TLI will applyonly to shipments that comply withthe condition, e.g., where the packag-ing type is ‘‘Crate (CRT),’’ then only tothe particular commodity as crated.Otherwise, if the packaging code is leftblank, the TLI would apply to all ship-ments of the particular commodity, ir-respective of the package type.


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46 CFR Ch. IV (10–1–96 Edition)§ 514.13

(3) Tariff title. See § 514.11(b)(4).(4) Tariff code. See § 514.11(b)(1)(iii).(5) (Commodity number and descrip-

tion.) The screen’s description cor-responds with the optional HS descrip-tion for the 6-digit HS code used, as de-scribed in paragraph (a)(3)(iii) of thissection.

(6) TLI #. The 14-digit TLI numberconsists of the commodity code (firstten digits), as described in paragraph(a) of this section, plus four unique suf-fix TLI digits, controlled by the ATFIsystem to avoid duplications of, and todifferentiate, TLIs within the samecommodity. For example, the TLI suf-fix of ‘‘0001’’ in the screen is based on a40-foot container; the suffix ‘‘0002’’could be based on a different TLI for a20-foot container.

(7) Filing date (‘‘Filed’’). See§ 514.10(a)(2).

(8) Amendment type. The symbol ‘‘R’’stands for a reduction under§ 514.9(b)(18).

(9) Effective date (‘‘Effective’’). See§ 514.10(a)(3). Since the screen amend-ment is a reduction in foreign com-merce and the filer is not a controlledcarrier, it can take effect upon filing.See § 514.9(b)(18).

(10) Thru (date). See § 514.10(a)(5). Spe-cial or emergency rates may be filed asthru-date TLIs, with explanation of therates in the TLI notes, but only if theTLI notes are explanatory, without af-fecting the level of the rate.

(11) Expiration date (‘‘Expires’’). See§ 514.10(a)(4).

(12) Special case (number). The specialcase number (not applicable in the il-lustration) is assigned by the Commis-sion. See § 514.9(b)(19).

(13) Tariff Line Item Detail. This sec-tion contains the routing, shipment,rate data, etc.

(14) Rates per Container Load. Thisfield echoes the rate basis under para-graph (b)(17) of this section.


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(15) Origin/destination. The origin anddestination of the shipment can be alocation point or group under§ 514.10(b), but must be within the tariffscope under § 514.11(b)(10).

(i) Between TLIs prohibited. Every TLIshall have but one origin and destina-tion and may not purport to show thesame rate in both directions. See§ 514.11(b)(10)(iii).

(ii) U.S. to/from foreign country. In for-eign commerce, the origin may not in-clude any port or point within thesame country in the destination (in-cluding the United States).

(16) ‘‘VIA.’’ ‘‘VIA’’ indicates the portor port group through which the cargowill be carried, outbound from its ori-gin, and/or inbound to its destination,for through transportation. In the il-lustration, the TLI includes all ratesand charges for the inland portion fromAntwerp to Paris and is, therefore, a‘‘through rate.’’ See § 514.15(b)(1).

(17) Rate basis. In the illustration, therate basis is ‘‘PC (Per Container)’’under the ‘‘Batch Filing Guide’s’’ DataElement Dictionary (‘‘DED’’) code.Regulations for other rate bases in-clude:

(i) AV. When an Ad Valorem (‘‘AV’’)TLI is published, the filer shall includein the applicable assessorial charges(in commodity description, TLI or Tar-iff Rule) the algorithm(s) showing theexact method of computing the charge(e.g., shipper’s declaration, invoicevalue, delivered value), and, in TariffRule 12 (§ 514.15(b)(12)), the additionalliability, if any, assumed by the com-mon carrier in consideration therefor.

(ii) EA. TLIs published on an ‘‘Each’’basis shall include specific provisionsin Tariff Rule 2, Application of Rates(§ 514.15(b)(2)), for the applicable sizesand dimensions of general packagingunits (e.g., barrels, crates, cartonsunder paragraph (b)(22) of this section)when the number of these packages isthe basis for the calculation of freight.Commodity descriptions shall includedimensions and weights for cargo ratedon an ‘‘Each’’ (‘‘EA’’) basis, when thepackaging is non-standard (e.g., ma-chinery).

(iii) W. TLI’s published on a weightonly basis shall use the symbol ‘‘W.’’For green salted hides in foreign com-

merce rated on a weight (‘‘W’’) Basis,see Tariff Rule 17 (§ 514.15(b)(17)).

(iv) WM. (A) Whichever is greater.TLIs published on a weight or measure(‘‘WM’’) basis shall be presumed tomean that the basis generating thegreater revenue to the carrier willapply. Filers wishing to publish ratesbased on the lesser revenue of the twoalternate bases shall construct TariffRules and assessorials which reflectthis method of rate computation. Tar-iff Rule 2, Application of Rates(§ 514.15(b)(2)), shall set forth the car-rier’s intentions in detail.

(B) Autos in domestic offshore com-merce. If not rated on an ‘‘EA’’ basisunder paragraph (b)(17)(ii) of this sec-tion, automobiles in domestic offshorecommerce may not be rated on eitherweight or measure, whichever is great-er (lesser), but only on one of thesebases, and, in addition to using the ap-propriate rate basis code (‘‘M’’ or ‘‘W’’),the TLI Notes shall reflect the appro-priate controlling formula, as follows:

(1) Automobiles rated by measure(‘‘M’’). For automobiles rated by meas-ure, the cubic measurement for the fivemost recent model years shall be thatprescribed by the manufacturer of theparticular make and model as shown inTariff Rule 22 (§ 514.15(b)(22));

(i) Automobiles whose measurementsare not shown in Tariff Rule 22 shall beindividually measured by the carrier.This fact shall be noted on the bill oflading; and

(ii) Automobiles which, because of ad-ditional accessories or equipment, varyin dimensions from the standard meas-urements shown in paragraphs(b)(17)(iv)(B)(1), introductory para-graph, and (b)(17)(iv)(B)(1)(i) of this sec-tion, shall be individually measured bythe carrier. This fact shall be noted onthe bill of lading along with the actualvariation (in cubic feet) from thestandard measurements; or

(2) Automobiles rated by weight (‘‘W’’).Each automobile tendered for shipmentshall be individually weighed on thecarrier’s scale. Where the carrier doesnot possess weighing facilities, theshipper shall have the vehicle weighedby a certified weighmaster and furnishthe weighmaster’s signed statement tothe carrier.


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46 CFR Ch. IV (10–1–96 Edition)§ 514.13

(18) (Default) Units (of weight/measure.)The application of all rates and chargesshall be clear and definite and explic-itly stated per cubic foot, cubic meter,kiloton, kilogram or pound, or speci-fied numbers of such units. In the illus-tration, the filer has defaulted its tariffto U.S. dollars. See paragraph (b)(19) ofthis section. The example in the illus-tration also shows default units of ‘‘1KT’’ or ‘‘1000 CBM,’’ which were origi-nally set by the filer in the TariffRecord under § 514.11(b)(6). (The defaultunits are not applicable to the illus-trated TLI, which is on a ‘‘Per Con-tainer’’ basis, but see paragraph (b)(17)of this section.)

(19) Rate(s). The rate is the baseocean freight rate to ship the commod-ity and, in the illustration, is defaultedto U.S. Dollars which can be changedby the filer. See paragraph (b)(18) ofthis section and § 514.10(c). The com-modity description under paragraph (a)of this section, and the TLI, by symbolor TLI note, as appropriate, shall clear-ly identify and explain the followingtypes of rates and the commodities towhich they are applicable:

(i) Time/Volume rates in foreign com-merce. A time/volume rate means a ratepublished in a tariff which is condi-tional upon receipt of a specified aggre-gate volume of cargo or aggregatefreight revenue over a specified periodof time.

(A) Time/volume rates may be offeredby common carriers or conferences andshall be published as TLIs for eachcommodity description where theyapply. The commodity descriptionshall note the availability and terms ofthe time/volume rate(s). (See para-graph (a)(2)(ii) of this section.) TheTLI(s) shall state in the TLI note(s)that the rate is a time/volume rate.

(B) All rates, charges, classifications,Tariff Rules and practices concerningtime/volume rates must be set forth inthe appropriate tariff items, e.g., com-modity description, TLI, and/or TariffRule 26 (§ 514.15(b)(26)), which shallidentify the shipment records that willbe maintained to support the rate.

(C) Once a time/volume rate is ac-cepted by one shipper, it shall remainin effect for the time specified, withoutamendment.

(D) Any shipper utilizing a time/vol-ume rate must give notice to the offer-ing carrier or conference of its inten-tion to use such a rate prior to ten-dering any shipments under such an ar-rangement. Notice may be accom-plished by any effective methoddeemed appropriate by the offering car-rier or conference and set forth in Tar-iff Rule 26, and cross-linked in the com-modity record and/or TLI Notes.

(ii) Open rates in foreign commerce. Anopen rate in foreign commerce means arate on a specified commodity or com-modities over which a conference relin-quishes or suspends its ratemaking au-thority, in whole or in part, therebypermitting each individual ocean com-mon carrier member of the conferenceto fix its own rates on such commodityor commodities. See § 514.15(b)(15).

(A) In the conference tariff, where allTLIs for a given commodity descrip-tion are opened, the description andcommodity index under paragraph (a)of this section shall include the appro-priate notation, i.e., the word ‘‘OPEN.’’Where a conference opens a rate at theTLI level, the TLI shall show the rateas ‘‘0.00’’ and the TLI Note shall con-tain the appropriate ‘‘OPEN’’ notation.Both commodity description and TLINote of ‘‘opened’’ rates (where applica-ble) shall refer to Tariff Rule 15(§ 514.15(b)(15)) which shall clearly de-fine the word ‘‘open,’’ as used in thetariff, and indicate where the rates ofthe individual conference member lineson such items may be found.

(B) Where a conference opens ratespursuant to paragraph (b)(19)(ii)(A) ofthis section, an individual conferencemember may not charge rates on theopen item unless and until the individ-ual member files a proper tariff ratecovering such item, as required by thispart. This may be accomplished by theindividual common carrier member (orits tariff agent) filing a complete tariffpursuant to this part, or by the con-ference (or its tariff agent) filing in aseparate tariff for open rates or in theregular conference tariff each mem-ber’s rates on the opened items, indi-cating the rates which will be chargedby each individual common carrier andthe governing Tariff Rules and provi-sions of the conference tariff applicable


195


to each common carrier. When con-ference members publish their openrates in a separate tariff, such tariffsshall identify the conference tariff inwhich the open-rated condition is re-flected.

(C) Controlled common carriers filingopen rates are subject to the 30-daycontrolled common carrier notice re-quirement of § 514.4(c)(1)(iii), exceptwhen special permission is granted bythe Commission under § 514.18.

(D) Notwithstanding paragraph(b)(19)(ii)(C) of this section, a con-ference may, on less than 30 days’ no-tice, file reduced rates on behalf of con-trolled common carrier members foropen-rated commodities:

(1) At or above the minimum levelset by the conference; or

(2) At or above the level set by amember of the conference that has notbeen determined by the Commission tobe a controlled common carrier subjectto section 9 of the 1984 Act, in the tradeinvolved.

(iii) Independent-action rates in foreigncommerce. Each conference agreementmust provide that any member of theconference may take independent ac-tion on any rate or service item re-quired to be filed in a tariff under sec-tion 8(a) of the 1984 Act upon not morethan 10 calendar days’ notice to theconference and that the conference willinclude the new rate or service item inits tariff for use by that member, effec-tive not later than 10 calendar daysafter receipt of the notice, and by anyother member that notifies the con-ference that it elects to adopt the inde-pendent rate or service item on or afterits effective date, in lieu of the existingconference tariff provision for that rateor service item. For controlled com-mon carriers, see §§ 514.4(d)(4)(iii) and514.9(b)(11).

(20) Service. Under the DED codes, theexample indicates that the service willbe ‘‘PH—Pier/House.’’

(21) (Carrier.) In a conference tariff,the ‘‘Carrier’’ field is filled in with theSCAC code (under § 514.11(a)(6)) of thecarrier, when the TLI is an independ-ent action or open rate of a carriermember of a conference (not applicablein illustration). If not filled in, thefield does not appear on the screen. Seeparagraph (b)(19) of this section.

(22) Packaging code. Under the DED,the illustration’s packaging code is‘‘CRT’’ (Crate). See paragraph (b)(2)(ii)of this section.

(23) Ctr size. The example containersize is 40-foot, using the DED code.

(24) Stow code. Under the DED, the il-lustration’s stow code is ‘‘BS’’ (BottomStowage.)

(25) Ctr type. Under the DED codes,the example indicates that the con-tainer type to be ‘‘PC’’ (Dry).

(26) Stat code. The statistic code is anumeric field which is provided forconvenience to the tariff owner for sta-tistical purposes. The field can handleup to 20 digits. If not filled in, the fielddoes not appear on the screen.

(27) Ctr temperature. Under the DEDcode, the illustration’s container tem-perature requirement is ‘‘NA’’ (Not Ap-plicable.)

(28) TLI notes. The TLI notes containfacts or circumstances which pertainto the particular rate. Additionalrates, conditions which directly affectthe rate, or assessorial charges may notbe contained in the TLI notes, butshall be entered in the appropriateplace, such as in the ‘‘Applicable Asses-sorial Charges’’ under paragraph (b)(29)of this section, or in inland rate tablesunder § 514.15(b)(1).

(29) Assessorial charges. Any matterdirectly affecting the rate, such as as-sessorial charges, shall be entered inthe Assessorial Charges field, as de-scribed in § 514.10(d). The illustrationshows a (Paris) surcharge and twoassessorials found in and linked to Tar-iff Rules.

(30) Haz code. The Hazard code in theexample is ‘‘NHZ’’ for ‘‘non-hazard-ous.’’

(c) TLI calculation. ATFI’s calcula-tion feature adds potentially applicableassessorials in algorithm form andthese and inland rate charges are addedto the basic ocean freight to computethe bottom line (total) freight. For aTLI calculation, as with most otherATFI operator functions, the ATFIuser manual (§ 514.8(b)) is almost indis-pensable. The basic steps for the cal-culation are:

(1) Retrieve a TLI, such as the exam-ple in paragraph (b) of this section.

(2) Exercise the ‘‘Calc’’ option and an‘‘ATFI RATE CALCULATION’’ screen


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46 CFR Ch. IV (10–1–96 Edition)§ 514.15

appears. It is very similar to the ATFITARIFF LINE ITEM DETAIL screen inparagraph (b) of this section, exceptthat the retrieving operator enters theactual shipment data in the appro-priate fields. Once these data are en-

tered and verified, the operator pressesanother ‘‘Calc’’ key and screens similarto the following simulated screens(‘‘ATFI RATING RESULTS,’’ (i) and(ii)) are used to show the ‘‘TotalFreight’’ (‘‘bottom-line freight’’):

(3) The bottom-line rate calculationfacilitates estimation of the totalcharges for the shipment. However,‘‘Total Freight’’ may not always be thefreight paid by the shipper because ofoperator error or the application ofother assessorial charges which werenot in algorithm form because theycould not be determined prior to ship-ment, e.g., detention charges. Suchnon-predeterminable charges, however,would be flagged for the retriever aspotential charges through the dummyalgorithm feature under§ 514.10(d)(1)(iv).

(4) For the basic ocean freight rateand each item that may be added to itto find the overall cost, a proof screenmay be used for verification after thecalculation.


§ 514.15 Tariff Rules.

(a) General. (1) This section requiresthe electronic filing of certain tariffmatter other than the major ATFI ob-jects (TLIs, etc.) addressed elsewherein this part, which in any way affectsthe application of the tariff or is relat-ed to tariff objects, as prescribed inthis part. Matter required to be filed bythis section shall be contained in theATFI tariff, either:

(i) In mandatorily numbered and ti-tled Tariff Rules under paragraph (b) ofthis section; or

(ii) Where the listed mandatory sub-jects of Tariff Rules would not includea specific proposed rule or other tariffmatter of the filer, in optional Tariff


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Rules under paragraph (c) of this sec-tion, with the filer selecting the num-ber (beginning with number 100) andtitle.

(2) Algorithms and text. (i) Where theTariff Rule directly affects a commod-ity or TLI, e.g., by the addition of asurcharge for certain conditions, theassessorial charge calculation/condi-tion statement (and assessorial table,where applicable) shall be set forth inthe Tariff Rule as an algorithm if de-terminable prior to shipment. This al-gorithm shall be electronically linkedto each tariff item to which it applies,as described in § 514.10(d) and in theATFI Batch Filing Guide and ATFITariff Filing Guide.

(ii) Contents of Tariff Rules otherthan algorithms shall be entered infull-text format, be clear, explicit andcomplete, and be linked to appropriateitems through the dummy algorithmfunctionality described in§ 514.10(d)(1)(iv).

(3) Application of rule. Where a TariffRule affects only particular items,each affected item, e.g., commodity de-scription, TLI, etc., shall specificallyrefer and be linked to such rule, as de-scribed in the ATFI Batch Filing andATFI Tariff Filing Guides.

(4) Subrules. Where the subject ortitle of a Tariff Rule permits, obvi-ously-related subrules may be used.

(5) Rules tariffs. Tariff Rules may alsobe contained in separate tariffs, as de-scribed in § 514.12.

(6) Rule Access Window. ATFI’s RuleAccess Window lists by Tariff Rulenumber and title all of the Tariff Rulescontained in a particular tariff.

(b) Mandatory Tariff Rules. SpecificTariff Rules affecting the tariff, and/orother materials required by this partto be included in Tariff Rules, shall becontained in the appropriate TariffRules, as designated by the numbersand titles specified in this paragraph.Where notes to commodity descrip-tions and/or TLIs contain matter thatwould otherwise be normally containedin Tariff Rules, the applicable TariffRule(s) need not duplicate such matterbut may simply indicate that the tariffis structured in this manner. In theevent that a particular title containedin this paragraph does not apply to anymatter affecting the tariff, the rule

number and title shall be entered witha statement that the rule is not appli-cable (‘‘N/A’’). See § 514.12(a)(i). Tariffmatter obviously falling within a par-ticular title may not be contained inanother, less descriptive title and,where a mandatory subject under thisparagraph is not applicable, the tariffmatter shall be filed in an optional ruleunder paragraph (c) of this section,with the appropriate title. MandatoryTariff Rule (and subparagraph) num-bers, titles, content (as also may be re-quired by other sections of this part,cross referenced in this paragraph) areas follows:

(1) Scope. As described in§ 514.11(b)(10), the Tariff Record’s scopeis briefly set forth in location and/orlocation group pairs for origin and des-tination. Tariff Rule 1 shall be consist-ent with the Tariff Record scope, butdescribe it in complete detail, espe-cially for the following types of tariffsor tariff items:

(i) Foreign and domestic (offshore) com-modity tariffs.

(ii) Equipment interchange tariffsunder § 514.12(b)(3)(ii).

(iii) Intermodal services.(A) Tariff Rule 1 shall describe the

modes of intermodal service provided(e.g., rail, truck, etc.).

(B) Tariff Rule 1 shall indicatewhether the tariff TLIs are ‘‘throughrates,’’ which include the rates for allservices on the overall route, are com-bination rates to which rate(s) forother transportation must be added, orboth.

(C) Common carriers and conferenceswhich publish more than one inter-modal rate tariff from, to or betweenthe same points, ports or regions, basedon mode of service, description of com-modities, etc., shall provide in TariffRule 1 of each respective tariff a cross-reference to the FMC number and de-scription of the application of suchother tariff(s).

(D) Tariff Rule 1 shall include a de-scription of any alternate port service,or other substituted service, intendedto be offered. If this service falls withinthe definition of ‘‘transshipment,’’ Tar-iff Rule 1 shall cross-reference TariffRule 13, where transshipment servicesare described.


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(E) TLIs involving intermodal serviceshall include an appropriate statementto this effect in the applicable com-modity description record(s) and/or TLInotes under § 514.13, but all rates andcharges affecting the TLI shall be en-tered in the proper form in the Applica-ble Assessorial Charges section and/orinland rate tables.

(F) If a carrier or conference desiresto provide intermodal transportationto or from named points at combina-tion rates, it shall clearly and accu-rately set forth the applicable chargesin the ATFI ‘‘Inland Rate Tables’’ file.Other tables, similar to inland rate ta-bles in that they result in the additionof amounts to TLIs, such as surcharges(assessorials), may be constructed inalgorithm format under § 514.10(d) andparagraph (a) of this section. The ATFI‘‘Batch Filing Guide’’ and the ATFITariff Filing Guide provide details onthe data creation and filing require-ments for inland rate tables, as well asfor Tariff Rules’ tables.

(2) Application of rates and charges.Tariff Rule 2 shall contain a clear anddefinite statement of:

(i) All services provided to the ship-per and covered by the TLIs, includingthe rate bases set forth in§§ 514.13(b)(17)(ii) and (b)(17)(iv)(A); and

(ii) The extent of any limitation orrestriction, if the application of any ofthe rates, charges, Tariff Rules or regu-lations stated in the tariff is restrictedto any particular port, pier, etc.

(3) Rate applicability rule. Tariff Rule3 shall contain a clear and definitestatement of the time at which tariffchanges become applicable to any par-ticular shipment, including the follow-ing:

(i) In foreign commerce, the tariffrates, Tariff Rules and charges applica-ble to a given shipment must be thosepublished and in effect on the date thecargo is received by the common car-rier or its agent (including originatingcarriers in the case of rates for throughtransportation).

(ii) In domestic offshore commerce, forjoint rates in intermodal transpor-tation, the rate applicable to any par-ticular cargo movement shall be thatrate which is in effect on the day theinitiating carrier takes possession ofthe shipment.

(4) Heavy lift. Tariff Rule 4 shall con-tain a clear and definite statement ofall heavy lift practices and charges.

(5) Extra length. Tariff Rule 5 shallcontain a clear and definite statementof all extra length practices andcharges.

(6) Minimum bill of lading charges. Tar-iff Rule 6 shall contain a clear and defi-nite statement of minimum bill of lad-ing charges and applicability.

(7) Payment of freight charges. TariffRule 7 shall contain a clear and defi-nite statement of:

(i) All requirements for the paymentof freight charges;

(ii) Currency restrictions, if any, andthe basis for determining the rates ofcurrency exchange (see § 514.10(c)); and

(iii) If credit is extended to shippers,the credit terms available and the con-ditions upon which credit is extended.In foreign commerce, when credit ap-plications or agreements are required,specimens of such applications oragreements shall be filed as part of thisTariff Rule.

(8) Bill(s) of lading. Unless a govern-ing bill of lading tariff has been filedunder § 514.12(a)(1)(iv), Tariff Rule 8shall contain all clauses of every appli-cable specimen copy of any bill of lad-ing, contract of affreightment, andother document (except for a servicecontract and its essential terms under§§ 514.7 and 514.17) evidencing the trans-portation agreement between carrierand shipper. Such shipping contractsshall indicate that they are subject tothe terms and conditions of the car-rier’s Federal Maritime Commissiontariffs and may not contain provisionsinconsistent with the Tariff Rules andregulations published in any applicabletariff.

(9) Freight forwarder compensation.Tariff Rule 9 shall contain a clear anddefinite statement of:

(i) In foreign commerce, the rate orrates of compensation to be paid to li-censed ocean freight forwarders onUnited States export shipments in ac-cordance with § 510.23(b) of this chap-ter.

(ii) In domestic offshore commerce, theexact rate or rates, if any, to be paidocean freight forwarders (see also§ 510.23(d) of this chapter).


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(10) Surcharges and arbitraries. TariffRule 10 shall contain algorithms andexplanatory text of surcharges andarbitraries for items not elsewhere pro-vided for in this section. Rates from orto designated ports may be establishedby applying an arbitrary or differentialcharge based upon the rate applicableto a specified ‘‘base port,’’ providedthat any such arbitrary or differentialis clearly defined, set forth as an algo-rithm (with table, if necessary) and isreferenced (linked) in the commoditydescription or TLI affected.

(11) Minimum quantity rates. See also§ 514.13(a)(2)(i)(C). Tariff Rule 11 shallstate:

(i) For foreign commerce:

When two or more TLIs are named for thesame commodity over the same route andunder similar conditions, and the applicationis dependent upon the quantity of the com-modity shipped, the total freight charges as-sessed against the shipment may not exceedthe total charges computed for a largerquantity, if the TLI specifying a requiredminimum quantity (either weight or meas-urement per container or in containers), willbe applicable to the contents of the con-tainer(s), and if the minimum set forth ismet or exceeded. At the shipper’s option, aquantity less than the minimum level maybe freighted at the lower TLI if the weight ormeasurement declared for rating purposes isincreased to the minimum level.

(ii) For domestic offshore commerce:

When two or more TLIs are named for thesame commodity, and the application is de-pendent upon the quantity of the commodityshipped, the charges assessed against thesmaller shipment may not exceed those forany larger quantity.

(12) Ad Valorem Rates. Tariff Rule 12shall contain a clear and definite state-ment of:

(i) The method of computing an advalorem TLI or charge, to the extentnot included elsewhere in the tariff(e.g., in connection with a TLI under§ 514.13(b)(17)(i)); and

(ii) The additional liability, if any,assumed by the tariff owner in consid-eration for the ad valorem rate orcharge.

(13) Transshipment. When trans-shipment services are offered pursuantto an ongoing agreement, Tariff Rule13 shall contain:

(i) The through rate;

(ii) The routings (origin, trans-shipment and destination ports); addi-tional charges, if any (e.g., port arbi-trary and/or additional transshipmentcharges); and participating carriers;and

(iii) A provision substantially as fol-lows:

The Tariff Rules, regulations and rates inthis tariff apply to all transshipment ar-rangements between the publishing carrieror carriers and the participating connectingor feeder carrier. Every participating con-necting or feeder carrier, which is a party totransshipment arrangements, has agreed toobserve the Tariff Rules, regulations, rates,and routings established herein as evidencedby a connecting carrier agreement betweenthe parties.

(14) Co-Loading in foreign commerce.Tariff Rule 14 governs co-loading byNVOCCs in foreign commerce and shallcontain the following provisions:

(i) Filing requirements. (A) If anNVOCC does not tender cargo for co-loading, Tariff Rule 14 shall so indi-cate.

(B) If two or more NVOCCs enter intoan agreement which establishes a car-rier-to-carrier relationship for the co-loading of cargo, then the existence ofsuch agreement shall be noted in TariffRule 14.

(C) If two NVOCCs enter into a co-loading arrangement which results in ashipper-to-carrier relationship, thetendering NVOCC shall describe in Tar-iff Rule 14 its co-loading practices andspecify its responsibility to pay anycharges for the transportation of thecargo. A shipper-to-carrier relationshipshall be presumed to exist where thereceiving NVOCC issues a bill of ladingto the tendering NVOCC for carriage ofthe co-loaded cargo.

(ii) Documentation requirements.NVOCCs which tender cargo to anotherNVOCC for co-loading, whether under ashipper-to-carrier or carrier-to-carrierrelationship, shall annotate each appli-cable bill of lading with the identity ofany other NVOCC to which the ship-ment has been tendered for co-loading.Such annotation shall be shown on theface of the bill of lading in a clear andlegible manner.

(iii) Co-loading rates. No NVOCC mayoffer special co-loading rates for theexclusive use of other NVOCCs. If cargo


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is accepted by an NVOCC from anotherNVOCC which tenders that cargo in thecapacity of a shipper, it must be ratedand carried under tariff provisionswhich are available to all shippers.

(15) Open rates in foreign commerce.Tariff Rule 15 of a conference tariffshall contain a clear and definite state-ment of:

(i) The meaning of the word ‘‘open’’in ‘‘open rates,’’ and the extent towhich conference rates have beenopened pursuant to § 514.13(b)(19)(ii);

(ii) Any restriction or limitation onthe right of participating common car-riers to fix their own rate items, andthe extent to which applicable TariffRules and regulations of the conferencetariff will continue to govern the ratesfiled by each individual line; and

(iii) Where the rates of the individualconference member lines on open-rateditems may be found.

(16) Hazardous cargo. When TLIs forexplosive, inflammable, corrosive, orother dangerous materials are pub-lished (or Tariff Rule 16 does not spe-cifically prohibit carriage of such ma-terials), Tariff Rule 16 shall contain ei-ther:

(i) Tariff Rules governing the car-riage of all types of hazardous cargo; or

(ii) Reference to applicable governingand/or general reference tariffs, as de-scribed in § 514.12.

(17) Green salted hides in foreign com-merce. For foreign commerce, TariffRule 17 shall require that:

(i) The shipping weight for purposesof assessing transportation charges ongreen salted hides shall be either ascale weight or a scale weight minus adeduction which amount and method ofcomputation are specified in the com-modity description record or TLI, asreferenced by § 514.13(b)(17)(iii); and

(ii) The shipper furnish the commoncarrier a weighing certificate or dockreceipt from an inland common carrierfor each shipment of green salted hidesat or before the time the shipment istendered for ocean shipment.

(18) Returned cargo in foreign com-merce. Where the tariff owner offers thereturn shipment of refused, damaged orrejected shipments, or exhibits at tradefairs, shows or expositions, to port oforigin at the TLI assessed on the origi-nal movement, when such TLI is lower

than the prevailing TLI, Tariff Rule 18shall provide that:

(i) The return of shipment(s) be ac-complished within a specific period notto exceed one year;

(ii) The return movement be madeover the line of the same common car-rier performing the original movement,except that in the case of a conferencetariff, return may be made by anymember line when the original ship-ment was carried by a conference mem-ber under the conference tariff; and

(iii) A copy of the original bill of lad-ing showing the rate assessed be sur-rendered to the return common carrier.

(19) Shippers requests in foreign com-merce. Tariff Rule 19 shall contain clearand complete instructions in accord-ance with the effective agreement’sprovisions, stating where and by whatmethod shippers may file their re-quests and complaints and how theymay engage in consultation under sec-tion 5(b)(6) of the 1984 Act, togetherwith a sample of the rate request formif one is used or, in lieu thereof, a de-scription of the information necessaryfor processing the request or com-plaint.

(20) Overcharge claims. Tariff Rule 20shall contain provisions that conformto the following:

(i) No tariff may limit the filing ofovercharge claims with a common car-rier for private settlement to a period(beginning with the accrual of thecause of action) ending in less than:

(A) Three years in foreign commerce;or

(B) Two years in domestic offshorecommerce.

(ii) The acceptance of any overchargeclaim may not be conditioned upon thepayment of a fee or charge.

(iii) No tariff may require that over-charge claims based on alleged errorsin weight, measurement or descriptionof cargo be filed before the cargo hasleft the custody of the common carrier.

(iv) Tariff Rule 20 shall also:(A) Provide that shippers or con-

signees may file claims for the refundof freight overcharges resulting fromerrors in weight, measurement, cargodescription or tariff application; and

(B) Clearly indicate where and bywhat method such claims are to befiled with the common carrier and that


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such claims may also be filed with theFederal Maritime Commission. At aminimum, Tariff Rule 20 shall containthe following provisions:

(1) Claims for freight rate adjustmentsfiled in writing will be acknowledged by thecommon carrier within 20 days of receipt bywritten notice to the claimant of the tariffprovisions actually applied and the claim-ant’s rights under the 1916 Act or 1984 Act.

(2) Claims seeking the refund of freightovercharges may be filed in the form of acomplaint with the Federal Maritime Com-mission, Washington, D.C. 20573, pursuant toeither:

(i) Section 11(g) of the Shipping Act of 1984(46 U.S.C. app. 1710) for foreign commerce,and that such claims must be filed withinthree years of the date the cause of action ac-crued; or

(ii) Section 22 of the Shipping Act, 1916 (46U.S.C. app. 821) for domestic offshore com-merce, and that such claims must be filedwithin two years of the date the cause of ac-tion accrues.

(21) Use of carrier equipment. TariffRule 21 shall contain provisions con-forming to the following regulations:

(i) If a carrier or conference providesequipment to shippers, consignees, orinland carriers, or other persons actingas the agent for the person paying thefreight charges:

(A) A sample equipment interchangeagreement, or the terms and conditionsgoverning the use of said equipment,shall be published in the carrier’s orconference’s Tariff Rule 21. The sampleagreement shall include: the generalterms and conditions affecting cost(e.g., maintenance and repair require-ments, insurance obligations, pickup ordrop off charges and services, such astracing and replenishing fuel or refrig-erant for reefer containers), that gov-ern the use of carrier-provided equip-ment, including cargo containers, trail-ers and chassis. It shall also includethe standard free time allowed and de-tention or similar charges assessed.Standard free time and charges shall beincluded as the last item in the agree-ment or Tariff Rule 21, as applicable,and shall clearly identify the locationand type of equipment to which theyapply.

(B) If a carrier or conference does nothave a sample equipment interchangeagreement, the carrier shall publish itsterms and conditions and standard freetime and charges in its Tariff Rule 21,

as described in paragraph (b)(21)(i)(A)of this section. In foreign commerce,where a foreign government prohibitsthe use of a carrier or conferenceequipment interchange agreement,Tariff Rule 21 shall contain a state-ment to that effect.

(ii) If a carrier or conference has ex-ceptions to the standard free time andcharges, or changes in the terms andconditions which result in changingthe free days and/or charges, the party(inland carrier, consignee, or shipper)to which the exception applies, loca-tion, type of equipment and free daysand charges shall be clearly identifiedfor each exception. The exceptionsshall be arranged in alphabetical orderof the parties to which the exceptionsapply and shall be included in either:

(A) Tariff Rule 21; or(B) A separate equipment inter-

change tariff filed by the carrier orconference in accordance with§ 514.12(b)(3), in which case Tariff Rule21 shall identify the separate equip-ment interchange tariff containing theexceptions. A carrier or conference isnot precluded from publishing a sepa-rate equipment interchange tariff eventhough it does not have exceptions tothe standard free days and charges.

(22) Automobile Rates in domestic off-shore commerce. If TLIs for automobilesare published on a volume basis, as de-scribed in § 514.13(b)(17)(iv)(B)(1), intro-ductory paragraph, Tariff Rule 22 shallcontain:

(i) The cubic measurement for thefive most recent model years pre-scribed by the manufacturer of eachapplicable particular make or model,arranged in table form with referenceto applicable TLIs; and

(ii) A clear and definite description ofall other applicable regulations, if notcontained in the commodity descrip-tion record(s).

(23) Carrier terminal rules and charges.Tariff Rule 23 of carrier and conferencetariffs:

(i) Shall state separately every ter-minal or other charge and discount andservice (including privileges, facilitiesand services) under the control of thecommon carrier or conference which isgranted or allowed to any shipper, con-signee, or passenger, regardless ofwhether the service results in a charge


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46 CFR Ch. IV (10–1–96 Edition)§ 514.15

or discount separately assessed as anaddition to or subtraction from thecarrier’s basic TLI, in which case itshall be set forth as an algorithm, or issimply included within the basic TLI,without differentiation;

(ii) [Reserved](iii) May provide for an amendment,

effective upon filing:(A) Increasing a charge for terminal

services, canal tolls or additionalitems, without the increase being sepa-rately stated on the bill of lading, butonly if such charge is not under thecontrol of the filing common carrier orconference, which merely acts as a col-lection agent for the charge, and theagency making such charge to thecommon carrier or conference in-creases the charge without notice tothe common carrier or conference andis identified in Tariff Rule 23 by nameand appropriate tariff number (see§ 514.9(b)(20)); and

(B) For domestic offshore commerce,establishing additional terminal facili-ties for loading or discharging cargo atports or harbors already served, butonly if the rates to be charged at suchfacilities are the same as those cur-rently applicable to comparable facili-ties of the carrier at the same port orharbor (see § 514.9(b)(16)(i)(B)).

(24) Financial responsibility forNVOCCs in foreign commerce and legalagent for service of process. (i) Everynon-vessel-operating common carrier(‘‘NVOCC’’) shall state in Tariff Rule 24of its tariffs on file with the FederalMaritime Commission that it has fur-nished the Commission proof of finan-cial responsibility in the manner andamount required by 46 CFR 583.4 for thepayment of any judgment for damagesarising from its transportation-relatedactivities under the Shipping Act of1984, order for reparations issued pursu-ant to section 11 of the Shipping Act of1984, or penalty assessed pursuant tosection 13 of the Shipping Act of 1984.In Tariff Rule 24, the NVOCC shallstate the manner of its financial re-sponsibility; whether it is relying inwhole or in part on coverage providedby a group or association of NVOCCs towhich it is a member; the name(s) andaddress(es) of the surety company(ies),insurance company(ies) or guarantor(s)issuing the bond(s), insurance pol-

icy(ies) or guaranty(ies); the bond(s),insurance policy(ies) or guaranty(ies)number(s); and, where applicable, thename and address of the group or asso-ciation of NVOCCs providing full orpartial coverage.

(ii) Every NVOCC in foreign com-merce which is not domiciled in theUnited States shall enter in the firstaddress field provided in each of itsTariff Records under 46 CFR514.11(b)(8)(ii) the name and address ofa person in the United States des-ignated under § 583.5 of this chapter asits legal agent for the service of judi-cial and administrative process, includ-ing subpoenas. Every NVOCC using agroup or association of NVOCCs notdomiciled in the United States for fi-nancial coverage, in whole or in part,pursuant to § 583.4 shall state in its tar-iff the name and address of the groupor association’s resident agent for serv-ice of judicial and administrative proc-ess, including subpoenas. The NVOCCalso shall state in Tariff Rule 24 that,in any instance in which the des-ignated legal agent(s) cannot be servedbecause of death, disability or unavail-ability, the Secretary, Federal Mari-time Commission will be deemed to bethe NVOCC’s legal agent for service ofprocess.

(iii) Service of administrative proc-ess, other than subpenas, may be ef-fected upon the legal agent by mailinga copy of the documents to be servedby certified or registered mail, returnreceipt requested.

(25) Certification of shipper status inforeign commerce. If a common carrieradopts a procedure other than those setforth in § 583.7 (b)(1) or (b)(2) of thischapter, for determining whetherNVOCCs for whom it wishes to trans-port cargo have complied with the tar-iff and bonding requirements of sec-tions 8 and 23 of the 1984 Act, that pro-cedure shall be clearly set forth in Tar-iff Rule 25 of its tariff.

(26) Time/volume rates in foreign com-merce. In connection with time/volumerates offered under § 514.13(b)(19)(i),Tariff Rule 26 of common carrier andconference tariffs in foreign commerceshall clearly and accurately:

(i) State all charges, classifications,rules and practices concerning time/volume rates;


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(ii) Identify the shipment recordswhich will be maintained to supportthe rates;

(iii) Describe the method to be usedfor shippers giving notice of their in-tention to use a time/volume rate priorto tendering any shipment under thetime/volume-rate arrangements; and

(iv) State that:(A) Once a time/volume rate is ac-

cepted by one shipper, it shall remainin effect for the time specified, withoutamendment; and

(B) Shipper notices and shipmentrecords supporting a time/volume ratewill be maintained by any offering car-rier or conference for at least fiveyears after any shipper’s use of a time/volume rate has ended.

(27) Loyalty contracts in foreign com-merce. Where the filer intends to use aloyalty contract in foreign commerce:

(i) Tariff Rule 27 shall contain a sam-ple of every loyalty contract, as de-fined in 46 CFR 514.2, together with reg-ulations which set forth the scope andapplication of the contract system.

(ii) The use of any sample loyaltycontract and applicable regulationsfiled for inclusion in a tariff underparagraph (b)(27) of this section shallbe presumed to be ‘‘in conformity withthe antitrust laws,’’ within the mean-ing of section 10(b)(9) of the 1984 Act, ifsuch contract makes reference to aBusiness Review Letter, issued pursu-ant to 28 CFR 50.6, indicating no objec-tion to the use of that contract.

(28) Definitions. Tariff Rule 28 shallinclude any filer definitions of tech-nical terms which, however, may notbe inconsistent with the 1916 or 1984Acts or this part.

(29) Symbols. Tariff Rule 29 shall in-clude any filer symbols, service codes,etc. and explanations therefor which,however, may not be inconsistent withthe those set forth in this part or the‘‘Batch Filing Guide.’’

(30) Access to tariff information. TariffRule 30 shall contain a clear and com-plete description of all costs, condi-tions and arrangements for public in-spection of tariff material, includingreasonable provisions for access toemergency tariff(s) under§§ 514.8(k)(1)(iv) and (k)(1)(v).

(31) Seasonal discontinuance. (i) TariffRule 31 shall contain announcements of

seasonal discontinuance or restorationof service, which shall be filed on notless than ten days’ notice, except byspecial permission under § 514.18. Suchannouncements shall contain a briefstatement announcing the date of dis-continuance and/or restoration of serv-ice and may include no other tariffmatter. The TLIs associated with serv-ice discontinuance or restoration shallbe amended, expired or filed as applica-ble, and shall meet all criteria for TLIfilings/amendments.

(ii) Tariff Rule 31 of tariffs namingrates, fares or Tariff Rules applicableto all water routes which are closed tonavigation during part of a year shall:

(A) Contain provisions governing thehandling of shipments which may ar-rive at the publishing carrier’s facili-ties after the date service is discon-tinued; and

(B) Expressly provide for the seasonaldiscontinuance provision’s own expira-tion at the close of the navigation sea-son, or include a rule providing for thediscontinuance/restoration of servicebased on the stated navigation season.

(32) [Reserved](33) Project rates. Tariff Rule 33 shall

contain complete descriptions of allproject rates which are stated dis-counts of other TLI’s for given com-modities under § 514.13(a)(5)(ii). For do-mestic offshore carriers, Tariff Rule 33shall also include a statement that allproject rates will cover the carrier’svariable costs and contribute to itsfixed expenses.

(34) Terminal Tariffs. Tariff Rule 34shall contain the full-text portions ofall terminal tariffs filed by marine ter-minal operators (excluding the Organi-zation Record and Tariff Record, whichmust be established under § 514.11).Other, mandatory Tariff Rules underthis section which are designed for car-riers and conferences shall be des-ignated ‘‘Not Applicable’’ or ‘‘NA.’’ Forlogical divisions within the terminaltariff, filers should use subrules, as de-scribed in paragraph (a)(4) of this sec-tion.

(c) Optional Tariff Rules. Tariff Rulesnumbers 100 and up (to be numbered


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consecutively) are available for carrier/conference use.

[57 FR 36271, Aug. 12, 1992, as amended at 58FR 28, Jan. 4, 1993; 58 FR 5622, Jan. 22, 1993;58 FR 28790, May 17, 1993; 60 FR 27230, May 23,1995]


§ 514.17 Essential terms of service con-tracts in foreign commerce.

(a) General. (1) A concise statement ofthe essential terms (ETs) of every ini-tial service contract (which is filed inpaper form under § 514.7) and appro-priate amendments to ETs resultingfrom any amendment of the filed serv-ice contract, shall be filed with theCommission by authorized persons (see§ 514.4(d)(5)) and made available to thegeneral public in electronic tariff for-mat. Unlike most other tariff data,ETs shall be filed largely in full text,with a minimum of databaseformatting (but with certain otherstandardization), as set forth in thissection. Additionally, ETs are not sub-ject to the algorithm or linkage re-quirements of § 514.10(d). Filing andmaintenance of ETs are accomplishedthrough an electronic essential termspublication (ETP) for each carrier orconference filer, which contains ETsfor each of the carrier’s or conference’sservice contracts.

(2) Cross-references—(i) Authority tofile: § 514.4(d)(5).

(ii) Cancellation: § 514.4(e)(2).(iii) Availability of essential terms:

§ 514.7(f).(iv) Rejection of service contracts and/or

essential terms: § 514.7(j).(v) Modification, correction and can-

cellation: § 514.7(k).(vi) Assessorials and algorithms:

§ 514.10(d)(1).(b) Essential terms publication—(1) Cre-

ation and form. The ETP is created andmaintained by the filer as a separatetariff type (‘‘ET’’ for ‘‘ETP’’) with a tar-iff record and number (see § 514.11(b)). Aservice-contract filer, either carrier orconference, may have only one ETP forall its ETs. The ETP may also containmatter of general applicability to allETs contained therein, such as TariffRules. The ATFI system will coordi-nate development of ET search indexesby, for example: ET, service contract

or FMC file number; by commodityname or number; by TLI number; and,by origin or destination of the com-modity.

(2) Reference to/in tariffs of general ap-plicability. The ETP shall:

(i) Contain reference to each carrier’sor conference’s tariff of general appli-cability; and

(ii) Be referenced in each of the car-rier’s or conference’s tariffs of generalapplicability, where required to be filedunder this part.

(c) Statement(s) of essential terms; gen-eral requirements. (1) Essential termsshall be promptly filed by the appro-priate person, in the carrier’s or con-ference’s ETP and in the content andtariff format as provided by this part.(The service contract, in paper form, isrequired to be filed within ten (10) daysof the electronic filing of the essentialterms under § 514.7(g).)

(2) Essential terms may not:(i) Be uncertain, vague or ambiguous;

or(ii) Contain any provision permitting

modification by the parties other thanin full compliance with this part.

(d) Essential terms; specific require-ments—(1) ATFI sample screen illustra-tion. The following ATFI simulatedscreen illustrates the elements re-quired to be contained in essentialterms filings and how they may appearin the ATFI system. The references inbrackets in each line are to the sub-paragraphs of this paragraph which ex-plain the requirements for the fieldsand the data contained therein. Seeparagraph (b)(1) of this section for pro-visions regarding the essential termspublication. On the screen, data abovethe double line, i.e., down through‘‘Contract Termination,’’ shall be en-tered in database format in the specialfields provided; data beginning withMandatory Term No. 3 (‘‘Commod-ities’’) shall be entered in ‘‘full-text’’format without the application of algo-rithms under § 514.10(d). However, themandatory ETs (Nos. 1 to 10) shall bearthe appropriate term number and exactmandatory term title, as set forth inthis paragraph (and the screen). If themandatory term does not apply (e.g.,No. 7 or No. 8), the filer shall also enterthe symbol ‘‘NA.’’


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[§ 514.17(d)(1)] ATFI ESSENTIAL TERMS SEARCH

JKL Line Essential Terms Publication (XYZ 004) ........... [1]ET Num: 681 ........................................ Personal Computers from Taiwan ................................... [2]SC Num: 765 ....................................... Amendment Num: 3—Available until: 31 Jan 1992 ......... [3]FMC File Num: 123456 ....................... Contract Effective: 01 Dec 1992 ...................................... [4]Amendment Type: C ............................ Special Case: 123456—Contract Expiration: 15 Jan

1993.[5]

Filing Date: 01 Jan 1992 ..................... Contract Termination: 15 Jan 1993 ................................. [6]

Term (Amend) List of essential terms titles [7]

1 ( 0) Origin ........................................................................................................................ [i]2 ( 0) Destination ................................................................................................................ [ii]3 ( 0) Commodities ............................................................................................................. [iii]4 ( 1) Minimum Quantity .................................................................................................... [iv]4 A( 0) Minimum Quantity in 20ft containers ....................................................................... [A]4 B( 3) Minimum Quantity in 40ft containers ....................................................................... [B]5 ( 0) Service Commitments .............................................................................................. [v]6 ( 0) Contract Rates or Rate Schedules(s) ...................................................................... [vi]7 ( 2) Liquidated Damages for Non-Performance (if any) ................................................. [vii]8 ( 0) Later Events Causing Deviation From ET (if any) ................................................... [viii]9 ( 0) Duration of the Contract (e.g., ‘‘46 days from 01 Dec. 1992 to 15 Jan. 1993’’) ..... [ix]10 ( 0) Assessorials ............................................................................................................. [x]100 ( 0) (Title and text—Optional) ......................................................................................... [8]101 ( 0) (Title and text—Optional) ......................................................................................... [8][999 zzz (999) Maximum term and amendment values] ..................................................................

(2)(i) ET Num (statement of essentialterms number). The ‘‘ET Num’’ is de-fined by the filer and shall be enteredin the appropriate field. See § 514.7(h).

(ii) ET Heading. The filer’s title of theET document (e.g., ‘‘Personal Comput-ers from Taiwan’’) is entered here andwill appear in the ETP index to the in-cluded ETs.

(3)(i) SC NUM (service contract num-ber). The ‘‘SC Num’’ is defined by thefiler and shall be entered in the appro-priate field. See § 514.7(h).

(ii) Amendment Num. Where feasible,ETs should be amended by amendingonly the affected specific term(s) orsubterms, mandatory or optional. Eachtime any part of an ET is amended, thefiler shall assign a consecutive ETamendment number (up to three dig-its), beginning with the number ‘‘1.’’(The amendment number field must be‘‘0’’ or void for the initial ET filing.)Each time any part of the ET is amend-ed, the ET ‘‘Filing Date’’ will be thedate of filing of the amendment andthe ‘‘Available Until Date’’ will be 30days from the filing date, but the filercan enter a later date, making theavailability period longer. See correc-tion provisions under § 514.7(k) andparagraph (d)(5)(ii) of this section.

(iii) Available until. The period ofavailability of the essential terms tosimilarly situated shippers shall be no

less than thirty (30) days, i.e., from the‘‘Filing Date’’ (paragraph (d)(6)(i) ofthis section and § 514.10(a)(2)) of the ini-tial filing or the latest amendment, tothe ‘‘Available until’’ date (automati-cally defaulted to 30 days from the Fil-ing Date by the interactive ATFI sys-tem, but the filer can enter a laterdate, making the availability periodlonger).

(4)(i) FMC File Num. The FMC FileNumbers will be system assigned asinitial ET filings are received/proc-essed. The FMC File Numbers will beassigned sequentially and will start ata number designated by FMC at pro-duction start. The FMC File Numberwill be provided to filers in the ac-knowledge message (EMail) for filingsso that they can put the number in therelated service contract when it is filedin paper form. See § 514.7(h)(1)(iii)(B).This procedure will facilitate FMClinkage of the ET to its related servicecontract.

(ii) Contract effective. In addition tothe period of availability of essentialterms to similarly situated shippers,the service contract itself must havean effective date and an expirationdate (see paragraph (d)(5)(iii) of thissection and §§ 514.10 (a)(3) and (a)(4)),governing the duration of the contractbetween the original signatory parties.The duration must also be set forth in


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46 CFR Ch. IV (10–1–96 Edition)§ 514.17

mandatory essential term No. 9, wherethe duration of the contract shall bestated as a specific fixed time period,with a beginning date (effective date)and an ending date (expiration date).

(5)(i) Amendment type. All ATFIamendment codes under § 514.9, except‘‘G’’ and ‘‘S’’ (§§ 514.9(b)(7) and514.9(b)(19)), may be used in any com-bination, with up to three amendmentcodes for amendments to ETs. No no-tice period is required for amendmentsto ETs, except that amendments toETs require a new ‘‘Available until’’date, which must be at least 30 daysfrom the filing date. For the amend-ment code ‘‘S,’’ see paragraph (d)(5)(ii)of this section.

(ii) Special Case symbol and number.The ‘‘S’’ amendment code (for specialcase under § 514.9(b)(19)(iii)) must beused singly, and in conjunction with avalidated special case number for cor-rections to ETs. See correction provi-sions under § 514.7(k).

(iii) Contract expiration. See para-graph (d)(4)(ii) of this section.

(6)(i) Filing date. The filing date isautomatically set by the system when-ever an ET or amendment thereto isfiled. See ‘‘Available until’’ in para-graph (d)(3)(iii) of this section.

(ii) Contract termination date. A state-ment of essential terms may not becanceled until after all of its associ-ated service contracts, including anyrenewal or extension, have expiredunder the terms of the contract, orhave been terminated for reasons notspecifically set forth in the contract.See §§ 514.4(e)(2) and 514.7(l)(1)(ii). Thecontract termination date would,therefore, be the same as the contractexpiration date under paragraph(d)(5)(iii) of this section, unless termi-nated sooner, in which case the filerwould enter the earlier date when thetermination event occurred.

(7) Terms and subterms. Mandatory es-sential terms Nos. 1 to 10 shall addressthe subjects and bear the terms’ titlesfor the respective numbers exactly asprovided in this section. If a subject isnot included, such as No. 7 or No. 8, thenumber must be listed with the appro-priate title and the designation ‘‘NA.’’All essential terms, mandatory and op-tional, may be subdivided intosubterms (as illustrated for mandatory

term No. 4) to facilitate retrieval andamendment. The mandatory terms areas follows:

(i) Origin (No. 1). ‘‘Origin’’ includesthe origin port range(s) in the case ofport-to-port movements, and the origingeographic area(s) in the case ofthrough intermodal movements, exceptthat, in service contracts, the originand destination of cargo moving underthe contract need not be stated in theform of ‘‘port ranges’’ or ‘‘geographicareas,’’ but shall reflect the actual lo-cations agreed to by the contract par-ties. See § 514.10(b). Origin point andport locations will be validated againstthe ATFI Locations database. The vali-dated names will be ‘‘inserted’’ by thesystem in Mandatory Term #1. TheMandatory Term may not contain text,but if the filer wishes to use full text toclarify or expand on the point/port en-tries in Term 1, full text may be usedin subterms.

(ii) Destination (No. 2). ‘‘Destination’’includes the destination port range(s)in the case of port-to-port movements,and the destination geographic area(s)in the case of through intermodalmovements, except that, in servicecontracts, the origin and destination ofcargo moving under the contract neednot be stated in the form of ‘‘portranges’’ or ‘‘geographic areas,’’ butshall reflect the actual locationsagreed to by the contract parties. See§ 514.10(b). Destination point and portlocations will be validated against theATFI Locations database. The vali-dated names will be ‘‘inserted’’ by thesystem in Mandatory Term #2. TheMandatory Term may not contain text,but if the filer wishes to use full text toclarify or expand on the point/port en-tries in Term 2, full text may be usedin subterms.

(iii) Commodities (No. 3). Mandatoryterm No. 3 shall include commoditiescovered by the service contract, butthese commodities may not be enteredas described in § 514.13(a), i.e., commod-ities cannot be entered in data-elementformat, but the full-text format mayincorporate the same elements of infor-mation, as desired. See § 514.7(c) for ex-empt commodities. For each commod-ity filed in this term, a separateformatted commodity index entry isrequired.


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(iv) Minimum quantity (No. 4). Manda-tory term No. 4 shall address the mini-mum quantity or volume of cargo and/or amount of freight revenue necessaryto obtain the rate or rate schedule(s),except that the minimum quantity ofcargo committed by the shipper maynot be expressed as a fixed percentageof the shipper’s cargo.

(A) Subterm. Example: Minimumquantity in 20FT Containers.

(B) Subterm. Example: Minimumquantity in 40FT Containers.

(v) Service commitments (No. 5). Man-datory term No. 5 shall address theservice commitments of the carrier,conference or specific members of aconference, such as assured space, tran-sit time, port rotation or similar serv-ice features.

(vi) Contract rates or rate schedule(s)(No. 6). Mandatory term No. 6 shallcontain the contract rates or rateschedules, including any additional orother charges (i.e., general rate in-creases, surcharges, terminal handlingcharges, etc.) that apply, and any andall conditions and terms of service oroperation or concessions which in anyway affect such rates or charges; ex-cept that a contract may not permitthe contract rate to be changed tomeet a rate offer of another carrier orconference not published in a tariff orset forth in a service contract on filewith the Commission.

(vii) Liquidated damages for non-per-formance (if any) (No. 7). Mandatoryterm No. 7 shall include liquidateddamages for non-performance. See§ 514.7(1).

(viii) Later events causing deviationfrom ET (if any) (No. 8). Where a con-tract clause provides that there can bea deviation from an original, essentialterm of a service contract, based uponany stated event occurring subsequentto the execution of the contract, man-datory term No. 8 shall include a clearand specific description of the event,the existence or occurrence of whichshall be readily verifiable and objec-tively measurable. See § 514.7(1). Thisrequirement applies to, inter alia, thefollowing types of situations:

(A) Retroactive rate adjustmentsbased upon experienced costs;

(B) Reductions in the quantity ofcargo or amount of revenues requiredunder the contract;

(C) Failure to meet a volume require-ment during the contract duration, inwhich case the contract shall set fortha rate, charge, or rate basis which willbe applied.

(D) Options for renewal or extensionof the contract duration with or with-out any change in the contract rate orrate schedule;

(E) Discontinuance of the contract;(F) Assignment of the contract; and(G) Any other deviation from any

original essential term of the contract.(ix) Duration of the Contract (No. 9).

The duration of the contract shall bestated as a specific fixed time period,with a beginning date (effective date)and an ending date (expiration date).See paragraph (d)(4)(ii) and (d)(5)(iii) ofthis section.

(x) Assessorials (No. 10). MandatoryTerm 10 shall contain all ETassessorials, preferably using a sepa-rate subterm for each type of assesso-rial. For every assessorial, the filershall set forth either:

(A) The full assessorial; or(B) A complete cross-reference to the

place(s) where it may be found.(8) Optional terms. Any essential term

of a service contract not otherwise spe-cifically provided for in this sectionshall be entered after the mandatoryterms and in numerical order, begin-ning with No. 100.

[57 FR 36271, Aug. 12, 1992, as amended at 58FR 28, Jan. 4, 1993; 61 FR 35686, July 8, 1996]

§ 514.18 Special permission.(a) General. Section 8(d) of the 1984

Act and section 2 of the 1933 Act au-thorize the Commission, in its discre-tion and for good cause shown, to per-mit increases or decreases in rates, orthe issuance of new or initial rates, onless than statutory notice under § 514.9.Section 9(c) of the 1984 Act authorizesthe Commission to permit a controlledcommon carrier’s rates, charges, classi-fications, rules or regulations to be-come effective on less than 30 days’ no-tice. The Commission may also in itsdiscretion and for good cause shown,permit departures from the require-ments of this part. The Commission


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will grant such permission only incases where merit is demonstrated.

(b) Clerical errors. Typographical and/or clerical errors constitute good causefor the exercise of special permissionauthority but every application basedthereon must plainly specify the errorand present clear evidence of its exist-ence, together with a full statement ofthe attending circumstances, and shallbe submitted with reasonable prompt-ness after filing the defective tariff ma-terial. For correction of clerical errorsin the essential terms of service con-tracts, see § 514.7(k)(2).

(c) Application—(1) By authorized offi-cial; filing fee. Application for specialpermission to establish rate increasesor decreases on less than statutory no-tice or for waiver of the provisions ofthis part, shall be made by the commoncarrier, conference or agent that holdsauthorization under § 514.4(d) to file thetariff matter. Every such applicationshall be submitted to BTCL and be ac-companied by the filing fee provided in§ 514.21.

(2) Transmittal. Application for spe-cial permission shall be made only bycable, telegram or letter, except thatin emergency situations, applicationmay be made by telephone if the tele-phone communication is promptly fol-lowed by a cable, telex or letter andthe filing fee.

(3) Content. Except as provided in§ 514.7(k)(2) for correction of essentialterms, applications for special permis-sion shall contain the following infor-mation:

(i) The organization name, numberand d/b/a of the conference or carrierunder § 514.11(b);

(ii) The tariff number, title and tariffcode under § 514.11(b); and

(iii) The rate, commodity, TariffRules, etc. (related to the application),and the special circumstances whichthe applicant believes constitute goodcause to depart from the requirementsof this part or to warrant a tariffchange upon less than the statutorynotice period.

(d) Implementation. (1) If all condi-tions are complied with and if the au-thority granted by special permissionis used, it shall be used in its entiretyand in the manner set forth by theCommission, including the prompt

electronic filing of the material forwhich permission is requested, with thefiler using the special case number as-signed by the Commission for that fil-ing and the special case symbol ‘‘ S,’’as prescribed in § 514.9(b)(19)(i).

(2) If Commission-specified condi-tions are not complied with, or if theexact authority granted by the specialpermission is not used and more, lessor different authority is desired, a newapplication complying with the re-quirements of this part in all respectsand referring to the previous specialpermission must be filed.

[57 FR 36271, Aug. 12, 1992, as amended at 57FR 46324, Oct. 8, 1992; 58 FR 30, Jan. 4, 1993]

§ 514.19 Suspension of tariff matter.All use of suspended tariff matter

shall be deferred for the period speci-fied in the Commission’s suspensionorder. In addition to other affectedplaces in the tariff, as provided in thissection, the fact that tariff matter issuspended is also displayed through the‘‘Status’’ function in the commandline, as described in § 514.8(n)(3).

(a) Domestic offshore commerce—(1)Suspension; period. The Commissionmay suspend from use any rate, fare,charge, classification, Tariff Rule, reg-ulation, or practice of a domestic off-shore carrier for a period of up to 180days beyond the time it would other-wise have lawfully taken effect.

(2) Implementation. Upon issuance ofan order suspending tariff matter inwhole or in part, BTCL shall imme-diately make the appropriate entry inthe domestic offshore carrier’s tariff(s)for each suspended item, which entry:

(i) Specifically identifies the tariffmatter suspended and sets forth anytariff provisions which may remain ef-fective in lieu of the suspended provi-sions;

(ii) Bears an effective date coincidingwith that in the applicable suspensionorder;

(iii) Bears a thru date coincidingwith the end of the suspension periodspecified in the Commission order; and

(iv) Reproduces in the ATFI SystemNews and/or the applicable commoditydescription record, TLI notes, TariffRule text, etc., those portions of theorder directed by the Commission to beso published, or, in the absence of such


209


direction, reproduces the suspensionorder in its entirety.

(3) Amendment of suspended tariff mat-ter. (i) Neither suspended matter normatter continued in effect as a resultof a suspension, may be amended, de-leted or withdrawn except through useof the special case number and symbolprocedure under § 514.9(b)(19) referred toin the order or special permission is-sued by the Commission, except that atariff affected by a suspension ordermay be amended during the suspensionperiod if the amendment does not af-fect the suspended materials.

(ii) If, prior to receiving a suspensionorder, a carrier files an amendment re-issuing, deleting, canceling or amend-ing any tariff matter named in a subse-quent suspension order, the amend-ment shall be rejected.

(4) Vacating suspension of tariff matter.Should the Commission vacate a sus-pension order earlier than the date towhich the subject tariff matter wasoriginally suspended, BTCL shall im-mediately change the thru date to thespecified date in the Commission’sorder vacating the suspension order.

(5) Cancellation of suspended matter. (i)Should the Commission subsequentlycancel all or any part of previously-suspended tariff matter, BTCL shallimmediately change the expirationdate to the date of cancellation setforth in the Commission’s order. See§ 514.4(e).

(ii) If suspended tariff matter is notcanceled by the Commission prior toits thru date, it shall take effect auto-matically on the thru date and any tar-iff matter which was continued in ef-fect during the suspension period shallbe automatically superseded by thetariff matter that had been suspendedbut was not canceled.

(b) Controlled common carriers inforeign commerce.

(1) Suspension; period. Tariff matterfiled by a controlled common carriermay be suspended at any time beforeits effective date. Tariff matter alreadyin effect may be suspended upon theCommission’s issuance of a show causeorder on not less than 60 days’ noticeto the common carrier. In either in-stance, the suspension period shall notexceed 180 days.

(2) Implementation. Upon issuance ofan order suspending tariff matter inwhole or in part, the Commission’sBTCL shall immediately make the ap-propriate entry into the controlledcommon carrier’s tariff(s) for each sus-pended item, which entry:

(i) Specifically identifies the tariffmaterial suspended;

(ii) Bears an effective date coincidingwith that of the applicable suspensionorder;

(iii) Bears a thru date coincidingwith the end of the suspension periodspecified in the Commission order; and

(iv) Reproduces in the ATFI SystemNews and/or the applicable commoditydescription record, TLI notes, TariffRule text, etc., those portions of theorder directed by the Commission to beso published, or, in the absence of suchdirection, reproduces the suspensionorder in its entirety.

(3) Replacement rates. (i) Controlledcommon carrier tariff matter filed tobecome effective during a suspensionperiod in lieu of the suspended matter:

(A) May become effective imme-diately upon filing or upon the effec-tive date of the suspension, whicheveris later; and

(B) Shall be filed using the specialcase symbol and number issued by theCommission under § 514.9(b)(19).

(ii) In determining whether to rejectreplacement rates, the Commissionwill consider whether such rates resultin total charges (e.g., rate plus applica-ble surcharges) that are lower than thelowest comparable charges effective fora U.S.-flag or reciprocal-flag commoncarrier serving the same trade.

(iii) At the same time it files replace-ment rates, the controlled commoncarrier shall submit to BTCL a letter(in paper format) identifying the spe-cific U.S.-flag or reciprocal-flag com-mon carrier’s rates, charges, classifica-tion or Tariff Rules resulting in totalcharges which equal or are lower thanits own.

(c) Other suspension situations. Whenthe Commission, upon good causeshown, issues an order to suspend tariffmatter not addressed in paragraphs (a)or (b) of this section, it will set forth inthe order the procedures for effectuat-ing the suspension.


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(d) Other filings in suspension situa-tions. In suspension situations, whenfilings, not provided for elsewhere inthis section and not otherwise per-mitted by the rules of this part, maybecome necessary or desirable, such fil-ings may be directed by the Commis-sion and shall use the assigned specialcase symbol and number procedureunder § 514.9(b)(19).

§ 514.20 Retrieval.(a) General. The Commission will not

provide to the public tariff data inpaper format, except pursuant to re-quests for certification of copies forcourt or government agency use, asprovided in § 514.8(k)(2).

(b) User charges. User charges forservices under this section are providedin § 514.21.

(c) Interactive retrieval. Interactive re-trieval means the process by which anymember of the public accesses theATFI system via dial-up connection,using telecommunications links, amodem and a terminal (see § 514.8(e)),and interacts with the system on atransaction-by-transaction basis to re-trieve tariff matter which has beenfiled in the ATFI database.

(1) Registration. Every public inter-active retriever will be required to reg-ister in advance with BTCL under§ 514.8(f) to obtain a USERID and pass-word.

(2) Automatic logoff. All retrieverswill be automatically logged off after10 minutes of inactivity.

(3) Remote retrieval by modem. A publicretriever may access and/or obtain(through screen prints) ATFI filed tar-iff data through modem and tele-communications links and proceduresauthorized by the Commission.

(4) Tariff Control Center. A public re-triever may access and/or obtain ATFIfiled tariff data through personal oper-ation of one of several terminals pro-vided in the Tariff Control Center atthe FMC headquarters in Washington,D.C.

(d) Batch retrieval through data basefiles. Interested parties may subscribeto all tariff filings/updates received bythe Commission on a daily basis. TheATFI System Administrator will cre-ate a daily subscriber data update filewhich will be accessible to subscribers.

The daily updates subscriber will ac-cess the ATFI system to on-linedownload the tariff updates receivedduring the previous workday and anyintervening weekend/holidays, as wellas any tariff updates created by theCommission (e.g., suspensions, rejec-tions, etc.). Subscribers may requestthat daily updates be forwarded ontape (either 9 track, 6250 bpi or 8 mmcartridge, Exabyte 8500 compatible)when the file size indicates that the on-line download option is not cost-effec-tive. Subscriber responsibility andcharges for use of this option are speci-fied in § 514.21(j)(2). The Commissionmay also send selected daily updatesby first class mail (or as directed bysubscribers at subscriber’s expense) ormake updates available at the ATFIcomputer center when the magnitudeof the file size indicates that downloadswould degrade ATFI access for otherATFI user functions. The charge speci-fied in § 514.21(j)(2) will apply, but sub-scribers will not be required to providetapes. Subscribers requesting updatedata on tape are responsible for insur-ing that the Commission has receivedsufficient pre-paid monies before thelast business day of the precedingmonth in order to subscribe to the nextmonth’s filings. The Commission willterminate the download capability ofany accounts in arrears.

(e) Instructional materials—(1) ATFI‘‘Batch Filing Guide’’ and user manual.The ATFI user guides applicable to re-trieval functions are the ‘‘ATFI Fun-damentals Guide,’’ ‘‘ATFI SystemHandbook,’’ and ‘‘ATFI Tariff Re-trieval Guide.’’ See § 514.8(b). The userof subscriber tapes will also need theATFI transaction set formats and spec-ifications detailed in the ‘‘Batch FilingGuide.’’ See § 514.8(d)(3). The trans-action set formats published for batchfilers are used for the formatting ofsubscriber tapes.

(2) Computer based instruction (‘‘CBI’’).Computer based instruction for ATFIretrieval is a menu option for reg-istered interactive retrievers using theATFI central site system. See § 514.8(h).

(f) Filers. Properly registered individ-uals who will have ‘‘write’’ privilegesfor editing tariff data may access thosetariffs for which they have such filingprivileges without restriction. Where


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filing firms or employees thereof alsoregister as public retrievers for accessto all tariff data, the restrictions inparagraph (c)(2) of this section shallapply when they enter ATFI as a re-triever.

[57 FR 36271, Aug. 12, 1992, as amended at 58FR 30715, May 27, 1993; 60 FR 56123, Nov. 7,1995]

§ 514.21 User charges.In accordance with 5 U.S.C. 552 and 31

U.S.C. 9701, the user charges in thissection are established for servicesunder this part. Unless otherwise pro-vided in this part, checks, drafts ormoney orders shall be remitted andmade payable to ‘‘Federal MaritimeCommission (OBFM),’’ 800 North Cap-itol Street, NW., Washington, DC 20573.Unless otherwise specified, overduepayments will be charged interest inaccordance with the rate establishedby the Department of the Treasury foreach 30-day period or portion thereofthat the payment is overdue. In addi-tion to any other remedy and penaltyprovided by law and regulation, if pay-ment is overdue for 90 days, ATFI serv-ices will be denied:

(a) Application for exemption (See§§ 514.3 and 514.8(a)): As provided in§ 502.69 of this chapter.

(b) User manual (of ATFI ‘‘Guides’’ --§ 514.8(b)).

(1) In diskette form: $15 for diskette(s)containing all user guides inWordPerfect 5.0 format.

(2) Printed, in paper form (Batch Fil-ing Guide is free of charge and is fur-nished separately):

(i) Package A: Fundamentals Guideand System Handbook (125 pages) aremade available jointly and are a pre-requisite for use of either of the pack-ages in paragraphs (b)(2)(ii) or(b)(2)(iii): $18.00.

(ii) Package B: Tariff Retrieval Guide:$15.00.

(iii) Package C: Tariff Filing Guide:$27.00.

(iv) Package D: All Guides listed inparagraphs (b)(2)(i) through (b)(2)(iii):$55.00.

(3) Ordering manuals. Requests foruser manual package(s) should be inwriting and addressed to ‘‘BTCL Manu-als,’’ Federal Maritime Commission,Washington, DC 20573. A check for the

appropriate amount should be made tothe ‘‘Federal Maritime Commission.’’

(4) Updates. Updates to the user man-ual in any format will not be furnishedautomatically and are not included inthe user charge. The Commission willpublicize notice of upgrades when theyoccur.

(c) Registration for user (filer and/or re-triever ID and password (see exhibit 1 tothis part and §§ 514.4(d), 514.8(f) and514.20)): $162 for initial registration forfirm and one individual; $136 for addi-tions and changes.

(d) Certification by Commission Sec-retary of tariff data (§ 514.8(k)(2)): Asprovided in § 503.43(c) of this chapter.

(e) Certification of batch filing capabil-ity (by appointment through the Bureauof Administration) (§ 514.8(l)).

(1) User charge: $359 per certificationsubmission (covers all types of tariffsfor which the applicant desires to becertified as well as recertification re-quired by substantial changes to theATFI system).

(2) Certification submissions:(i) May be made in one or more

scheduled certification periods;(ii) May include transaction sets for

one of each different tariff type listedin Appendix A (# 14) of the ATFI BatchFiling Guide; and

(iii) May be made to the ATFIcentral site computer via on-line batchor to the ATFI Computer Center viabulk batch (9-track tape), or both.

(f) Application for special permission(§ 514.18): $146.

(g) Remote electronic retrieval(§ 514.20(c)(3)). The fees for remote elec-tronic access to ATFI electronic dataare:

(1) A fee of 46 cents for each minuteof remote computer access directly tothe ATFI database by any individual;and

(2) Through September 30, 1995, for aperson operating or maintaining infor-mation in a database that has multipletariff or service contract information,obtained directly or indirectly fromthe Commission, a fee of 46 cents foreach minute that database is subse-quently accessed by computer by anyindividual.

(h) Printing (screen prints) ofdownloaded tariff matter at Commis-sion’s Tariff Control Center


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(§ 514.20(c)(4)): as provided in part 503,subpart E.

(i) Tariff filing fee. The fee for tarifffiling in either the foreign or domesticoffshore commerce of the UnitedStates shall be 17 cents per filing ob-ject; the fee for filing service contractessential terms shall be $1.65 per filingset.

(j) Daily Subscriber Data (§ 514.20(d)).(1) Persons requesting download ofdaily updates must pay 46 cents perminute as provided by § 514.21(g)(1).

(2) Persons requesting daily updateson tape must supply the tapes and re-turn postage, and pay $43 per daily up-date.

(k) Miscellaneous tapes. The fee fortape data, other than the ATFIdatabase described in paragraph (j) ofthis section, shall be $61 for the initialtape plus $25 for each additional taperequired.

(l) Exceptions.(1) Marine terminal tariff data are

not subject to a secondary user chargefor access under paragraphs (g)(2) or(m)(2) of this section.

(2) Subject to the secondary accessrestrictions and user fees under para-graph (m)(2) of this section:

(i) Filers may, without the necessityof paying a user fee under this section,access only those tariffs or parts of tar-iffs for which they have an authorizedfiler USERID and password.

(ii) A Federal agency is exempt frompaying a fee under paragraphs (g) and(j) of this section.

(m) Enforcement of section 502 of PublicLaw 102–582 (until September 30, 1995).Through September 30, 1995, and inorder to comply with section 502 ofPublic Law 102–582 (46 U.S.C. 1707a), of-ficial ATFI tariff data may be accessedby computer only as described in thisparagraph:

(1) Direct access. (i) Retrievers. Anyperson may, with a proper retrievalUSERID and password, enter the offi-cial ATFI database to obtain computeraccess of tariff matter, as provided inthis part, but may download ATFI dataonly through the ‘‘Print Screen’’ func-tion, which prints one screen at a timeon paper. The user fee for this com-puter access is 46 cents a minute, forwhich the user will be billed at the endof each month.

(ii) Filers. Any person with a properfiler USERID and password may enterthe official ATFI database to obtaincomputer access of tariff matter asprovided in this part, but maydownload ATFI data only through the‘‘Print Screen’’ function, which printsone screen at a time on paper, and thefiler ATFI-mail-file-transfer function,which prints the contents of the filer’sATFI mail on paper.

(2) Indirect access: purchase and use ofdatabase tapes. (i)(A) Any person pur-chasing or subscribing to, or otherwiseacquiring, ATFI database tapes under§ 514.20(d) and this section shall firstsubmit for approval to BTCL of theFMC a description and model of the ac-counting or charging system it intendsto use to comply with this paragraphso that the FMC can determine wheth-er such system is adequate. There shallbe included in the application for ap-proval detailed descriptions of:

(1) The methodology for, inter alia,monitoring, collecting, reporting andpayment to the FMC of the secondaryaccess fee for all indirect access ofdata, as prescribed by section 502 ofPublic Law 102–582 and this part;

(2) Features to protect the securityof tariff data;

(3) How the applicant intends to cat-egorize and handle ‘‘mixed’’ data, i.e.,data which is, as well as data which isnot, subject to the user fee.

(4) All the records which will be nec-essary to perform the functions setforth in paragraphs (m)(2)(i)(A)(1)through (m)(2)(i)(A)(3) of this section,to permit adequate evaluation of thereports submitted and computationsused, and sufficient to reflect properlythe charges to be collected and paidunder this paragraph, including, spe-cifically, all records of access granted,fees charged and collected for each sec-ondary retriever, and remittances toFMC. These records, which must be re-tained for possible audit under para-graph (m)(2)(ii) of this section, shall in-clude books, records, documents, andother evidence and accounting proce-dures and practices, regardless of form,e.g., machine readable media such asdisk tape, or type, e.g., data bases, ap-plications software, data base manage-ment software, utilities.


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(B) Those parts of the charging sys-tem which the applicant wishes not tobe disclosed to the public because theyare considered business sensitive, e.g.,‘‘trade secrets,’’ shall be kept com-pletely separate from the balance ofthe application, along with a full jus-tification of their non-disclosability.The Commission will consider any re-quest for these records under the Free-dom of Information Act.

(C) The FMC will evaluate the charg-ing system within sixty (60) calendardays after submission and approval willbe assumed unless the FMC otherwiseformally notifies the applicant withinthe sixty-day period.

(D) The database tapes of ATFI maynot be made available to any personuntil its charging system is approvedby FMC.

(ii)(A) Every person who is author-ized to purchase ATFI database tapesunder paragraph (m)(2)(i) of this sec-tion shall maintain those records de-scribed in paragraph (m)(2)(i)(A)(4) ofthis section until October 1, 1998.

(B) The FMC or its representativesshall have the right to examine andaudit all records described in para-graphs (m)(2)(i)(A)(4) and (m)(2)(ii)(A)of this section, for the purpose of eval-uating the accuracy and completenessof the reports required by this para-graph. The right of examination shallextend to all documents and otherdata, regardless of form, necessary topermit adequate evaluation of the re-ports submitted, along with the com-putations used.

(iii)(A) Any person having an ATFIdatabase tape may access by computerthe data contained therein for its ownuse, and/or may permit others to accessby computer the data, but only if itrecords all such access and pays to theFMC the 46-cents-a-minute usercharges for all computer access to suchdata, as prescribed in paragraph(g)(1)(ii) of this section under the ap-proved charging system described inparagraph (m)(2)(i) of this section.

(B) The access of data on paper, e.g.,that which has been printed or writtenon the paper, is not subject to the indi-rect (secondary) user fee under thisparagraph, even if subsequently con-verted into computer, e.g., database,format.

(iv) No person having an ATFIdatabase tape may allow downloadingof the data contained therein otherthan by an effectively-designed andfunctioning ‘‘Print-Screen’’ function,which allows printing of one screen ata time onto paper.

(v) Billing and Payment.(A) Within ten (10) calendar days

after the end of each month, eachdatabase-tape purchaser under para-graph (m)(2)(i) of this section shalltransmit to the Office of Budget andFinancial Management, Federal Mari-time Commission, 800 North CapitolStreet, NW. Washington, DC 20573–0001,a report of all computer access to ATFIdata listed by user, date and minutesaccessed. Each such purchaser shall si-multaneously transmit payment to‘‘the Federal Maritime Commission’’for such usage at the rate of 46 centsper minute.

(B) If payment is not made when due,the database purchaser under para-graph (m)(2)(v)(A) of this section maybe assessed interest, penalties and ad-ministrative costs associated with col-lection of late payments in accordancewith the Federal Claims CollectionStandards, 4 CFR 102.13. The FMC in-tends to utilize the provisions of theDebt Collection Act, 5 U.S.C. 5514, in-cluding disclosure to consumer report-ing agencies, to ensure prompt pay-ment.

(C) The FMC reserves the right tosuspend or terminate furnishing ATFIdata tapes to any person if payment isnot timely made.

[57 FR 36271, Aug. 12, 1992, as amended at 58FR 30, Jan. 4, 1993; 58 FR 30715, May 27, 1993;59 FR 59171, Nov. 16, 1994; 59 FR 63908, Dec. 12,1994; 60 FR 56124, Nov. 7, 1995]


The information collection require-ments contained in these regulations(46 CFR part 514 and Exhibit 1 to part514) have been approved by the Office ofManagement and Budget [OMB] in ac-cordance with 44 U.S.C. chapter 35 andhave been assigned OMB control num-ber 3072-0055.


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46 CFR Ch. IV (10–1–96 Edition)§ 514.91


215



216

46 CFR Ch. IV (10–1–96 Edition)Pt. 514, Exh. II

EXHIBIT II TO PART 514

Sample Abbreviated Format Service Contract

Service Contract No.: SC 1–95FMC File No.: 50,000Essentials Terms No.: ET 1–95Amendment No.: lllService Contract Essential Terms Publica-

tion No.: 003Tariff(s) of General Applicability No.: 001, 002

Carrier/Conference Name: Efficient LinerTransportation, Inc.

Carrier/Conference Address: 1227 SeawayDrive, Washington, DC 20573

and

Shipper Name: ABC Electronics CompanyShipper Address: 7221 Happiness Lane, New

York, NY 10001

This is a service contract pursuant to theShipping Act of 1984 (46 U.S.C. app. 1701 etseq.) and FMC rules at 46 CFR Part 514, be-tween ‘‘CARRIER/CONFERENCE’’ and‘‘SHIPPER’’ parties named herein. The con-tract parties certify that the terms set forthherein and the essential terms as publishedin Carrier/Conference Service Contract Es-sential Terms Tariff No. 003, ET No. 1–95, inthe Federal Maritime Commission’s Auto-mated Tariff Filing and Information System,constitute the true and complete copy of allaspects of this contract and are hereby in-corporated by reference.

Further, shipper party named herein cer-tifies its status and that of any affiliate(s)/subsidiary(ies) named herein as (check ap-propriate box(es):

NVOCC lllShippers’ Association lllOwner of Cargo lllOther (Please specify) lll

Records maintained to support shipmentsunder this service contract are: bills of lad-ing, shipping manifests, and other relatedwritten correspondence between contractparties.

Contact person for records in the event ofa request by the Federal Maritime Commis-sion: Efficient Liner Transportation, Inc.,Traffic Manager, 1227 Seaway Drive, Wash-ington, DC 20573, (202) 523–5856.

————————————————————————(Carrier/Conference Signature)

————————————————————————Date

Efficient Liner Transportation, Inc.

————————————————————————(Shipper Signature)

————————————————————————Date

ABC Electronics Company

Affiliate of shipper: Quality Compact Discs,Inc.

Affiliate’s address: 7221–A Happiness Lane,New York, NY 10001

[61 FR 5311, Feb. 12, 1996; 61 FR 14979, Apr. 4,1996]

PART 540—SECURITY FOR THEPROTECTION OF THE PUBLIC

Subpart A—Proof of Financial Responsibil-ity, Bonding and Certification of Finan-cial Responsibility for Indemnificationof Passengers for Nonperformance ofTransportation

Sec.540.1 Scope.540.2 Definitions.540.3 Proof of financial responsibility, when

required.540.4 Procedure for establishing financial

responsibility.540.5 Insurance, guaranties, escrow ac-

counts, and self-insurance.540.6 Surety bonds.540.7 Evidence of financial responsibility.540.8 Denial, revocation, suspension, or

modification.540.9 Miscellaneous.

FORM FMC–131FORM FMC–132AFORM FMC–133A

APPENDIX A TO PART 540—EXAMPLE OF ES-CROW AGREEMENT FOR USE UNDER 46 CFR540.5(b)

Subpart B—Proof of Financial Responsibil-ity, Bonding and Certification of Finan-cial Responsibility To Meet Liability In-curred for Death or Injury to Pas-sengers or Other Persons on Voyages

540.20 Scope.540.21 Definitions.540.22 Proof of financial responsibility,

when required.540.23 Procedure for establishing financial

responsibility.540.24 Insurance, surety bonds, self-insur-

ance, guaranties, and escrow accounts.540.25 Evidence of financial responsibility.540.26 Denial, revocation, suspension, or

modification.540.27 Miscellaneous.

FORM FMC–132BFORM FMC–133B

Subpart C—General

540.91 OMB control numbers assigned pursu-ant to the Paperwork Reduction Act.

AUTHORITY: 5 U.S.C. 552, 553; 31 U.S.C. 9701;secs. 2 and 3, Pub. L. 89–777, 80 Stat. 1356–1358


217


(46 U.S.C. app. 817e, 817d); sec. 43 of the Ship-ping Act, 1916 (46 U.S.C. app. 841a); sec. 17 ofthe Shipping Act of 1984 (46 U.S.C. 1716).


Subpart A—Proof of Financial Re-sponsibility, Bonding and Cer-tification of Financial Respon-sibility for Indemnification ofPassengers for Nonperform-ance of Transportation

§ 540.1 Scope.(a) The regulations contained in this

subpart set forth the procedures where-by persons in the United States who ar-range, offer, advertise or provide pas-sage on a vessel having berth or state-room accommodations for 50 or morepassengers and embarking passengersat U.S. ports shall establish their fi-nancial responsibility or, in lieu there-of, file a bond or other security for ob-ligations under the terms of ticket con-tracts to indemnify passengers for non-performance of transportation to whichthey would be entitled. Included alsoare the qualifications required by theCommission for issuance of a Certifi-cate (Performance) and the basis forthe denial, revocation, modification, orsuspension of such Certificates.

(b) Failure to comply with this partmay result in denial of an applicationfor a certificate. Vessels operatingwithout the proper certificate may bedenied clearance and their owners mayalso be subject to a civil penalty of notmore than $5,000 in addition to a civilpenalty of $200 for each passage sold,such penalties to be assessed by theFederal Maritime Commission (46U.S.C. app. 91, 817d and 817e).

§ 540.2 Definitions.As used in this subpart, the following

terms shall have the following mean-ings:

(a) Person includes individuals, cor-porations, partnerships, associations,and other legal entities existing underor authorized by the laws of the UnitedStates or any State thereof or the Dis-trict of Columbia, the Commonwealthof Puerto Rico, the Virgin Islands orany territory or possession of the Unit-

ed States, or the laws of any foreigncountry.

(b) Vessel means any commercial ves-sel having berth or stateroom accom-modations for 50 or more passengersand embarking passengers at U.S.ports.

(c) Commission means the FederalMaritime Commission.

(d) United States includes the Com-monwealth of Puerto Rico, the VirginIslands or any territory or possessionof the United States.

(e) Berth or stateroom accommodationor passenger accommodations includesall temporary and all permanent pas-senger sleeping facilities.

(f) Certificate (Performance) means aCertificate of Financial Responsibilityfor Indemnification of Passengers forNonperformance of Transportation is-sued pursuant to this subpart.

(g) Passenger means any person whois to embark on a vessel at any U.S.port and who has paid any amount fora ticket contract entitling him towater transportation.

(h) Passenger revenue means thosemonies wherever paid by passengerswho are to embark at any U.S. port forwater transportation and all other ac-commodations, services and facilitiesrelating thereto.

(i) Unearned passenger revenue meansthat passenger revenue received forwater transportation and all other ac-commodations, services, and facilitiesrelating thereto not yet performed.

(j) Insurer means any insurance com-pany, underwriter, corporation, or as-sociation or underwriters, ship owners’protection and indemnity association,or other insurer acceptable to the Com-mission.

(k) Evidence of insurance means a pol-icy, certificate of insurance, covernote, or other evidence of coverage ac-ceptable to the Commission.

(l) Whole-ship charter means an ar-rangement between a passenger vesseloperator and a corporate or institu-tional entity:

(1) Which provides for the purchase ofall the passenger accommodations on avessel for a particular voyage or seriesof voyages; and


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46 CFR Ch. IV (10–1–96 Edition)§ 540.3

(2) Whereby the involved corporate orinstitutional entity provides such ac-commodations to the ultimate pas-sengers free of charge and such accom-modations are not resold to the public.

[49 FR 36313, Sept. 14, 1984, as amended at 57FR 41891, Sept. 14, 1992]

§ 540.3 Proof of financial responsibil-ity, when required.

No person in the United States mayarrange, offer, advertise or provide pas-sage on a vessel unless a Certificate(Performance) has been issued to orcovers such person.

§ 540.4 Procedure for establishing fi-nancial responsibility.

(a) In order to comply with section 3of Public Law 89–777 (80 Stat. 1357, 1358)enacted November 6, 1966, there mustbe filed an application on Form FMC–131 for a Certificate of Financial Re-sponsibility for Indemnification of Pas-sengers for Nonperformance of Trans-portation. Copies of Form FMC–131may be obtained from the Secretary,Federal Maritime Commission, Wash-ington, DC 20573, or at the Commis-sion’s offices at New York, NY; NewOrleans, LA; San Francisco, CA;Miami, FL; Los Angeles, CA; Hato Rey,PR; and Chicago, IL.

(b) An application for a Certificate(Performance) shall be filed in dupli-cate with the Secretary, Federal Mari-time Commission, by the vessel owneror charterer at least 60 days in advanceof the arranging, offering, advertising,or providing of any water transpor-tation or tickets in connection there-with except that any person other thanthe owner or charterer who arranges,offers, advertises, or provides passageon a vessel may apply for a Certificate(Performance). Late filing of the appli-cation will be permitted only for goodcause shown. All applications and evi-dence required to be filed with theCommission shall be in English, andany monetary terms shall be expressedin terms of U.S. currency. The Com-mission shall have the privilege of veri-fying any statements made or any evi-dence submitted under the rules of thissubpart. An application for a Certifi-cate (Performance) shall be accom-panied by a filing fee remittance of$1,874.

(c) The application shall be signed bya duly authorized officer or representa-tive of the applicant with a copy of evi-dence of his or her authority. In theevent of any material change in thefacts as reflected in the application, anamendment to the application shall befiled no later than five (5) days follow-ing such change. For the purpose ofthis subpart, a material change shallbe one which: (1) Results in a decreasein the amount submitted to establishfinancial responsibility to a level belowthat required to be maintained underthe rules of this subpart, or (2) requiresthat the amount to be maintained beincreased above the amount submittedto establish financial responsibility.Notice of the application for, issuance,denial, revocation, suspension, ormodification of any such Certificateshall be published in the FEDERAL REG-ISTER.


§ 540.5 Insurance, guaranties, escrowaccounts, and self-insurance.

Except as provided in § 540.9(j), theamount of coverage required under thissection and § 540.6(b) shall be in anamount determined by the Commissionto be no less than 110 percent of the un-earned passenger revenue of the appli-cant on the date within the 2 fiscalyears immediately prior to the filing ofthe application which reflects thegreatest amount of unearned passengerrevenue, unless the applicant qualifiesfor consideration under § 540.5(e). TheCommission, for good cause shown,may consider a time period other thanthe previous 2-fiscal-year requirementin this section or other methods ac-ceptable to the Commission to deter-mine the amount of coverage required.Evidence of adequate financial respon-sibility for the purposes of this subpartmay be established by one or a com-bination (including § 540.6 SuretyBonds) of the following methods:

(a) Filing with the Commission evi-dence of insurance, issued by an in-surer, providing coverage for indem-nification of passengers in the event ofthe nonperformance of water transpor-tation.

(1) Termination or cancellation ofthe evidence of insurance, whether by


219


the assured or by the insurer, andwhether for nonpayment of premiums,calls or assessments or for other cause,shall not be effected: (i) Until notice inwriting has been given to the assuredor to the insurer and to the Secretaryof the Commission at its office, inWashington, DC 20573, by certifiedmail, and (ii) until after 30 days expirefrom the date notice is actually re-ceived by the Commission, or untilafter the Commission revokes the Cer-tificate (Performance), whichever oc-curs first. Notice of termination orcancellation to the assured or insurershall be simultaneous to such noticegiven to the Commission. The insurershall remain liable for claims coveredby said evidence of insurance arisingby virtue of an event which had oc-curred prior to the effective date ofsaid termination or cancellation. Nosuch termination or cancellation shallbecome effective while a voyage is inprogress.

(2) The insolvency or bankruptcy ofthe assured shall not constitute a de-fense to the insurer as to claims in-cluded in said evidence of insuranceand in the event of said insolvency orbankruptcy, the insurer agrees to payany unsatisfied final judgments ob-tained on such claims.

(3) No insurance shall be acceptableunder these rules which restricts the li-ability of the insurer where privity ofthe owner or charterer has been shownto exist.

(4) Paragraphs (a)(1) through (a)(3) ofthis section shall apply to the guar-anty as specified in paragraph (c) ofthis section.

(b) Filing with the Commission evi-dence of an escrow account, acceptableto the Commission, for indemnificationof passengers in the event of non-performance of water transportation.Parties filing escrow agreements forCommission approval may executesuch agreements in the form set forthin appendix A of subpart A of this part.

(c) Filing with the Commission aguaranty on Form FMC–133A, by aguarantor acceptable to the Commis-sion, for indemnification of passengersin the event of nonperformance ofwater transportation. The require-ments of Form FMC–133A, however,

may be amended by the Commission ina particular case for good cause.

(d) Filing with the Commission forqualification as a self-insurer such evi-dence acceptable to the Commission aswill demonstrate continued and stablepassenger operations over an extendedperiod of time in the foreign or domes-tic trade of the United States. Suchevidence must include an affidavit bythe operator’s Chief Executive Officeror other responsible corporate officerof a minimum of five years of oper-ation in United States trades, with asatisfactory explanation of any claimsfor nonperformance of transportation.In addition, applicant must dem-onstrate financial responsibility bymaintenance of net worth in anamount calculated as in the introduc-tory text of this section. The Commis-sion will take into consideration allcurrent contractual requirements withrespect to the maintenance of such networth to which the applicant is bound.Evidence must be submitted that thenet worth required above is physicallylocated in the United States. This evi-dence of financial responsibility shallbe supported by and subject to the fol-lowing which are to be submitted on acontinuing basis for each year or por-tion thereof while the Certificate (Per-formance) is in effect:

(1) A current quarterly balance sheet,except that the Commission, for goodcause shown, may require only an an-nual balance sheet;

(2) A current quarterly statement ofincome and surplus, except that theCommission, for good cause shown,may require only an annual statementof income and surplus;

(3) An annual current balance sheetand an annual current statement of in-come and surplus to be certified by ap-propriate certified public accountants;

(4) Semiannual current statement ofthe book value or current market valueof any assets physically located withinthe United States together with a cer-tification as to the existence andamount of any encumbrances thereon;

(5) Semiannual current credit ratingreport by Dun and Bradstreet or anysimilar concern found acceptable tothe Commission;


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46 CFR Ch. IV (10–1–96 Edition)§ 540.6

(6) A list filed semiannually of allcontractual requirements or other en-cumbrances (and to whom the appli-cant is bound in this regard) relatingto the maintenance of net worth;

(7) All financial statements requiredto be submitted under this sectionshall be due within a reasonable timeafter the close of each pertinent ac-counting period;

(8) Such additional evidence of finan-cial responsibility as the Commissionmay deem necessary in appropriatecases.

(e) The following schedule may be ap-plied to determine the minimum cov-erage required for indemnification ofpassengers in the event of nonperform-ance of water transportation for thoseoperators who have not elected to qual-ify by self-insurance; and can provideevidence (in the form of an affidavit bythe operator’s Chief Executive Officeror other responsible corporate officer)of a minimum of five years of oper-ation in United States trades, with asatisfactory explanation of any claimsfor nonperformance of transportation:

Unearned passenger revenue(‘‘UPR’’) Required coverage

$0–$5,000,000 ................................ 100% of UPR up to$5,000,000.

$5,000,001–$15,000,000 ................ $5,000,000 plus 50% ofexcess UPR over$5,000,000 subject toan overall maximumof $5,000,000 pervessel.

$15,000,001–$35,000,000 .............. $10,000,000 plus 25%of excess of UPRover $15,000,000subject to an overallmaximum of$5,000,000 per ves-sel and a$15,000,000 overallmaximum.

Over $35,000,000 ........................... $15,000,000 overallmaximum.

(f) Revenues derived from whole-shipcharters, as defined in § 540.2(l), may beexempted from consideration as un-earned passenger revenues, on condi-tion that, in the case of a new operatoror within 30 days of the execution ofthe whole-ship charter if the operatorhas a Performance Certificate for thevessel in question: (1) A certified truecopy of the contract or charter is fur-nished with the application; (2) Thechartering party attests that it will re-

distribute the vessel’s passenger ac-commodations without charge; and (3)A document executed by the charteringparty’s Chief Executive Officer or otherresponsible corporate officer is submit-ted by which the chartering party spe-cifically acknowledges that its rightsto indemnification under section 3 ofPublic Law 89–777 may be affected bythe reduction in section 3, Public Law89–777, financial responsibility cov-erage attributable to the exclusion ofsuch funds from the operator’s UPR.

[49 FR 36313, Sept. 14, 1984, as amended at 55FR 1824, Jan. 19, 1990; 57 FR 41891, Sept. 14,1992; 57 FR 62480, Dec. 31, 1992]

§ 540.6 Surety bonds.(a) Where financial responsibility is

not established under § 540.5, a suretybond shall be filed on Form FMC–132A.Such surety bond shall be issued by abonding company authorized to dobusiness in the United States and ac-ceptable to the Commission for indem-nification of passengers in the event ofnonperformance of water transpor-tation. The requirements of FormFMC–132A, however, may be amendedby the Commission in a particular casefor good cause.

(b) In the case of a surety bond whichis to cover all passenger operations ofthe applicant subject to these rules,such bond shall be in an amount cal-culated as in the introductory text of§ 540.5.

(c) In the case of a surety bond whichis to cover an individual voyage, suchbond shall be in an amount determinedby the Commission to equal the grosspassenger revenue for that voyage.

(d) The liability of the surety underthe rules of this subpart to any pas-senger shall not exceed the amountpaid by any such passenger, exceptthat, no such bond shall be terminatedwhile a voyage is in progress.

[49 FR 36313, Sept. 14, 1984, as amended at 55FR 1824, Jan. 19, 1990]

§ 540.7 Evidence of financial respon-sibility.

Where satisfactory proof of financialresponsibility has been given or a satis-factory bond has been provided, a Cer-tificate (Performance) covering speci-fied vessels shall be issued evidencingthe Commission’s finding of adequate


221


financial responsibility to indemnifypassengers for nonperformance ofwater transportation. The period cov-ered by the Certificate (Performance)shall be indeterminate, unless a termi-nation date has been specified thereon.

§ 540.8 Denial, revocation, suspension,or modification.

(a) Prior to the denial, revocation,suspension, or modification of a Cer-tificate (Performance), the Commissionshall advise the applicant of its inten-tion to deny, revoke, suspend, or mod-ify and shall state the reasons therefor.If the applicant, within 20 days afterthe receipt of such advice, requests ahearing to show that the evidence of fi-nancial responsibility filed with theCommission does meet the rules of thissubpart, such hearing shall be grantedby the Commission, except that a Cer-tificate (Performance) shall becomenull and void upon cancellation or ter-mination of the surety bond, evidenceof insurance, guaranty, or escrow ac-count.

(b) A Certificate (Performance) maybe denied, revoked, suspended, or modi-fied for any of the following reasons:

(1) Making any willfully false state-ment to the Commission in connectionwith an application for a Certificate(Performance);

(2) Circumstances whereby the partydoes not qualify as financially respon-sible in accordance with the require-ments of the Commission;

(3) Failure to comply with or respondto lawful inquiries, rules, regulationsor orders of the Commission pursuantto the rules of this subpart.

(c) If the applicant, within 20 daysafter notice of the proposed denial, rev-ocation, suspension, or modificationunder paragraph (b) of this section, re-quests a hearing to show that such de-nial, revocation, suspension, or modi-fication should not take place, suchhearing shall be granted by the Com-mission.

§ 540.9 Miscellaneous.

(a) If any evidence filed with the ap-plication does not comply with the re-quirements of this subpart, or for anyreason fails to provide adequate or sat-isfactory protection to the public, the

Commission will notify the applicantstating the deficiencies thereof.

(b) Any financial evidence submittedto the Commission under the rules ofthis subpart shall be written in the fulland correct name of the person towhom the Certificate (Performance) isto be issued, and in case of a partner-ship, all partners shall be named.

(c) The Commission’s bond (FormFMC–132A), guaranty (Form FMC–133A), and application (Form FMC–131)forms are hereby incorporated as a partof the rules of this subpart. Any suchforms filed with the Commission underthis subpart must be in duplicate.

(d) Any securities or assets acceptedby the Commission (from applicants,insurers, guarantors, escrow agents, orothers) under the rules of this subpartmust be physically located in the Unit-ed States.

(e) Each applicant, insurer, escrowagent and guarantor shall furnish awritten designation of a person in theUnited States as legal agent for serviceof process for the purposes of the rulesof this subpart. Such designation mustbe acknowledged, in writing, by thedesignee. In any instance in which thedesignated agent cannot be served be-cause of its death, disability, or un-availability, the Secretary, FederalMaritime Commission, will be deemedto be the agent for service of process. Aparty serving the Secretary in accord-ance with the above provision mustalso serve the Certificant, insurer, es-crow agent, or guarantor, as the casemay be, by registered mail at its lastknown address on file with the Com-mission.

(f) [Reserved](g) Financial data filed in connection

with the rules of this subpart shall beconfidential except in instances whereinformation becomes relevant in con-nection with hearings which may be re-quested by applicant pursuant to § 540.8(a) or (b).

(h) Every person who has been issueda Certificate (Performance) must sub-mit to the Commission a semiannualstatement of any changes that havetaken place with respect to the infor-mation contained in the application ordocuments submitted in support there-of. Negative statements are required toindicate no change. Such statements


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46 CFR Ch. IV (10–1–96 Edition)Pt. 540, Subpt. A, Form FMC–131

must cover every 6-month period of thefiscal year immediately subsequent tothe date of the issuance of the Certifi-cate (Performance), and include astatement of the highest unearned pas-senger vessel revenue accrued for eachmonth in the 6-month reporting period.In addition, the statements will be duewithin 30 days after the close of everysuch 6-month period.

(i) [Reserved](j) The amount of: (1) Insurance as

specified in § 540.5(a), (2) the escrow ac-count as specified in § 540.5(b), (3) theguaranty as specified in § 540.5(c), or (4)the surety bond as specified in § 540.6,shall not be required to exceed 15 mil-lion dollars (U.S.).

(k) Every person in whose name aCertificate (Performance) has been is-sued shall be deemed to be responsiblefor any unearned passage money or de-posits in the hands of its agents or ofany other person or organization au-thorized by the certificant to sell thecertificant’s tickets. Certificants shallpromptly notify the Commission of anyarrangements, including charters andsubcharters, made by it or its agentwith any person pursuant to which thecertificant does not assume respon-sibility for all passenger fares and de-posits collected by such person or orga-nization and held by such person or or-ganization as deposits or payment forservices to be performed by thecertificant. If responsibility is not as-sumed by the certificant, thecertificant also must inform such per-son or organization of the certificationrequirements of Public Law 89–777 andnot permit use of its name or tickets inany manner unless and until such per-son or organization has obtained therequisite Certificate (Performance)from the Commission.

[49 FR 36313, Sept. 14, 1984, as amended at 55FR 34568, Aug. 23, 1990]

FORM FMC–131

FEDERAL MARITIME COMMISSION

Washington, DC 20573

APPLICATION FOR CERTIFICATE OF FINANCIALRESPONSIBILITY

In compliance with the provisions of Pub-lic Law 89–777 and 46 CFR part 540, applica-tion is hereby made for a Certificate of Fi-

nancial Responsibility (check one or both asapplicable):

[ ] for indemnification of passengers fornonperformance. [ ] Initial application [ ]Certificate has previously been applied for (ifso, give date of application and action takenthereon).

[ ] to meet liability incurred for death orinjury to passengers or other persons. [ ]Initial application [ ] Certificate has pre-viously been applied for (if so, give date ofapplication and action taken thereon).

Instructions

Submit two (2) typed copies of the applica-tion to the Secretary, Federal MaritimeCommission, Washington, DC 20573. The ap-plication is in four parts: Part I—General;Part II—Performance; Part III—Casualtyand Part IV—Declaration. Applicants mustanswer all questions in part I and part IV,then parts II and/or part III as appropriate.Instructions relating to part II and part IIIare contained at the beginning of the respec-tive part. If the information required to besubmitted under 46 CFR part 540 has beenpreviously submitted under other rules andregulations of the Commission, state whenand for what reason such information wassubmitted. If previously submitted, it is notnecessary to resubmit. If additional space isrequired, supplementary sheets may be at-tached.

PART I—GENERAL

Answer All Questions

1. (a) Legal business name:(b) English equivalent of legal name if cus-

tomarily written in language other thanEnglish:

(c) Trade name or names used:2. (a) State applicant’s legal form of orga-

nization, i.e., whether operating as an indi-vidual, corporation, partnership, association,joint stock company, business trust, or otherorganized group of persons (whether incor-porated or not), or as a receiver, trustee, orother liquidating agent, and describe currentbusiness activities and length of time en-gaged therein.

(b) If a corporation, association, jointstock company, business trust, or other or-ganization, give:

Name of State or country in which incor-porated or organized.

Date of the incorporation or organization.(c) If a partnership, give name and address

of each partner:3. Give following information regarding

any person or company controlling, con-trolled by, or under common control withyou (answer only if applying as a self-insurerunder part II or part III).


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Federal Maritime Commission Pt. 540, Subpt. A, Form FMC–131

*The filing of sailing schedules will be ac-ceptable in answers to this question.

Name Address Business and rela-tionship to you

............................... ..............................

............................... ..............................

4. In relation to the passenger transpor-tation engaged in by you to or from U.S.ports:

Do you own all the vessels? [ ] Yes [ ] No(If ‘‘No’’ indicate the nature of the arrange-ments under which those not owned by youare available to you (e.g., bareboat, time,voyage, or other charter, or arrangement).)

5. Name of each passenger vessel having ac-commodations for 50 or more passengers andembarking passengers at U.S. ports:

Name Country ofregistry

RegistrationNo.

Maximumnumber ofberth or

stateroomaccommoda-

tions

...................... ..................... .....................

...................... ..................... .....................

6. Submit a copy of passenger ticket orother contract evidencing the sale of pas-senger transportation.

7. Name and address of applicant’s U.S.agent or other person authorized to acceptlegal service in the United States.

PART II—PERFORMANCE

Answer items 8–15 if applying for Certifi-cate of Financial Responsibility for Indem-nification of Passengers for Nonperformance.If you are filing evidence of insurance, es-crow account, guaranty or surety bond undersubpart A of 46 CFR part 540 and providing atleast fifteen (15) million dollars (U.S.) of cov-erage, you need not answer questions 10–15.

8. If you are providing at least fifteen (15)million dollars (U.S.) of coverage, state typeof evidence and name and address of appli-cant’s insurer, escrow agent, guarantor orsurety (as appropriate).

9.* A Certificate (Performance) is desiredfor the following proposed passenger voyageor voyages: (Give itinerary and indicatewhether the Certificate is for a single voy-age, multiple voyages or all voyages sched-uled annually.)

Vessel Voyage date Voyage itinerary

............................... ..............................

............................... ..............................

10. Items 11–15 are optional methods; an-swer only the one item which is applicable tothis application. Check the appropriate boxbelow:

[ ] Insurance (item 11).

[ ] Escrow (item 12).[ ] Surety bond (item 13).[ ] Guaranty (item 14).[ ] Self-insurer (item 15).11. (a) Total amount of performance insur-

ance which is to be computed in accordancewith 46 CFR 540.5. (Evidence of insurancemust be filed with the Federal MaritimeCommission before a Certificate (Perform-ance) may be issued.)

(b) Method by which insurance amount isdetermined (attach data substantiating thatamount is not less than that prescribed in 46CFR 540.5).

(c) Name and address of applicant’s insurerfor performance policy.

12. (a) Name and address of applicant’s es-crow agent. (Applicant may pledge cash orU.S. Government securities, in lieu of a sur-ety bond, to fulfill the indemnification pro-visions of Pub. L. 89–777.)

(b) Total escrow deposit which is to becomputed in accordance with 46 CFR 540.5.(Escrow agreement must be filed with theFederal Maritime Commission before a Cer-tificate (Performance) will be issued.) Cash$———. U.S. Government Securities $———.

(c) Method by which escrow amount is de-termined (attach data substantiating thatamount is not less than that prescribed by 46CFR 540.5).

13. (a) Total amount of surety bond in ac-cordance with 46 CFR 540.6. (The bond mustbe filed with the Federal Maritime Commis-sion before a Certificate (Performance) maybe issued.)

(b) Method by which bond amount is deter-mined (attach data substantiating thatamount is not less than that prescribed in 46CFR 540.6).

(c) Name and address of applicant’s suretyon performance bond.

14. (a) Total amount of guaranty which isto be computed in accordance with 46 CFR540.5. (Guaranty must be filed with the Fed-eral Maritime Commission before a Certifi-cate (Performance) may be issued.)

(b) Method by which guaranty amount isdetermined (attach data substantiating thatamount is not less than that prescribed in 46CFR 540.5).

(c) Name and address of applicant’s guar-antor.

15. If applicant intends to qualify as a self-insurer for a Certificate (Performance) under46 CFR 540.5, attach all data, statements, anddocumentation required therein.

PART III—CASUALTY

Answer Items 16–22 if Applying for Certifi-cate of Financial Responsibility to MeetLiability Incurred for Death or Injury toPassengers or Other Persons

16. (a) Name of passenger vessel subject tosection 2 of Public Law 89–777 operated byyou to or from U.S. ports which has largest


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46 CFR Ch. IV (10–1–96 Edition)Pt. 540, Subpt. A, Form FMC–132A

number of berth or stateroom accommoda-tions.

(b) State the maximum number of berth orstateroom accommodations.

17. Amount of death or injury liability cov-erage based on number of accommodationsaboard vessel named in item 16 above, cal-culated in accordance with 46 CFR 540.24.

Items 18–22 Are Optional Methods: AnswerOnly the One Item Which is Applicable toThis Application

18. (a) Total amount of applicant’s insur-ance. (Evidence of the insurance must befiled with the Federal Maritime Commissionbefore a Certificate (Casualty) will be is-sued.)

(b) Name and address of applicant’s in-surer.

19. (a) Total amount of surety bond. (Bondmust be filed with the Federal MaritimeCommission before a Certificate (Casualty)will be issued.)

(b) Name and address of applicant’s suretyfor death or injury bond.

20. (a) Total amount of escrow deposit. (Es-crow agreement must be filed with the Fed-eral Maritime Commission before a Certifi-cate (Casualty) will be issued.)

(b) Name and address of applicant’s escrowagent.

21. (a) Total amount of guaranty. (Guar-anty must be filed with the Federal Mari-time Commission before a Certificate (Cas-ualty) will be issued.)

(b) Name and address of applicant’s guar-antor.

22. If applicant intends to qualify as a self-insurer for a Certificate (Casualty) under 46CFR 540.24(c), attach all data, statementsand documentation required therein.

PART IV—DECLARATION

This application is submitted by or on be-half of

(a) Name.(b) Name and title of official.(c) Home office— Street and number.(d) City.(e) State or country.(f) ZIP Code.(g) Principal office in the United States—

Street and number.(h) City.(i) State.I declare that I have examined this appli-

cation, including accompanying schedulesand statements, and to the best of myknowledge and belief, it is true, correct andcomplete.

By ——————————————————————(Signature of official)

————————————————————————

(Date)Comments:

[49 FR 36313, Sept. 14, 1984, as amended at 55FR 34568, Aug. 23, 1990]

FORM FMC–132A


Surety Co. Bond No. ————FMC Certificate No. ————

PASSENGER VESSEL SURETY BOND (46 CFRPART 540)

Know all men by these presents, that we—————— (Name of applicant), of—————— (City), —————— (State andcountry), as Principal (hereinafter calledPrincipal), and —————— (Name of surety),a company created and existing under thelaws of —————— (State and country) andauthorized to do business in the UnitedStates as Surety (hereinafter called Surety)are held and firmly bound unto the UnitedStates of America in the penal sum of——————, for which payment, well andtruly to be made, we bind ourselves and ourheirs, executors, administrators, successors,and assigns, jointly and severally, firmly bythese presents.

Whereas the Principal intends to become aholder of a Certificate (Performance) pursu-ant to the provisions of subpart A of part 540of title 46, Code of Federal Regulations andhas elected to file with the Federal MaritimeCommission such a bond to insure financialresponsibility and the supplying transpor-tation and other services subject to subpartA of part 540 of title 46, Code of Federal Reg-ulations, in accordance with the ticket con-tract between the Principal and the pas-senger, and

Whereas this bond is written to assurecompliance by the Principal as an authorizedholder of a Certificate (Performance) pursu-ant to subpart A of part 540 of title 46, Codeof Federal Regulations, and shall inure tothe benefit of any and all passengers towhom the Principal may be held legally lia-ble for any of the damages herein described.

Now, therefore, the condition of this obli-gation is such that if the Principal shall payor cause to be paid to passengers any sum orsums for which the Principal may be held le-gally liable by reason of the Principal’s fail-ure faithfully to provide such transportationand other accommodations and services inaccordance with the ticket contract made bythe Principal and the passenger while thisbond is in effect for the supplying of trans-portation and other services pursuant to andin accordance with the provisions of subpartA of part 540 of title 46, Code of Federal Reg-ulations, then this obligation shall be void,otherwise, to remain in full force and effect.


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Federal Maritime Commission Pt. 540, Subpt. A, App. A

The liability of the Surety with respect toany passenger shall not exceed the passageprice paid by or on behalf of such passenger.

The liability of the Surety shall not be dis-charged by any payment or succession ofpayments hereunder, unless and until suchpayment or payments shall amount in theaggregate to the penalty of the bond, but inno event shall the Surety’s obligation here-under exceed the amount of said penalty.The Surety agrees to furnish written noticeto the Federal Maritime Commission forth-with of all suits filed, judgments rendered,and payments made by said Surety underthis bond.

This bond is effective the —— day of————, 19—, 12:01 a.m., standard time at theaddress of the Principal as stated herein andshall continue in force until terminated ashereinafter provided. The Principal or theSurety may at any time terminate this bondby written notice sent by certified mail tothe other and to the Federal Maritime Com-mission at its office in Washington, D.C.,such termination to become effective thirty(30) days after actual receipt of said noticeby the Commission, except that no such ter-mination shall become effective while a voy-age is in progress. The Surety shall not beliable hereunder for any refunds due underticket contracts made by the Principal forthe supplying of transportation and otherservices after the termination of this bond asherein provided, but such termination shallnot affect the liability of the Surety here-under for refunds arising from ticket con-tracts made by the Principal for the supply-ing of transportation and other servicesprior to the date such termination becomeseffective.

In witness whereof, the said Principal andSurety have executed this instrument on—— day of ————, 19—.

PRINCIPAL

Name ————————————————————By —————————————————————

(Signature and title)Witness ———————————————————

SURETY

[SEAL] Name ———————————————By ——————————————————————


Only corporations or associations of indi-vidual insurers may qualify to act as surety,and they must establish to the satisfactionof the Federal Maritime Commission legalauthority to assume the obligations of sur-ety and financial ability to discharge them.

FORM FMC–133A


Guaranty No. ————FMC Certificate No. ————

GUARANTY IN RESPECT OF LIABILITY FORNONPERFORMANCE, SECTION 3 OF THE ACT

1. Whereas —————— (Name of applicant)(Hereinafter referred to as the ‘‘Applicant’’)is the Owner or Charterer of the passengerVessel(s) specified in the annexed Schedule(‘‘the Vessels’’), which are or may becomeengaged in voyages to or from United Statesports, and the Applicant desires to establishits financial responsibility in accordancewith section 3 of Pub. L. 89–777, 89th Con-gress, approved November 6, 1966 (‘‘the Act’’)then, provided that the Federal MaritimeCommission (‘‘FMC’’) shall have accepted, assufficient for that purpose, the Applicant’sapplication, supported by this Guaranty, andprovided that FMC shall issue to the Appli-cant a Certificate (Performance) (‘‘Certifi-cate’’), the undersigned Guarantor herebyguarantees to discharge the Applicant’s legalliability to indemnify the passengers of theVessels for nonperformance of transpor-tation within the meaning of section 3 of theAct, in the event that such legal liability hasnot been discharged by the Applicant within21 days after any such passenger has ob-tained a final judgment (after appeal, if any)against the Applicant from a United StatesFederal or State Court of competent juris-diction, or has become entitled to paymentof a specified sum by virtue of a compromisesettlement agreement made with the Appli-cant, with the approval of the Guarantor,whereby, upon payment of the agreed sum,the Applicant is to be fully, irrevocably andunconditionally discharged from all furtherliability to such passenger for such non-performance.

2. The Guarantor’s liability under thisGuaranty in respect to any passenger shallnot exceed the amount paid by such pas-senger; and the aggregate amount of theGuarantor’s liability under this Guarantyshall not exceed $———.

3. The Guarantor’s liability under thisGuaranty shall attach only in respect ofevents giving rise to a cause of actionagainst the Applicant, in respect of any ofthe Vessels, for nonperformance of transpor-tation within the meaning of Section 3 of theAct, occurring after the Certificate has beengranted to the Applicant, and before the ex-piration date of this Guaranty, which shallbe the earlier of the following dates:

(a) The date whereon the Certificate iswithdrawn, or for any reason becomes in-valid or ineffective; or

(b) The date 30 days after the date of re-ceipt by FMC of notice in writing (including


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46 CFR Ch. IV (10–1–96 Edition)Pt. 540, Subpt. A, App. A

telex or cable) that the Guarantor has elect-ed to terminate this Guaranty except that:

(i) If, on the date which would otherwisehave been the expiration date under the fore-going provisions (a) or (b) of this Clause 3,any of the Vessels is on a voyage whereonpassengers have been embarked at a UnitedStates port, then the expiration date of thisGuaranty shall, in respect of such Vessel, bepostponed to the date on which the last pas-senger on such voyage shall have finally dis-embarked; and

(ii) Such termination shall not affect theliability of the Guarantor for refunds arisingfrom ticket contracts made by the Applicantfor the supplying of transportation and otherservices prior to the date such terminationbecomes effective.

4. If, during the currency of this Guaranty,the Applicant requests that a vessel ownedor operated by the Applicant, and not speci-fied in the annexed Schedule, should becomesubject to this Guaranty, and if the Guaran-tor accedes to such request and so notifiesFMC in writing (including telex or cable),then, provided that within 30 days of receiptof such notice, FMC shall have granted aCertificate, such Vessel shall thereupon bedeemed to be one of the Vessels included inthe said Schedule and subject to this Guar-anty.

5. The Guarantor hereby designates——————, with offices at ——————, asthe Guarantor’s legal agent for service ofprocess for the purposes of the Rules of theFederal Maritime Commission, subpart A ofpart 540 of title 46, Code of Federal Regula-tions, issued under Section 3 of Pub. L. 89–777(80 Stat. 1357, 1358), entitled ‘‘Security forthe Protection of the Public.’’————————————————————————

(Place and Date of Execution)————————————————————————

(Type Name of Guarantor)————————————————————————

(Type Address of Guarantor)By ——————————————————————

(Signature and Title)

Schedule of Vessels Referred to in Clause 1

Vessels Added to This Schedule in AccordanceWith Clause 4

APPENDIX A—EXAMPLE OF ESCROWAGREEMENT FOR USE UNDER 46 CFR540.5(b)

Escrow Agreement

1. Legal name(s), state(s) of incorporation,description of business(es), trade name(s) ifany, and domicile(s) of each party.

2. Whereas, [name of the passenger vesseloperator] (‘‘Operator’’) and/or [name of theissuer of the passenger ticket] (‘‘Ticket Is-suer’’) wish(es) to establish an escrow ac-count to provide for the indemnification of

certain of its passengers utilizing [name ves-sel(s)] in the event of nonperformance oftransportation to which such passengerswould be entitled, and to establish the Oper-ator’s and/or Ticket Issuer’s financial re-sponsibility therefor; and

3. Whereas, [name of escrow agent] (‘‘theEscrow Agent’’) wishes to act as the escrowagent of the escrow account establishedhereunder.

4. The Operator and/or Ticket Issuer willdetermine, as of the day prior to the openingdate, the total amounts of U.S. unearnedpassenger revenues (‘‘UPR’’) which it had inits possession. Unearned passenger revenuesare defined as [incorporate the elements of 46CFR 540.2(i)].

5. The Operator and/or Ticket Issuer shallon the opening date deposit an amount equalto UPR as determined above, plus a cashamount equal to [amount equal to no lessthan 10% of the Operator’s and/or Ticket Is-suer’s UPR on the date within the 2 fiscalyears immediately prior to the filing of theescrow agreement which reflects the greatestamount of UPR, except that the Commis-sion, for good cause shown, may consider atime period other than the previous 2-fiscal-year requirement or other methods accept-able to the Commission to determine theamount of coverage required] (‘‘initial de-posit’’).

6. The Operator and/or Ticket Issuer mayat any time deposit additional funds into theaccount.

7. The Operator and/or Ticket Issuer shall,at the end of each business week, recomputeUPR by first computing:

A. the amount by which UPR has decreaseddue to: (1) Refunds due to cancellations; (2)amount of cancellation fees assessed in con-nection with (1) above; and (3) the amountearned from completed cruises; and

B. the amount by which UPR has increaseddue to receipts from passengers for futurewater transportation and all other relatedaccommodations and services not yet per-formed.

The difference between the above amountsis the amount by which UPR has increasedor decreased (‘‘new UPR’’). If the new UPRplus the amount of the initial deposit ex-ceeds the amount in the escrow account, theOperator and/or Ticket Issuer shall depositthe funds necessary to make the account bal-ance equal to UPR plus the initial deposit. Ifthe account balance exceeds new UPR plusthe initial deposit, the balance shall beavailable to the Operator and/or Ticket Is-suer. The information computed in para-graph 7 shall be furnished to the Commissionand the Escrow Agent in the form of a re-computation certificate signed and certifiedby a competent officer of the Operator and/orTicket Issuer. Copies sent to the Commissionare to be addressed to the Director, Bureau


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Federal Maritime Commission Pt. 540, Subpt. A, App. A

of Tariffs, Certification and Licensing, Fed-eral Maritime Commission, Washington, D.C.20573.

8. A monthly report shall be prepared bythe Escrow Agent and provided to the Opera-tor and/or Ticket Issuer and the Commissionwithin 15 days of the end of each month andshall list the investment assets of the ac-count, their original cost, their current mar-ket value, and the beginning and ending bal-ance of the account.

9. The Operator’s and/or Ticket Issuer’sindependent auditors shall prepare quarterlyreports, such reports to be furnished to theEscrow Agent and the Commission, and anyshortfall is to be covered within one businessday.

10. The Escrow Agent shall invest the fundsof the account in qualified investments as di-rected by the Operator and/or Ticket Issuer.Some examples of qualified investments are,to the extent permitted by law:

(a) Government obligations of the UnitedStates or its agencies;

(b) Certificates of deposit, time deposits oracceptances of any bank, savings institutionor trust company whose debt obligations arein the two highest categories rated by Stand-ard and Poor’s or Moody’s, or which is itselfrated in the two highest categories by Keefe,Bryette and Woods;

(c) Commercial paper similarly rated;(d) Certificates or time deposits issued by

any bank, savings institution or trust com-pany when fully insured by the FDIC or theFSLIC;

(e) Money market funds utilizing securitiesof the same quality as above; and/or

(f) Corporate bonds of the three highestcategories, as rated by Standard and Poor’sor Moody’s.

11. Income derived from the investmentsshall be credited to the escrow account.

12. The purpose of the escrow agreement isto establish the financial responsibility ofthe Operator and/or Ticket Issuer pursuantto section 3 of Public Law 89–777, approvedNovember 5, 1966, and the account is to beutilized to discharge the Operator’s and/orTicket Issuer’s legal liability to indemnifypassengers for nonperformance of transpor-tation via the [name of vessel(s)]. The Es-crow Agent is to make such payments on in-structions from the Operator and/or TicketIssuer, or, in the absence of such instruc-tions, 21 says after final judgment againstthe Operator and/or Ticket Issuer in a U.S.Federal or State court having jurisdiction.The Operator and/or Ticket Issuer willpledge to each passenger holding a ticket for

future passage on the Operator’s/Ticket Issu-er’s vessel(s) an interest in the Escrow Ac-count equal to the Fares amount shown onthe face of such ticket. The Escrow Agentagrees to act as nominee for each passengeruntil transportation is performed or untilpassenger has been compensated.

13. Escrow Agent shall waive right to off-set.

14. The Operator and/or Ticket Issuer willindemnify and hold Escrow Agent harmless.

15. Statement of the parties’ agreementconcerning warranty of bona fides by the Op-erator and/or Ticket Issuer and EscrowAgent.

16. Statement of the parties’ agreementconcerning fees to be paid by the Operatorand/or Ticket Issuer to Escrow Agent, reim-bursable expenses to be paid by the Operatorand/or Ticket Issuer to Escrow Agent. Astatement that fees for subsequent terms ofagreement are to be negotiated.

17. Statement of the parties’ agreementconcerning the term of agreement and re-newal/termination procedures.

18. Statement of the parties’ agreementconcerning procedures for appointment ofsuccessor Escrow Agent.

19. Statement that disposition of funds ontermination shall be to the Operator and/orTicket Issuer, if evidence of the Commis-sion’s acceptance of alternative evidence offinancial responsibility is furnished; other-wise, all passage fares held for uncompletedvoyages are to be returned to the passengers.The Operator and/or Ticket Issuer shall payall fees previously earned to the EscrowAgent.

20. The agreement may be enforced by thepassengers, the Escrow Agent, the Operatorand/or Ticket Issuer or by the Federal Mari-time Commission.

21. All assets maintained under the escrowagreement shall be physically located in theUnited Sates and may not be transferred,sold, assigned, encumbered, etc., except asprovided in the agreement.

22. The Commission has the right to exam-ine the books and records of the Operatorand/or Ticket Issuer and the Escrow Agent,as related to the escrow account, and theagreement may not be modified unlessagreed in writing by the Operator and/orTicket Issuer and Escrow Agent and ap-proved in writing by the Commission.

[57 FR 41891, Sept. 14, 1992]


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46 CFR Ch. IV (10–1–96 Edition)Pt. 540, Subpt. A, App.A

Subpart B—Proof of Financial Re-sponsibility, Bonding and Cer-tification of Financial Respon-sibility to Meet Liability In-curred for Death or Injury toPassengers or Other Personson Voyages

§ 540.20 Scope.The regulations contained in this

subpart set forth the procedures where-by owners or charterers of vessels hav-ing berth or stateroom accommoda-tions for 50 or more passengers and em-barking passengers at U.S. ports shallestablish their financial responsibilityto meet any liability which may be in-curred for death or injury to pas-sengers or other persons on voyages toor from U.S. ports. Included also arethe qualifications required by the Com-mission for issuance of a Certificate(Casualty) and the basis for the denial,revocation, suspension, or modificationof such Certificates.

§ 540.21 Definitions.As used in this subpart, the following

terms shall have the following mean-ings:

(a) Person includes individuals, cor-porations, partnerships, associations,and other legal entities existing underor authorized by the laws of the UnitedStates or any state thereof or the Dis-trict of Columbia, the Commonwealthof Puerto Rico, the Virgin Islands orany territory or possession of the Unit-ed States, or the laws of any foreigncountry.

(b) Vessel means any commercial ves-sel having berth or stateroom accom-modations for 50 or more passengersand embarking passengers at U.S.ports.


(d) United States includes the Com-monwealth of Puerto Rico, the VirginIslands or any territory or possessionof the United States.

(e) Berth or stateroom accommodationsor passenger accommodations includesall temporary and all permanent pas-senger sleeping facilities.

(f) Certificate (Casualty) means a Cer-tificate of Financial Responsibility toMeet Liability Incurred for Death or

Injury to Passengers or Other Personson Voyages issued pursuant to this sub-part.

(g) Voyage means voyage of a vesselto or from U.S. ports.

(h) Insurer means any insurance com-pany, underwriter, corporation or asso-ciation of underwriters, ship owners’protection and indemnity association,or other insurer acceptable to the Com-mission.

(i) Evidence of insurance means a pol-icy, certificate of insurance, covernote, or other evidence of coverage ac-ceptable to the Commission.

(j) For the purpose of determiningcompliance with § 540.22, passengers em-barking at United States ports means anypersons, not necessary to the business,operation, or navigation of a vessel,whether holding a ticket or not, whoboard a vessel at a port or place in theUnited States and are carried by thevessel on a voyage from that port orplace.


No vessel shall embark passengers atU.S. ports unless a Certificate (Cas-ualty) has been issued to or covers theowner or charterer of such vessel.

§ 540.23 Procedure for establishing fi-nancial responsibility.

(a) In order to comply with section 2of Pub. L. 89–777 (80 Stat. 1357, 1358) en-acted November 6, 1966, there must befiled an Application on Form FMC–131for a Certificate of Financial Respon-sibility to Meet Liability Incurred forDeath or Injury to Passengers or OtherPersons on Voyages. Copies of FormFMC–131 may be obtained from theSecretary, Federal Maritime Commis-sion, Washington, DC 20573, or at theCommission’s offices at New York, NY;New Orleans, LA; San Francisco, CA;Miami, FL; Los Angeles, CA; Hato Rey,PR; and Chicago, IL.

(b) An application for a Certificate(Casualty) shall be filed in duplicatewith the Secretary, Federal MaritimeCommission, by the vessel owner orcharterer at least 60 days in advance ofthe sailing. Late filing of the applica-tion will be permitted only for goodcause shown. All applications and evi-dence required to be filed with the


229


Commission shall be in English, andany monetary terms shall be expressedin terms of U.S. currency. The Com-mission shall have the privilege of veri-fying any statements made or any evi-dence submitted under the rules of thissubpart. An application for a Certifi-cate (Casualty) shall be accompaniedby a filing fee remittance of $830.

(c) The application shall be signed bya duly authorized officer orrepresenative of the applicant with acopy of evidence of his authority. Inthe event of any material change in thefacts as reflected in the application, anamendment to the application shall befiled no later than five (5) days follow-ing such change. For the purpose ofthis subpart, a material change shallbe one which: (1) Results in a decreasein the amount submitted to establishfinancial responsibility to a level belowthat required to be maintained underthe rules of this subpart, or (2) requiresthat the amount to be maintained beincreased above the amount submittedto establish financial responsibility.Notice of the application for, issuance,denial, revocation, suspension, ormodification of any such Certificateshall be published in the FEDERAL REG-ISTER.


§ 540.24 Insurance, surety bonds, self-insurance, guaranties, and escrowaccounts.

Evidence of adequate financial re-sponsibility for the purposes of thissubpart may be established by one ofthe following methods:

(a) Filing with the Commission evi-dence of insurance issued by an insurerproviding coverage for liability whichmay be incurred for death or injury topassengers or other persons on voyagesin an amount based upon the number ofpassenger accommodations aboard thevessel, calculated as follows:

Twenty thousand dollars for each passengeraccommodation up to and including 500;plus

Fifteen thousand dollars for each additionalpassenger accommodation between 501 and1,000; plus

Ten thousand dollars for each additional pas-senger accommodation between 1,001 and1,500; plus

Five thousand dollars for each passenger ac-commodation in excess of 1,500;

Except that, if the applicant is operat-ing more than one vessel subject tothis subpart, the amount prescribed bythis paragraph shall be based upon thenumber of passenger accommodationson the vessel being so operated whichhas the largest number of passenger ac-commodations.

(1) Termination or cancellation ofthe evidence of insurance, whether bythe assured or by the insurer, andwhether for nonpayment of premiums,calls or assessments, or for othercause, shall not be effected: (i) Untilnotice in writing has been given to theassured or to the insurer and to theSecretary of the Commission at its of-fice in Washington, DC 20573, by cer-tified mail, and (ii) until after 30 daysexpire from the date notice is actuallyreceived by the Commissioner, or untilafter the Commission revokes the Cer-tificate (Casualty), whichever occursfirst. Notice of termination or can-cellation to the assured or insurer shallbe simultaneous to such notice givento the Commission. The insurer shallremain liable for claims covered bysaid evidence of insurance arising byvirtue of an event which had occurredprior to the effective date of said ter-mination or cancellation. No such ter-mination or cancellation shall becomeeffective while a voyage is in progress.

(2) The insolvency or bankruptcy ofthe assured shall not constitute a de-fense to the insurer as to claims in-cluded in said evidence of insuranceand in the event of said insolvency orbankruptcy, the insurer agrees to payany unsatisfied final judgments ob-tained on such claims.

(3) No insurance shall be acceptableunder these rules which restricts the li-ability of the insurer where privity ofthe owner or charterer has been shownto exist.

(4) Paragraphs (a)(1) through (a)(3) ofthis section shall apply to the guar-anty as specified in paragraph (d) ofthis section.

(b) Filing with the Commission a sur-ety bond on Form FMC–132B issued bya bonding company authorized to do


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46 CFR Ch. IV (10–1–96 Edition)§ 540.25

business in the United States and ac-ceptable to the Commission. Such sur-ety bond shall evidence coverage for li-ability which may be incurred fordeath or injury to passengers or otherpersons on voyages in an amount cal-culated as in paragraph (a) of this sec-tion, and shall not be terminated whilea voyage is in progress. The require-ments of Form FMC–132B, however,may be amended by the Commission ina particular case for good cause.

(c) Filing with the Commission forqualification as a self-insurer such evi-dence acceptable to the Commission aswill demonstrate continued and stablepassenger operations over an extendedperiod of time in the foreign or domes-tic trade of the United States. In addi-tion, applicant must demonstrate fi-nancial responsibility by maintenanceof working capital and net worth, eachin an amount calculated as in para-graph (a) of this section. The Commis-sion will take into consideration allcurrent contractual requirements withrespect to the maintenance of workingcapital and/or net worth to which theapplicant is bound. Evidence must besubmitted that the working capital andnet worth required above are phys-ically located in the United States.This evidence of financial responsibil-ity shall be supported by and subject tothe following which are to be submit-ted on a continuing basis for each yearor portion thereof while the Certificate(Casualty) is in effect:

(1) A current quarterly balance sheet,except that the Commission, for goodcause shown, may require only an an-nual balance sheet;

(2) A current quarterly statement ofincome and surplus except that theCommission, for good cause shown,may require only an annual statementof income and surplus;

(3) An annual current balance sheetand an annual current statement of in-come and surplus to be certified by ap-propriate certified public accountants;

(4) An annual current statement ofthe book value or current market valueof any assets physically located withinthe United States together with a cer-tification as to the existence andamount of any encumbrances thereon;

(5) An annual current credit ratingreport by Dun and Bradstreet or any

similar concern found acceptable tothe Commission;

(6) A list of all contractual require-ments or other encumbrances (and towhom the applicant is bound in this re-gard) relating to the maintenance ofworking capital and net worth;

(7) All financial statements requiredto be submitted under this sectionshall be due within a reasonable timeafter the close of each pertinent ac-counting period;

(8) Such additional evidence of finan-cial responsibility as the Commissionmay deem necessary in appropriatecases.

(d) Filing with the Commission aguaranty on Form FMC–133B by a guar-antor acceptable to the Commission.Any such guaranty shall be in anamount calculated as in paragraph (a)of this section. The requirements ofForm FMC–133B, however, may beamended by the Commission in a par-ticular case for good cause.

(e) Filing with the Commission evi-dence of an escrow account, acceptableto the Commission, the amount of suchaccount to be calculated as in para-graph (a) of this section.

(f) The Commission will, for goodcause shown, consider any combinationof the alternatives described in para-graphs (a) through (e) of this sectionfor the purpose of establishing finan-cial responsibility.

[49 FR 36313, Sept. 14, 1984, as amended at 55FR 1824, Jan. 19, 1990]

§ 540.25 Evidence of financial respon-sibility.

Where satisfactory proof of financialresponsibility has been established, aCertificate (Casualty) covering speci-fied vessels shall be issued evidencingthe Commission’s finding of adequatefinancial responsibility to meet any li-ability which may be incurred fordeath or injury to passengers or otherpersons on voyages. The period coveredby the certificate shall be indetermi-nate unless a termination date hasbeen specified therein.

§ 540.26 Denial, revocation, suspen-sion, or modification.

(a) Prior to the denial, revocation,suspension, or modification of a Cer-tificate (Casualty), the Commission


231


shall advise the applicant of its inten-tion to deny, revoke, suspend, or mod-ify, and shall state the reasons there-for. If the applicant, within 20 daysafter the receipt of such advice, re-quests a hearing to show that the evi-dence of financial responsibility filedwith the Commission does meet therules of this subpart, such hearingshall be granted by the Commission,except that a Certificate (Casualty)shall become null and void upon can-cellation or termination of evidence ofinsurance, surety bond, guaranty, orescrow account.

(b) A Certificate (Casualty) may bedenied, revoked, suspended, or modifiedfor any of the following reasons:

(1) Making any willfully false state-ment to the Commission in connectionwith an application for a Certificate(Casualty);

(2) Circumstances whereby the partydoes not qualify as financially respon-sible in accordance with the require-ments of the Commission;

(3) Failure to comply with or respondto lawful inquiries, rules, regulations,or orders of the Commission pursuantto the rules of this subpart.

(c) If the applicant, within 20 daysafter notice of the proposed denial, rev-ocation, suspension, or modificationunder paragraph (b) of this section, re-quests a hearing to show that such de-nial, revocation, suspension, or modi-fication should not take place, suchhearing shall be granted by the Com-mission.

§ 540.27 Miscellaneous.(a) If any evidence filed with the ap-

plication does not comply with the re-quirements of this subpart, or for anyreason, fails to provide adequate or sat-isfactory protection to the public, theCommission will notify the applicantstating the deficiencies thereof.

(b) Any financial evidence submittedto the Commission under the rules ofthis subpart shall be written in the fulland correct name of the person towhom the Certificate (Casualty) is tobe issued, and in case of a partnership,all partners shall be named.

(c) The Commission’s bond (FormFMC–132B), guaranty (Form FMC–133B), and application (Form FMC–131as set forth in subpart A of this part)

forms are hereby incorporated as a partof the rules of this subpart. Any suchforms filed with the Commission underthis subpart must be in duplicate.

(d) Any securities or assets acceptedby the Commission (from applicants,insurers, guarantors, escrow agents, orothers) under the rules of this subpartmust be physically located in the Unit-ed States.

(e) Each applicant, insurer, escrowagent, and guarantor shall furnish awritten designation of a person in theUnited States as legal agent for serviceof process for the purposes of the rulesof this subpart. Such designation mustbe acknowledged, in writing, by thedesignee. In any instance in which thedesignated agent cannot be served be-cause of death, disability, or unavail-ability, the Secretary, Federal Mari-time Commission, will be deemed to bethe agent for service of process. Aparty serving the Secretary in accord-ance with the above provision mustalso serve the certificant, insurer, es-crow agent, or guarantor, as the casemay be, by registered mail, at its lastknown address on file with the Com-mission.

(f) In the case of any charter arrange-ments involving a vessel subject to theregulations of this subpart, the vesselowner (in the event of a subcharter, thecharterer shall file) must within 10days file with the Secretary of theCommission evidence of any such ar-rangement.

(g) Financial data filed in connectionwith the rules of this subpart shall beconfidential except in instances whereinformation becomes relevant in con-nection with hearings which may be re-quested by applicant pursuant to§ 540.26(a) or § 540.26(b).

(h) Every person who has been issueda Certificate (Casualty) must submit tothe Commission a semiannual state-ment of any changes that have takenplace with respect to the informationcontained in the application or docu-ments submitted in support thereof.Negative statements are required to in-dicate no change. Such statementsmust cover every such 6-month periodcommencing with the first 6-month pe-riod of the fiscal year immediately sub-sequent to the date of the issuance ofthe Certificate (Casualty). In addition,


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46 CFR Ch. IV (10–1–96 Edition)Pt. 540, Subpt. B, Form FMC–132B

the statements will be due within 30days after the close of every 6-monthperiod.

FORM FMC–132B

(5–67)


Surety Co. Bond No. ——————FMC Certificate No. ——————

PASSENGER VESSEL SURETY BOND (46 CFRPART 540)

Know all men by these presents, that We—————— (Name of applicant), of —————(City), —————— (State and country), asPrincipal (hereinafter called Principal), and—————— (Name of surety), a company cre-ated and existing under the laws of—————— (State and country) and author-ized to do business in the United States, asSurety (hereinafter called Surety) are heldand firmly bound unto the United States ofAmerica in the penal sum of ——————, forwhich payment, well and truly to be made,we bind ourselves and our heirs, executors,administrators, successors, and assigns,jointly and severally, firmly by these pre-sents.

Whereas, the Principal intends to become aholder of a Certificate (Casualty) pursuant tothe provisions of subpart B of part 540 oftitle 46, Code of Federal Regulations, and haselected to file with the Federal MaritimeCommission such a bond to insure financialresponsibility to meet any liability it mayincur for death or injury to passengers orother persons on voyages to or from U.S.ports, and

Whereas, this bond is written to assurecompliance by the Principal as an authorizedholder of a Certificate (Casualty) pursuant tosubpart B of part 540 of title 46, Code of Fed-eral Regulations, and shall inure to the bene-fit of any and all passengers or other personsto whom the Principal may be held legallyliable for any of the damages herein de-scribed.

Now, therefore, the condition of this obli-gation is such that if the Principal shall payor cause to be paid to passengers or otherpersons any sum or sums for which the Prin-cipal may be held legally liable by reason ofthe Principal’s failure faithfully to meet anyliability the Principal may incur for death orinjury to passengers or other persons on voy-ages to or from U.S. ports, while this bond isin effect pursuant to and in accordance withthe provisions of subpart B of part 540 oftitle 46, Code of Federal Regulations, thenthis obligation shall be void, otherwise, toremain in full force and effect.

The liability of the Surety with respect toany passenger or other persons shall in noevent exceed the amount of the Principal’s

legal liability under any final judgment orsettlement agreement, except that, if the ag-gregate amount of such judgments and set-tlements exceeds an amount computed in ac-cordance with the formula contained in sec-tion 2(a) of Pub. L. 89–777, then the Surety’stotal liability under this surety bond shallbe limited to an amount computed in accord-ance with such formula.

The Surety agrees to furnish written no-tice to the Federal Maritime Commissionforthwith of all suits filed, judgments ren-dered, and payments made by said Suretyunder this bond.

This bond is effective the —— day of————, 19—, 12:01 a.m., standard time, atthe address of the Principal as stated hereinand shall continue in force until terminatedas hereinafter provided. The Principal or theSurety may at any time terminate this bondby written notice sent by certified mail tothe other and to the Federal Maritime Com-mission at its Office in Washington, D.C.,such termination to become effective thirty(30) days after actual receipt of said noticeby the Commission, except that no such ter-mination shall become effective while a voy-age is in progress. The Surety shall not beliable hereunder for any liability incurredfor death or injury to passengers or otherpersons on voyages to or from U.S. portsafter the termination of this bond as hereinprovided, but such termination shall not af-fect the liability of the Surety hereunder forsuch liability incurred for death or injury topassengers or other persons on voyages to orfrom U.S. ports prior to the date such termi-nation becomes effective.

In witness whereof, the said Principal andSurety have executed this instrument on the—— day of ————, 19—.

PRINCIPAL

Name ————————————————————By ——————————————————————


SURETY

Name ————————————————————By [SEAL] —————————————————


Only corporations or associations of indi-vidual insurers may qualify to act as Surety,and they must establish to the satisfactionof the Federal Maritime Commission legalauthority to assume the obligations of sur-ety and financial ability to discharge them.

FORM FMC–133B

(5–67)


Guaranty No. ————————————————


233


FMC Certificate No. ————————————

GUARANTY IN RESPECT OF LIABILITY FORDEATH OR INJURY, SECTION 2 OF THE ACT

1. Whereas —————— (Name of Applicant)(Hereinafter referred to as the ‘‘Applicant’’)is the Owner or Charterer of the passengerVessel(s) specified in the annexed Schedule(‘‘the Vessels’’), which are or may becomeengaged in voyages to or from U.S. ports,and the Applicant desires to establish its fi-nancial responsibility in accordance withsection 2 of Public Law 89–777, 89th Congress,approved November 6, 1966 (‘‘the Act’’) then,provided that the Federal Maritime Commis-sion (‘‘FMC’’) shall have accepted, as suffi-cient for that purpose, the Applicant’s appli-cation, supported by this Guaranty, and pro-vided that FMC shall issue to the Applicanta Certificate (Casualty) (‘‘Certificate’’), theundersigned Guarantor hereby guarantees todischarge the applicant’s legal liability inrespect of claims for damages for death or in-jury to passengers or other persons on voy-ages of the Vessels to or from U.S. ports, inthe event that such legal liability has notbeen discharged by the Applicant within 21days after any such passenger or other per-son, or, in the event of death, his or her per-sonal representative, has obtained a finaljudgment (after appeal, if any) against theApplicant from a U.S. Federal or State Courtof competent jurisdiction, or has become en-titled to payment of a specified sum by vir-tue of a compromise settlement agreementmade with the Applicant, with the approvalof the Guarantor, whereby, upon payment ofthe agreed sum, the Applicant is to be fully,irrevocably and unconditionally dischargedfrom all further liability to such passengeror other person, or to such personal rep-resentative, with respect to such claim.

2. The Guarantor’s liability under thisGuaranty shall in no event exceed theamount of the Applicant’s legal liabilityunder any such judgment or settlementagreement, except that, if the aggregateamount of such judgments and settlementsexceeds an amount computed in accordancewith the formula contained in section 2(a) ofthe Act, then the Guarantor’s total liabilityunder this Guaranty shall be limited to anamount computed in accordance with suchformula.

3. The Guarantor’s liability under thisGuaranty shall attach only in respect ofevents giving rise to causes of action againstthe Applicant in respect of any of the Vesselsfor damages for death or injury within themeaning of section 2 of the Act, occurringafter the Certificate has been granted to theApplicant and before the expiration date ofthis Guaranty, which shall be the earlier ofthe following dates:

(a) The date whereon the Certificate iswithdrawn, or for any reason becomes in-valid or ineffective; or

(b) The date 30 days after the date of re-ceipt by FMC of notice in writing (includingtelex or cable) that the Guarantor has elect-ed to terminate this Guaranty, except thatif, on the date which would otherwise havebeen the expiration date of this Guarantyunder the foregoing provisions of this Clause3, any of the Vessels is on a voyage in respectof which such Vessel would not have receivedclearance in accordance with section 2(e) ofthe Act without the Certificate, then the ex-piration date of this Guaranty shall, in re-spect of such Vessel, be postponed to thedate on which the last passenger on suchvoyage shall have fully disembarked.

4. If, during the currency of this Guaranty,the Applicant requests that a vessel ownedor operated by the Applicant, and not speci-fied in the annexed Schedule, should becomesubject to this Guaranty, and if the Guaran-tor accedes to such request and so notifiesFMC in writing (including telex or cable),then provided that, within 30 days of receiptof such notice FMC shall have granted a Cer-tificate, such vessel shall thereupon bedeemed to be one of the Vessels included inthe said Schedule and subject to this Guar-anty.

5. The Guarantor hereby designates——————, with offices at ——————, asthe Guarantor’s legal agent for Service ofprocess for the purposes of the Rules of theFederal Maritime Commission, subpart B ofpart 540 of title 46, Code of Federal Regula-tions, issued under section 2 of the Pub. L 89–777 (80 Stat. 1357, 1358), entitled ‘‘Security forthe Protection of the Public.’’————————————————————————

(Place and Date of Execution)————————————————————————

(Name and Guarantor)————————————————————————

(Address of Guarantor)By ——————————————————————

(Name and Title)

Schedule of Vessels Referred to in Clause 1

Vessels Added to This Schedule in AccordanceWith Clause 4

Subpart C—General


This section displays the controlnumbers assigned to information col-lection requirements of the Commis-sion in this part by the Office of Man-agement and Budget pursuant to thePaperwork Reduction Act of 1980, Pub-lic Law 96–511. The Commission intends


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46 CFR Ch. IV (10–1–96 Edition)§ 540.91

that this section comply with the re-quirements of section 3507(f) of the Pa-perwork Reduction Act, which requiresthat agencies display a current controlnumber assigned by the Director of theOffice of Management and Budget(OMB) for each agency information col-lection requirement:


540.4 (Form FMC–131) ................................. 3072–0012540.5 .............................................................. 3072–0011540.6 .............................................................. 3072–0011540.8 .............................................................. 3072–0011540.9 .............................................................. 3072–0011540.23 (Form FMC–131) ............................... 3072–0012540.24 ............................................................ 3072–0011540.26 ............................................................ 3072–0011540.27 ............................................................ 3072–0011


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SUBCHAPTER C—REGULATIONS AFFECTING MARITIME CAR-RIERS AND RELATED ACTIVITIES IN DOMESTIC OFFSHORECOMMERCE

PART 552—FINANCIAL REPORTS OFVESSEL OPERATING COMMONCARRIERS BY WATER IN THE DO-MESTIC OFFSHORE TRADES

Sec.552.1 Purpose.552.2 General requirements and fees.552.3 Certification.552.4 Access to and audit of records.552.5 Definitions.552.6 Forms.552.91 OMB control numbers assigned pursu-

ant to the Paperwork Reduction Act.AUTHORITY: 5 U.S.C. 553; 31 U.S.C. 9701; 46

U.S.C. app. 817(a), 820, 841a, 843, 844, 845, 845a,and 847.

SOURCE: 49 FR 38850, Oct. 1, 1984, unlessotherwise noted.

§ 552.1 Purpose.(a) The purpose of this part is to es-

tablish methodologies that the FederalMaritime Commission will utilize inevaluating the reasonableness of ratesin the domestic offshore trades filed byvessel operating common carriers(VOCCs) subject to the provisions ofthe Intercoastal Shipping Act, 1933 (46U.S.C. app. 843, 844, 845, 845(a) and 847)and to provide for the orderly acquisi-tion of data essential to this evalua-tion. Compliance is mandatory andfailure to file the reports requiredunder this part may result in denial ofrate increases or rejection of tariff lineitems implementing rate changes orpenalties of up to $100 for each day ofsuch default (46 U.S.C. app. 820(a)).

(b) In evaluating the reasonablenessof a VOCC’s overall level of rates, theCommission will use return on ratebase as its primary standard. A car-rier’s allowable rate of return on ratebase will be set equal to its before-taxweighted average cost of capital. How-ever, the Commission may also employthe other financial methodologies setforth in § 552.6(f) in order to achieve afair and reasonable result.

(c) In evaluating the reasonablenessof a carrier’s rates, the Commissionmay consider, in addition to the rate ofreturn of the filing carrier, the effectwhich approval or disapproval of the

rates will have on other carriers in theTrade.[59 FR 954, Jan. 7, 1994, as amended at 60 FR27230, May 23, 1995; 60 FR 46058, Sept. 5, 1995]

§ 552.2 General requirements and fees.(a) All persons engaged in common

carriage via cargo vessels in the do-mestic offshore trades (except personsengaged in intrastate operations inAlaska and Hawaii) and required by theIntercoastal Shipping Act, 1933, to filetariffs with the Commission, shall exe-cute and file, in duplicate, State of Fi-nancial and Operating Data (designatedas FMC Form No. 377 for tug and bargeoperators and FMC Form No. 378 forvessel operators) for each domestic off-shore trade served, with:Federal Maritime Commission, Bureau of Ec-onomics and Agreement Analysis, 800 NorthCapitol Street, NW, Washington, DC 20573–0001.

(b) Annual statements under thispart shall consist of Exhibits A, B, andC, as described in § 552.6, and shall befiled within 150 days after the close ofthe carrier’s fiscal year and be accom-panied by a company-wide balancesheet and income statement having atime period coinciding with that of theannual statements. A specific format isnot prescribed for the company-widestatements.

(c)(1) Upon application, the Commis-sion may grant reasonable extensionsof the time limit prescribed by thissection for filing the statements re-quired by this part, provided that:

(i) The application for extension isreceived at least 15 days before thestatements are due; and

(ii) The application states a specificdate on or before which the requiredstatements will be filed.

(2) The mere filing of an applicationfor an extension will not necessarilyact as a bar to the imposition of civilpenalties for failure to comply withCommission regulations. Even in caseswhere extensions are granted, the Com-mission may suspend and investigaterates filed during the extension period.


236

46 CFR Ch. IV (10–1–96 Edition)§ 552.2

(3) Applications shall be accompaniedby remittance of a $55 filing fee.

(d) Upon application, the Commissionmay relieve a carrier from full compli-ance with this part and permit it tosubmit alternative data as the Com-mission deems acceptable, providedthat:

(1) The application shows good causeand is accompanied by the data whichthe carrier proposes to submit in lieuof the required statements, or a de-scription of that data; and

(2) The Commission finds compliancewith this part unnecessary to fulfill itsregulatory functions.

(3) Applications shall be accompaniedby remittance of a $165 filing fee.

(e) Upon application, the Commissionshall grant a waiver of the detailed re-porting requirements to carriers whichhave earned gross revenues of $25 mil-lion or less for the reporting period ina particular Trade. The application forwaiver (exhibit D) must be accom-panied by a company-wide balancesheet and income statement. Thiswaiver provision is applicable to an-nual reporting requirements and to fil-ings of proposed rate changes in ac-cordance with § 552.2(f). Applicationsshall be accompanied by remittance ofa $103 filing fee.

(f) Whenever a carrier files with theCommission an increase in rates whichwould affect 50 percent or more of therate items listed in all of its tariffs ina particular Trade, and which increasein rates would result in either: an in-crease of not less than 3 percent in thecarrier’s gross revenues in that Trade,or in an increase of less than 3 percentin the carrier’s gross revenues in thatTrade, but, when aggregated with otherrate changes filed during the precedingtwelve months which have also re-sulted in increases of less than 3 per-cent in the carrier’s gross revenues inthat Trade, would result in an increaseof 9 percent or more in the carrier’sgross revenues in that Trade, then suchcarrier shall simultaneously file in du-plicate:

(1) Financial and operating data insupport of proposed rate changes as fol-lows:

(i) An actual midyear rate base ex-hibit (Exhibit A–a) and supportingschedules computed for a 12–month pe-

riod commencing not more than fifteen(15) months prior to the date of filingthe proposed rates;

(ii) A projected midyear rate base ex-hibit (Exhibit A–p) and supportingschedules computed for a 12–month pe-riod commencing on the first day ofthe month following the date on whichthe rate changes are proposed to be-come effective;

(iii) An actual income account ex-hibit (Exhibit B–a) and supportingschedules covering the 12-month periodused to calculate rate base in para-graph (f)(1)(i) of this section;

(iv) A projected income account ex-hibit (Exhibit B–p) and supportingschedules for the 12-month period com-mencing on the first day of the monthfollowing the date on which thechanged rates are proposed to becomeeffective (taking into account the ef-fect of the proposed rate changes);

(v) Actual and projected rate-of-returnexhibits (Exhibits C–a and C–p) coincid-ing with the time periods covered bythe income statements furnished in re-sponse to paragraphs (f)(1) (iii) and (iv)of this section; and

(vi) Projected schedules for capital-ization amounts and ratios (ScheduleF–I); cost of long-term debt capital cal-culation (Schedules F–II and F–III);cost of preferred (and preference) stockcapital calculation (Schedules F–IVand F–V); corporate income tax rate(Schedule F–VI); and flotation costs(Schedule F–VII) for the 12-month pe-riod used to compute projected mid-year rate base in paragraph (f)(1)(ii) ofthis section.

(2) The work papers described in§ 552.4.

(3) The filing of proposed ratechanges described in this paragraphshall be accompanied by remittance ofa $11,951 filing fee.

(g) If a carrier files proposed ratechanges within six (6) months after theend of its fiscal year, it may furnish itsannual report under this part for thefiscal year in lieu of the schedules ofactual data required in paragraphs(f)(1) (i) and (iii) of this section. The re-quirement to furnish schedules pertain-ing to future operations under the pro-posed rate changes would not be af-fected by this substitution.


237


(h) When a proposed rate change isfiled which does not meet the criteriaset forth in § 552.2(f), the following cer-tification shall be submitted simulta-neously with the tariff material:

Certification

I, [type or print name of officer] of [nameof reporting company] certify, under the pen-alties of 18 U.S.C. 1001, that the proposedrate increase submitted herewith is not re-quired by § 552.2(f) of 46 CFR part 552 to be ac-companied by the financial and operatingdata described therein.Signature: ——————————————————Title: ————————————————————Date: ————————————————————

(i) All financial and operating datafiled in connection with proposed ratechanges shall be made available to in-terested persons by the carrier upon re-quest.

(j) Where it is necessary to allocateproperty, revenue (except Net Passengerand Other Voyage revenue), costs or ex-penses, the allocation shall be on a di-rect basis. If this is not practicable, al-location shall be made in the mannerprescribed in § 552.6. However, if thegross revenue from Other Services doesnot exceed 5 percent of the total com-pany gross revenue, no allocation ofrevenue and expense between OtherServices and the Service (see definitions,paragraphs (a) and (b) of § 552.5) is re-quired by this part. Further, if thegross revenue from Other Cargo doesnot exceed 5 percent of the total grossrevenue from the Service, no allocationof revenue and expense between OtherCargo and The Trade (see definitions,paragraphs (c) and (e) of § 552.5) is re-quired.

(k) All carriers subject to these filingrequirements must comply fully withthe instructions outlined in this partfor the submission of specified data andwith the methods prescribed for itspreparation. A carrier may request re-lief from full compliance in accordancewith the provisions of paragraphs (d)and (e) of § 552.2. If a carrier has no in-formation to report on a requiredschedule, it must submit a blankschedule with the word ‘‘NONE’’ print-ed across its face.

(l) With respect to the annual state-ments required by this part, all datashown must conform or be reconciledto the figures listed in the balance

sheet and income statement filedtherewith.

(m) All percentage calculations re-quired by allocations herein shall becarried to two places beyond the deci-mal point (e.g., 97.54 percent).

(n) Whenever a carrier files an initialtariff, it shall simultaneously file acompany-wide balance sheet and in-come statement together with the datarequired in Exhibit E. If a carrier is op-erating in another domestic offshoretrade and has already filed the req-uisite annual data, only the data setforth in Exhibit E will be required.

(o) For the purpose of all reports re-quired under this part, a carrier mayemploy terminated voyage or periodaccounting, at its election, and shallidentify the method utilized. A carriermay change accounting methods forthe purpose of such reports only withthe prior written consent of the Com-mission.

(p) Related company assets employedin the Service shall be reported in thesame manner as owned assets. Otherintercompany transactions shall beshown net of intercompany profit andreported on the appropriate schedule.Any calculations involving intercom-pany accounts shall be included in theworking papers.

[49 FR 38850, Oct. 1, 1984, as amended at 58 FR13417, Mar. 11, 1993; 59 FR 63908, Dec. 12, 1994;59 FR 67230, Dec. 29, 1994; 60 FR 46058, Sept.5, 1995]

§ 552.3 Certification.

The data required by this part shallbe accompanied by a certification bythe corporate officer responsible forthe maintenance and accuracy of thebooks of account and financial recordsof the carrier, stating that:

(a) The books of account have beenmaintained in accordance with an ap-propriate system of accounts;

(b) The exhibits and schedules havebeen prepared from the regularly main-tained books and records of the carrier;

(c) The records so maintained con-form to, are reconciled to, or representthe actual financial data subject to theannual independent financial audit;

(d) The allocations have been madein accordance with the rules promul-gated in this part; and,


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46 CFR Ch. IV (10–1–96 Edition)§ 552.4

(e) The financial and statistical dataused are supported by an appropriateinformation gathering system havingproper internal controls which havebeen tested for accuracy.

§ 552.4 Access to and audit of records.(a) The carrier shall file with the

Commission all work papers, properlycross-referenced and indexed, whichwere prepared in support of the exhib-its and schedules. In addition, thebooks and records of the carrier andany related company whose financialdata is included in any of the exhibitsor schedules shall be made availablefor examination upon request by appro-priate Commission personnel. Commis-sion personnel shall be permitted tomake copies of these records to the ex-tent they deem necessary.

(b) For all proposed rate changes asdescribed in § 552.2(f), the carrier shallsubmit a detailed description of themethods employed in projecting reve-nues.

(c) All information obtained by theCommission pursuant to the provisionsof this part shall be withheld from pub-lic disclosure and shall be treated asconfidential information in the files ofthe Commission; except that any con-fidential information derived from anaudit may be utilized by the Commis-sion as the basis for a formal proceed-ing instituted pursuant to section 22 ofthe Shipping Act, 1916, and/or sections3 and 4 of the Intercoastal ShippingAct, 1933, and may also be utilized insuch a proceeding.

[49 FR 38850, Oct. 1, 1984, as amended at 50 FR32068, Aug. 8, 1985; 57 FR 44700, Sept. 29, 1992]

§ 552.5 Definitions.For the purpose of this part, the fol-

lowing terms are expressly limited tothe definitions listed below:

(a) Voyage means a completed roundtrip from port of origin and return toport of origin. A voyage cannot be splitto separately reflect outbound and in-bound services. However, when a vesselis reassigned to a new United Statesbasing point, then the voyage runsfrom the old United States port of ori-gin to the new United States port of or-igin. Should a vessel sail outbound inthe Service and then proceed to an-other service, the voyage will be con-

sidered to be terminated upon comple-tion of the offloading of the last cargoin the Service. Carriers which areparty to operating differential subsidycontracts may use Maritime Adminis-tration commencement and termi-nation guidelines for the purposes ofthis part.

(1) Voyages generally are consideredto be terminated on the completion ofthe latest occurring event of one of thefollowing:

(i) Crew paid off;(ii) Discharge of last inbound cargo;(iii) Completion of repairs (excluding

annual overhaul and emergency re-pairs); or

(iv) Midpoint in time of operations inwhich cargo is simultaneously on-load-ed and off-loaded.

(2) Usually voyage termination willbe considered to have happened at noonor midnight of the day on which the de-termining operation is completed. If acarrier has difficulty in applying thisdefinition of the word voyage to its op-erations, it may identify the method ituses to determine a voyage and explainthe reasons for this alternative defini-tion for the Commission’s consider-ation and approval.

(b) The service means those voyagesand/or terminal facilities in whichcargo subject to the Commission’s reg-ulation under 46 CFR 514.1(c)(2) is ei-ther carried or handled.

(c) The trade means that part of theService subject to the Commission’sregulation under 46 CFR 514.1(c)(2),more extensively defined below underDomestic Offshore Trade.

(d) Other services means thise voyagesor terminal facilities other than thoseof the relevant Service (e.g., a voyageto a foreign port on which no regulatedcargo was carried, or a terminal facil-ity in a foreign country).

(e) Other cargo means that part of theService not included in the Trade.

(f) Domestic offshore trade means thecarriage of common carrier cargounder the terms of a tariff(s) on filewith and regulated by the Commissionbetween any one of the five areas of theContinental United States listed inparagraph (f)(1) of this section and onenon-contiguous area of the UnitedStates (see paragraph (f)(2) of this sec-tion), or between two non-contiguous


239


areas of the United States. Where serv-ice is offered to or from two or moreareas at the same rates (e.g., AtlanticCoast to Puerto Rico and the Virgin Is-lands) and listed as such in a singletariff, the carriage of cargo to or fromthose two or more areas may be treat-ed as one domestic offshore trade forthe purposes of this part.

(1) The five areas of the ContinentalUnited States are:

(i) North Atlantic (Maine to, but notincluding, Hatteras, North Carolina);

(ii) South Atlantic (Hatteras, NorthCarolina to, but not including, KeyWest, Florida);

(iii) Gulf (Key West, Florida to andincluding Brownsville, Texas);

(iv) West Coast; and(v) Great Lakes.(2) The non-contiguous areas of the

United States (including, but not lim-ited to those) to which service is of-fered under the terms of tariffs on filewith the Commission, are:

(i) American Samoa;(ii) Northern Marianas;(iii) Guam;(iv) Johnston Island;(v) Midway Island;(vi) Alaska;(vii) Hawaii;(viii) Puerto Rico;(ix) U.S. Virgin Islands; and(x) Wake Island.(g) Cargo vessel means a self-propelled

or non-self-propelled vessel whichtransports cargo, but not includingvessels which are authorized to carrymore than 12 passengers.

(h) Cargo cube means the product ofthe outside dimensions of a unit ofcargo expressed in cubic feet. In com-puting cargo cube for containerizedcargo, the outside dimensions of thecontainer, trailer or other equipmentshall be used. The height of equipmentmoving on wheels shall be measuredfrom the ground to the highest pointon the equipment. Empty equipment,such as containers, shall be included inthe computation of cargo cube only ifit is a revenue-producing unit of cargo.Where an operator finds it more con-venient to accumulate such data interms of twenty-foot equivalent units(TEU’s) or metric quantities, theseunits may be used instead of cargocube in all instances where cargo cube

is cited in this part. Where any of theseoptions are exercised, the operatorshall modify the headings on the pre-scribed reporting forms to indicate theunits in which the data is being re-ported and shall convert the data toTEU’s where so provided in the sched-ules. For purposes of this part, carriersare not required to tape measure eachunit (e.g., container, trailer, box, car-ton). However, the computation ofcargo cube must be based upon carefulconsideration of all evidence availableto the carrier, including documents,the opinions of experienced operatingpersonnel, and sample measurements.In calculating the cube of containers,trailers, or other similar equipment,the carrier may assign a standardlength, width and height to a givenclass of equipment, provided that theactual dimensions of each piece ofequipment in the class vary no morethan a foot from the standard dimen-sions adopted.

(i) Measurement ton—Equals forty (40)cubic feet.

(j) Metric measurement ton—Equals35.31 cubic feet or 1 cubic meter.

(k) Twenty-foot equivalent unit(TEU)—Equals 1,280 cubic feet, based onthe standard 20′ x 8′ x 8′ container.

(l) Cargo cube relationship means theratio of total cargo cube for all cargocarried in the Trade to total cargo cubefor all cargo carried in the Service.

(m) Cargo cube miles means the prod-uct of the cargo cube carried betweeneach port of origin and destination,multiplied by the number of nauticalmiles representing the shortest navi-gable distance between the two portsas set forth in Distance Between Ports(Department of the Navy, Oceano-graphic Office), Distance Between UnitedStates Ports (U.S. Department of Com-merce, Coast and Geodetic Survey) or,if not listed in either of these publica-tions, as approved by the Commission.Where revenue derived from the car-riage of passengers and Other Servicesis treated as a reduction of costs under§ 552.6(c)(2)(iii), the cargo cube, if any,from which such revenue is derivedshall be omitted from the cargo-cubemile calculations required herein.

(n) Cargo-cube mile relationship meansthe ratio of cargo-cube miles for allcargo carried in the Trade to total


240

46 CFR Ch. IV (10–1–96 Edition)§ 552.6

cargo-cube miles for all cargo carriedin the Service. Because the total of allcargo-cube miles will normally involvea figure of considerable magnitude, thedata shall be submitted in terms ofthousands of cargo-cube miles. Wherethe service of the carrier is solely be-tween port pairs in the Trade, andwhere there are no significant mileagedifferences between all such port pairsand the ocean rates between all suchport pairs are identical, the cargo-cuberelationship may be used in lieu of thecargo-cube mile relationship.

(o) Voyage expense means:(1) For carriers required to file Form

FMC–378: the total of Vessel Operating,Vessel Port Call and Cargo HandlingExpenses less Other Shipping Oper-ations Revenue.

(2) For carriers required to file FormFMC–377: the total of Transportation,Terminal and Traffic Expenses.

(p) Voyage expense relationship meansthe ratio of total Trade Voyage Ex-pense to total Company Voyage Ex-pense.

(q) Related companies means compa-nies or persons that directly or indi-rectly (through one or moreintermediaries) control, or are con-trolled by, or are under common con-trol with, the reporting carrier. Theterm control shall include actual aswell as legal control, whether main-tained or exercised through (or by rea-son of) the circumstances surroundingorganizational structure or operation,through (or by) common directors, offi-cers, stockholders, voting trust(s),holding or investment company orcompanies, or through (or by) anyother direct or indirect means, includ-ing the power to exercise control.

(r) Initial tariff means the first filingof a tariff by a carrier in a specific do-mestic offshore trade, or the filing of atariff in a Trade where the carrier doesnot have an active tariff.

(s) Trade operating expense means thetotal of all expenses shown on ExhibitB (Income Account), including Federalincome taxes.

(t) Company operating expense meansthe total of all expenses shown on thecompany-wide income statement, in-cluding Federal income taxes.

(u) Operating expense relationshipmeans the ratio of Trade Operating Ex-

pense to total Company Operating Ex-pense.

(v) Book value means the value atwhich an asset is carried on a balancesheet.

(w) Capital structure means a compa-ny’s financial framework, which iscomposed of long-term debt, preferred(and preference) stock, and common-stock equity capital (par value plusearned and capital surplus).

(x) Capitalization ratio means the per-centage of a company’s capital struc-ture that is long-term debt, preferred(and preference) stock, and commonstock-equity capital.

(y) Consolidated system means a par-ent company and all of its subsidiaries.

(z) Subsidiary company means a com-pany of which more than 50 percent ofthe voting shares of stock are owned byanother corporation, called the parentcompany.

(aa) Long-term debt means a liabilitydue in a year or more.

(bb) Times-interest-earned ratio meansthe measure of the extent to which op-erating income can decline before afirm is unable to meet its annual inter-est costs. It is computed by dividing afirm’s earnings before interest andtaxes by the firm’s annual interest ex-pense.

[49 FR 38850, Oct. 1, 1984; 49 FR 42935, Oct. 25,1984, as amended at 50 FR 32068, Aug. 8, 1985;51 FR 17025, May 8, 1986; 60 FR 46058, Sept. 5,1995]

§ 552.6 Forms.(a) General. (1) The submission re-

quired by this part shall be submittedin the prescribed format and shall in-clude General Information regardingthe carrier, as well as the followingschedules as applicable:

Exhibit A—Rate Base and supporting sched-ules;

Exhibit B—Income Account and supportingschedules;

Exhibit C—Rate of Return and supportingschedules;

Exhibit D—Application for Waiver;Exhibit E—Initial Tariff Filing Supporting

Data; andExhibit F—Allowable Rate of Return sched-

ules.

(2) Statements containing the re-quired exhibits and schedules are de-scribed in paragraphs (b), (c), (d), (e),


241


(g), and (h) of this section and areavailable upon request from the Com-mission. The required General Informa-tion, schedules and exhibits are con-tained in Forms FMC–377 and FMC–378.For carriers required to file FormFMC–378, the statements are based onthe Uniform Financial Reporting Require-ments prescribed by the Maritime Ad-ministration, U.S. Department ofTransportation. For carriers requiredto file Form FMC–377, the statementsare based on definitions containedtherein. The schedules contained inthese statements are distinguishedfrom those contained in the FormFMC–378 statements by the suffix ‘A’’(e.g., Schedule A–IV(A)).

(b) Rate base (Exhibits A and A(A))—(1)Investment in vessels (Schedules A–I andA–I(A)). Each cargo vessel (excludingvessels chartered under leases whichare not capitalized in accordance with§ 552.6(b)(10)) employed in the Servicefor which a statement is filed shall belisted by name, showing the originalcost to the carrier or to any relatedcompany, plus the cost of improve-ments, conversions, and alterations,less the cost of any deductions. All ad-ditions and deductions made during theperiod shall be shown on a pro ratabasis, reflecting the number of daysthey were applicable during the period.The result of these computations shallbe called Adjusted Cost.

(i) The cargo vessels employed in theService shall be categorized and treat-ed separately as follows:

(A) For those cargo vessels employedexclusively in the Service for the en-tire period, inclusive of normal peri-odic lay-ups, the Adjusted Cost shall beincluded in the total to be allocated tothe Trade. If a vessel is permanentlywithdrawn from the Service during theperiod and laid-up pending dispositionand that vessel has been employed ex-clusively in the Service for the preced-ing 12 months, sixty days of the lay-upperiod may be assigned to the Service.If a vessel is withdrawn from the Serv-ice for renovation or converison, and ifthe carrier certifies that that vesselhas been employed exclusively in theService for the 12-month period imme-diately prior to withdrawal and will beemployed exclusively in the Service fora period of at least 12 months after the

renovation or conversion is completed,the Adjusted Cost shall be included inthe total to be allocated to the Trade.

(B) For those cargo vessels employedin the Service for less than the entireperiod, the Adjusted Cost shall be pro-rated between voyages in the Serviceand voyages in Other Services. Thetotal number of days of service ex-cludes lay-up days and is thereforelikely to be less than the number ofdays in the reporting period. Lay-updays of vessels in this category willnormally be allocated to the respectiveServices on the same basis used in allo-cating the Adjusted Cost of such ves-sels, i.e., active days. However, if oneor more of the vessels normally em-ployed in the Service has been divertedtemporarily to Other Services in lieu ofincurring lay-up expense, no assign-ment of lay-up time to Other Servicesis required. That portion of the Ad-justed Cost of the vessels not allocatedto Other Services shall be included inthe total to be allocated to the Trade.

(ii) The total of the adjusted cost ofall vessels employed in the Service dur-ing the period which has not been allo-cated to Other Services, as required in§ 552.6(b)(1)(i)(B), shall be allocated tothe Trade in the cargo-cube mile rela-tionship.

(2) Accumulated depreciation—vessels(Schedules A–II and A–II(A)). (i) Eachcargo vessel (excluding vessels char-tered under leases which are not cap-italized in accordance with§ 552.6(b)(10)) employed in the Serviceshall be listed separately. For vesselsowned the entire year, accumulated de-preciation as of the beginning and theend of the year shall be reported andthe arithmetic average computed. Thisamount shall be allocated to the Serv-ice and to the Trade in the same pro-portions as the cost of the vessel wasallocated on Schedule A–I or A–I(A). Ifthe depreciable life of any equipmentinstalled on a vessel differs from thedepreciation life of the vessel, the costand the depreciation bases shall be setforth separately.

(ii) For any vessels disposed of duringthe period, a proportional reductionshall be made in accumulated deprecia-tion corresponding to the similar de-duction required by § 552.6(b)(1). The ac-cumulated depreciation upon which the


242

46 CFR Ch. IV (10–1–96 Edition)§ 552.6

proportional reduction is calculatedshall be the average of the accumu-lated depreciation at the beginning ofthe year and at date of disposal.

(iii) For any vessels acquired duringthe period, a proportional additionshall be calculated as one-half of theaccumulated depreciation on that ves-sel at the end of the year.

(3) Vessel statistics (Schedules A–IIIand A–III(A)). Carriers shall providevessel statistics as required by Sched-ule A–III or A–III(A).

(4) Investment in other property andequipment; accumulated depreciationother property and equipment (SchedulesA–IV and A–IV(A)). (i) Actual invest-ment, representing original cost to thecarrier or to any related company, inother fixed assets employed in theService shall be reported as of the be-ginning of the year. Accumulated de-preciation for these assets shall be re-ported both as of the beginning and asof the end of the year. The arithmeticaverage of the two amounts shall alsobe shown and shall be the amount de-ducted from original cost in determin-ing rate base. Additions and deductionsduring the period shall also be re-ported, and the carrier shall report asthough all such changes took place atmidyear, except for those involvingsubstantial sums, which shall be pro-rated on a daily basis. Allocation tothe Trade shall be based upon the ac-tual use of the specific asset or groupof assets within the Trade. For thoseassets employed in a general capacity,such as office furniture and fixtures,the voyage expense relationship shallbe employed for allocation purposes.The basis of allocation to the Tradeshall be set forth and fully explained.

(ii) With respect to any significantdeductions, accumulated depreciationshall be proportionately reduced as re-quired by § 552.6(b)(2)(ii).

(5) Working Capital (Schedule A–V).Working capital for vessel operatorsshall be determined as average voyageexpense. Average voyage expense shallbe calculated on the basis of the actualexpenses of operating and maintainingthe vessel(s) employed in the Service(excluding lay-up expenses) for a periodrepresented by the average length oftime of all voyages (excluding lay-upperiods) during the period in which any

cargo was carried in the Trade. Ex-penses for operating and maintainingvessels employed in the Trade shall in-clude: Vessel Operating Expense, Ves-sel Port Call Expense, Cargo HandlingExpense, Administrative and GeneralExpense, and Interest Expense allo-cated to the Trade as provided in para-graphs (c) (2), (4) and (5) of this section.

(6) Working capital (Schedule A–V(A)).Working capital for tug and barge oper-ators shall be determined as the aver-age monthly expense. Average monthlyexpense shall be equal to one-twelfth ofthe expense of the carrier during therelevant 12-month period, computed byadding Voyage Expense, Administra-tive and General Expense, Interest Ex-pense, and Inactive Vessel Expense,each as allocated to the Trade, and di-viding the total by 12.

(7) Property and equipment of relatedcompanies. Property and equipment ofrelated companies used by the filingcarrier in the Trade shall be reportedin accordance with paragraphs (b) (1),(2) and (4) of this section. The cost ofsuch assets shall be that which is re-corded on the books of the related com-pany. Where such assets are included inthe rate base, the profits or losses fromintercompany transactions related tosuch assets are to be eliminated in ac-cordance with paragraph (c)(11) of thissection.

(8) Capitalization of interest duringconstruction (Schedules A–VI and A–VI(A)). (i) Interest shall be capitalized onall funds (including the carrier’s ownfunds) actually employed in the design,engineering study, performance inspec-tion, construction, reconstruction orreconditioning of a capital asset. Suchasset shall be owned in the carrier’sname or in the name of any of its relat-ed companies. Should a carrier capital-ize interest on its assets or those of re-lated companies, it shall produce anyinformation related to these assetsupon request of the Commission. Inter-est on funds expended shall be eligiblefor capitalization when all of the fol-lowing conditions and requirements aremet:

(A) The construction period is 12months or greater. The constructionperiod begins when construction workcommences on the asset and ends when


243


the asset is ready for use by the car-rier. Strike periods during which con-struction is delayed for 8 or more con-secutive days shall not be included indetermining whether the 12-month re-quirement is met; and,

(B) Payments are made on a periodicbasis during the period of design andconstruction.

(ii) Interest shall be calculated start-ing with the first payment and on eachsubsequent payment thereafter. Therate employed shall be the averageprime rate for the month in which thepayment is made, as set forth in theFederal Reserve Bulletin.

(iii) A detailed description of the in-terest calculations shall be submittedfor each capital asset included in therate base of the carrier in the first yearof its inclusion. Such description shallbe set forth on Schedule A–VI or A–VI(A), Capitalization of Interest DuringConstruction. Capitalized interest shallbe included in the rate base when theasset is included in the rate base, in ac-cordance with paragraph (b) of this sec-tion, and in the same allocableamounts as the asset. A schedule shallbe provided each time a rate basestatement is submitted, setting forththe year in which an interest calcula-tion statement was submitted for eachasset which included capitalized con-struction interest in the rate base.

(iv) The effects of the interest-duringconstruction provisions shall be appli-cable to all work completed after De-cember 31, 1977.

(9) Capitalization of leases (SchedulesA–VII and A–VII(A)). Leased assetswhich are capitalized on the carrier’sbooks and which meet the AICPAguidelines for capitalization may alsobe included in rate base. Schedule A–VII or A–VII(A), Capitalization ofLeases, shall be submitted setting forthpertinent information relating to thelease and the details of the capitaliza-tion schedule. Allocations to the Tradeshall follow the requirements of para-graphs (b)(1) and (4) of this section.

(c) Income account (Exhibits B andB(A))—(1) Operating revenue (SchedulesB–I and B–I(A)). (i) Revenue allocatedto the Trade shall include only revenueearned from the common carriage ofcargo in the domestic offshore Tradeduring the period, except that minor

amounts of other cargo may be consid-ered trade cargo in accordance with§ 552.2(j). Revenue figures shall be re-ported in total for the Trade and sepa-rately for each of the 15 inbound com-modities (listed by tariff descriptions)producing the highest revenues for theinbound portion of the Trade, and foreach of the 15 outbound commodities(listed by tariff descriptions) producingthe highest revenues for the outboundportion of the Trade. Where fewer than15 commodities account for at least 90percent of the total revenue for eitherthe inbound or outbound portion of theTrade, only those commodities need beseparately reported. Where the samecommodity is carried under severaltariff designations having differentrates (e.g., potatoes refrigerated, pota-toes non-refrigerated, potatoes in bags,potatoes in containers), each of thesetariff designations shall be consideredas an individual commodity.

(ii) Where the applicable tariff estab-lishes a single freight-all-kinds (FAK)rate for containers that may hold morethan one commodity, individual com-modity designations shall be dis-regarded in considering that tariff itemfor purposes of paragraph (c)(1)(i) ofthis section.

(2) Voyage expense (Schedule B–II).This schedule shall be submitted byvessel operators for any period inwhich any cargo was carried in theService. Allocations to the Trade shallbe on the following basis:

(i) For all voyages in the Service,vessel expense shall be allocated to theTrade in the cargo-cube mile or cargocube relationship, as appropriate.Should any of the elements of vesselexpense be directly allocable to specificcargo, such direct allocations shall bemade and explained.

(ii) Vessel port call and cargo han-dling expenses shall be assigned di-rectly, to the extent possible, by portsat which incurred, to the Trade andOther Cargo, or otherwise allocated onthe basis of cargo cube loaded and dis-charged at each port.

(iii) Other Shipping Operations Reve-nue shall be deducted from Gross Voy-age Expense. Other Shipping Oper-ations Revenue should be assigned di-rectly, to the extent possible, or other-wise allocated on the basis of cargo


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46 CFR Ch. IV (10–1–96 Edition)§ 552.6

cube loaded and discharged at eachport. Any direct assignments shall befully set forth and explained.

(3) Voyage expense (Schedule B–II(A)).This schedule shall be submitted bytug and barge operators:

(i) For all voyages in the Service,transportation expense shall be allo-cated to the Trade in the cargo-cubemile or cargo-cube relationship, as ap-propriate. Should any elements oftransportation expense be directly al-locable to specific cargo, such directallocations shall be made and ex-plained.

(ii) Terminal and traffic expensesshall be assigned directly, to the extentpossible, by ports at which incurred, tothe Trade and Other Cargo, or other-wise allocated on the basis of cargocube loaded and discharged at eachport.

(iii) Where multiple barge units aretowed by a single tug, voyage expenseshall be allocated on the basis of thecargo-cube relationship.

(4) Administrative and general expense(Schedules B–III and B–III(A)). Adminis-trative and general expenses, (A&G)shall be allocated to the Trade usingthe voyage expense relationship. Directassignments should be made wherepractical, particularly with respect toadvertising expense related to the oper-ation of passenger and combinationvessels. Any direct assignment shall beset forth and explained. Charitable con-tributions shall not be allocated to theTrade. In those instances where a car-rier is engaged in other business in ad-dition to shipping, A&G should be allo-cated to each business in the ratio oftotal operating expenses for each busi-ness (less A&G and income taxes) tototal company operating expenses (lessA&G and income taxes).

(5) Interest expense and debt payments(Schedules B–IV and B–IV(A)). Thisschedule shall set forth the total inter-est and debt payments, apportioned be-tween principal and interest, short andlong-term, on debt and lease obliga-tions. Payments on long-term debt areto be calculated consistent with themethod set forth in § 552.6(e)(7) for com-puting the cost of long-term debt cap-ital. Principal and interest shall be al-located to the Trade in the ratio thatTrade rate base less working capital

bears to company-wide assets less cur-rent assets. Where related company as-sets are employed by the filing com-pany, the balance sheet figures on therelated company’s books for such as-sets shall be added to the company-wide total in computing the ratio. Inthose instances where interest ex-penses are capitalized in accordancewith paragraph (b)(9) of this section, adeduction shall be made for theamount so capitalized.

(6) Inactive vessel expense (SchedulesB–V and B–V(A)). Inactive vessel ex-pense shall, in general, be allocated byvessel on the same basis as the invest-ment in such vessel is included in therate base. Inactive vessel expense ap-plicable to vessels not used in the Serv-ice shall be excluded.

(7) Depreciation and amortization(Schedules B–VI and B–VI(A)). Deprecia-tion and amortization of assets in-cluded in the rate base shall be allo-cated on the same bases as are the spe-cific assets.

(8) Construction-differential subsidy re-fund (Schedule B–VII). Construction dif-ferential subsidy refunds paid or pay-able to the Maritime Administration inconnection with vessels employed on apart-time basis in the Service and ap-plicable to the period for which a re-port is being made shall be allocated tothe Trade in the ratio that the cargo-cube miles of cargo carried in theTrade bear to the total cargo-cubemiles of cargo in the Service. Calcula-tion of expenses incurred due to con-struction-differential subsidy refundsmust be reported on Schedule B–VII.

(9) Other revenue or expense (SchedulesB–VIII and B–VII(A)). (i) Any other ele-ments of revenue or expense, wholly orpartially applicable to the Trade, shallbe fully explained by a schedule show-ing details of allocation.

(ii) Operating-differential subsidy re-funds under section 605(a) of the Mer-chant Marine Act, 1936, shall not be al-located to the Trade.

(10) Provision for income tax. Federal,State, and other income taxes shall belisted separately. If the company is or-ganized outside the United States, itshall indicate the entity to which itpays income taxes and the rate of taxapplicable to its taxable income for thesubject year. Federal, State and other


245


income taxes shall be calculated at thestatutory rate. Such tax rates are to beidentical to those set forth in Sched-ules F–VI or F–VI(A) used in determin-ing the carrier’s allowable rate of re-turn.

(11) Related company transactions. In-come account transactions with relat-ed companies shall be shown net ofintercompany profit on the appropriateschedule and allocated to the Trade onthe same basis as other items in thatschedule.

(d) Rate of Return (Exhibits C andC(A))—(1) General. All carriers are re-quired to calculate rate of return onrate base. However, the Commission orindividual carriers, at the Commis-

sion’s discretion, may also employfixed charges coverage and/or operatingratios as provided for in paragraph (f)of this section.

(2) Return on rate base. The return onrate base will be computed by dividingTrade net income plus interest expenseplus provision for income taxes byTrade rate base.

(e) Allowable rate of return on rate base(Exhibits F and F(A))—(1) General. Acarrier’s allowable rate of return onrate base shall be set equal to the car-rier’s weighted average cost of capitalcalculated on a before-tax basis(‘‘BTWACC’’). The BTWACC is definedmathematically by the following ex-pression:

BTWACCD

D P EK

P

D P EK

T

E

D P EK

Td P e=

+ +

++ +

−

++ +

−

1

1

1

1

where:

Kd is the carrier’s cost of long-term debt cap-ital;

Kp is the carrier’s cost of preferred (and pref-erence) stock capital;

Ke is the carrier’s cost of common-stock eq-uity capital;

D is the average book value of the carrier’slong-term debt capital outstanding;

P is the average book value of the carrier’spreferred (and preference) stock capitaloutstanding;

E is the average book value of the carrier’scommon-stock equity capital (par valueplus earned and capital surplus) out-standing; and

T is the carrier’s composite statutory cor-porate income tax rate.

A carrier’s BTWACC shall be cal-culated in precise accordance with therules set forth in this section.

(2) Subsidiary carrier’s capital struc-ture. Where a carrier is a subsidiarythat obtains its common-stock equitycapital through a parent company, thecapital structure of the subsidiaryshall be used in computing theBTWACC unless the carrier has re-ceived prior approval by the Commis-sion to use the consolidated capitalstructure. The subsidiary carrier’s costof common-stock equity capital, thesubsidiary carrier’s cost of long-termdebt capital, the subsidiary carrier’s

cost of preferred stock capital, and thesubsidiary carrier’s composite statu-tory corporate income tax rate shallalso be used in computing theBTWACC. The subsidiary carrier’s costof common-stock equity capital shallbe inferred as the cost of common-stock equity capital estimated for asample of firms having business and fi-nancial risk comparable to the subsidi-ary carrier when the subsidiary car-rier’s capital structure is used in cal-culating the BTWACC.

(3) Comparable risk companies. (i) Aproxy group of companies shall be se-lected to impute the carrier’s cost ofcommon-stock equity capital where:

(A) The carrier is an independentcompany (i.e., it has no corporate par-ent) which issues no publicly-tradedcommon-stock equity, or

(B) The carrier is a subsidiary thatobtains its common-stock equity cap-ital through a parent company.

(ii) The selection of the proxy groupof companies shall be based on the fol-lowing criteria:

(A) The proxy companies shall bebased in the United States.

(B) The proxy companies shall belisted in The Value Line InvestmentSurvey or equivalent data source. If aparty uses data from sources other


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46 CFR Ch. IV (10–1–96 Edition)§ 552.6

than The Value Line Investment Sur-vey, the burden is on that party toprove that the data source is reliableand the data are sufficiently detailedto calculate the BTWACC.

(C) A majority of the proxy compa-nies shall operate and derive a majorportion of their gross revenues pri-marily as common carriers in the busi-ness of freight transportation, andshall own or operate transportation ve-hicles or vessels. Companies with grossannual revenues equal to or less than$25,000,000 shall be excluded from theproxy group. Proxy group companieswhose businesses are not in the trans-portation industry must clearly bedemonstrated to have business riskequivalent to the regulated carrier’sbusiness risk.

(D) In addition, comparable risk com-panies shall be selected by examiningsome, but not necessarily all, of thefollowing risk indicators:

(1) A company’s total capitalizationratio and/or debt-to-equity ratio;

(2) The investment quality ratings ofa company’s long-term debt instru-ments;

(3) The investment safety ranking ofa company’s common-stock equity;

(4) The rating of a company’s finan-cial strength;

(5) Other such valid indicatorsdeemed appropriate by the Commis-sion.

(4) Consolidated capital structure. (i)Upon application, after notice and op-portunity for comment, the Commis-sion may authorize use of the capitalstructure of the consolidated system(i.e., the parent company and all of itssubsidiaries) in computing theBTWACC. The application must showthat:

(A) The subsidiary carrier’s parentcompany issues publicly traded com-mon-stock equity;

(B) The subsidiary carrier’s parentcompany owns 90 percent or more ofthe subsidiary’s voting shares of stock;and

(C) The business and the financialrisks of the subsidiary carrier and theparent company are similar.

(ii) The similarity of the parent com-pany’s and subsidiary carrier’s businessrisk shall be evaluated by examiningthe degree to which the consolidated

system’s profits, revenues, and ex-penses are composed of those of thesubsidiary carrier, and the extent towhich the parent’s holdings are diversi-fied into lines of business unrelated tothose of the subsidiary carrier, and/orother indicators of business riskdeemed appropriate by the Commis-sion. The similarity of the parent com-pany’s and subsidiary carrier’s finan-cial risk shall be evaluated by examin-ing the consolidated system’s and thesubsidiary’s total capitalization ratios,debt-to-equity ratios, investment qual-ity rankings on short- and long-termdebt instruments, times-interest-earned ratios, fixed charges coverageratios (calculated to include both FMCand non-FMC regulated operations),and/or other measures of financial riskdeemed appropriate by the Commis-sion.

(iii) When the consolidated capitalstructure is used, the consolidated sys-tem’s cost of common-stock equitycapital (issued by the parent company),the consolidated system’s cost of long-term debt capital, the consolidated sys-tem’s cost of preferred (and preference)stock capital, and the consolidated sys-tem’s composite statutory corporateincome tax rate shall also be used inestimating the subsidiary’s BTWACC.

(iv) Where the Commission has ap-proved the use of a consolidated capitalstructure, such use will not be subjectto challenge in a subsequent rate inves-tigation brought under section (3) ofthe Intercoastal Shipping Act, 1933.

(5) Book-value, average capitalizationratios. Capitalization ratios represent-ing the capital structure used in deriv-ing a carrier’s BTWACC shall be com-puted on the basis of average projectedbook value outstanding over the 12-month period used to calculate pro-jected midyear rate base in§ 552.2(b)(1)(ii). The average amount ofany class of capital outstanding used indetermining the capitalization ratios iscomputed by adding the amount of aparticular type of capital expected tobe outstanding as of the beginning ofthe 12-month period to the amount ofthat same type of capital expected tobe outstanding as of the end of the 12-month period, and dividing the sum bytwo.


247


1 The cost of sinking fund preferred stockshall be computed in accordance with theregulations for calculating the cost of long-term debt.

(6) Capitalization amounts and ratios(Schedules F–I and F–I(A)). A carriershall show its long-term debt, preferredstock, and common-stock equity cap-italization amounts outstanding, stat-ed in book value terms, as of the begin-ning and as of the end of the 12-monthperiod used to calculate projected mid-year rate base, and the averageamounts and average ratios for that 12-month period. Where a carrier is a sub-sidiary of a parent company, the car-rier shall show its own capitalizationamounts and ratios unless the carrierhas applied for and has been grantedpermission from the Commission to usea consolidated capital structure incomputing the BTWACC. Where suchpermission has been granted, the car-rier shall show instead the consoli-dated system’s capitalization amountsand ratios.

(7) Cost of long-term debt capital(Schedules F–II, F–II(A), F–III, and F–III(A)). (i) The cost of long-term debtcapital 1 shall be calculated by the car-rier for the 12-month period used tocompute projected mid-year rate baseon the basis of:

(A) Embedded cost for existing long-term debt; and

(B) Current cost for any new long-term debt expected to be issued on orbefore the final day of the 12-month pe-riod.

(ii) The arithmetic average annualpercentage rate cost of long-term debtcapital calculated on the basis of all is-sues of long-term debt expected to beoutstanding as of the beginning and asof the end of the 12-month period usedto compute projected mid-year ratebase shall be the cost of long-term debtcapital used in computing theBTWACC.

(iii) The annual percentage rate costof long-term debt capital for all issuesof long-term debt expected to be out-standing as of the beginning and as ofthe end of the 12-month period used tocompute projected mid-year rate baseshall be calculated separately for thetwo dates by:

(A) Multiplying the cost of money foreach issue under paragraph(e)(7)(v)(A)(10) of this section by theprincipal amount outstanding for eachissue, which yields the annual dollarcost for each issue; and

(B) Adding the annual dollar cost ofeach issue to obtain the total dollarcost for all issues, which is divided bythe total principal amount outstandingfor all issues to obtain the annual per-centage rate cost of long-term debtcapital for all issues.

(iv) The arithmetic average annualpercentage rate cost of long-term debtcapital for all issues to be used as thecost of long-term debt capital in com-puting the BTWACC shall be calculatedby:

(A) Adding the total annual dollarcost for all issues of long-term debtcapital expected to be outstanding asof the beginning of the 12-month periodused to compute projected mid-yearrate base to the total annual dollarcost for all issues of long-term debtcapital expected to be outstanding asof the end of the 12-month period, anddividing the resulting sum by two,which yields the average total annualdollar cost of long-term debt for all is-sues for the 12-month period;

(B) Adding the total principalamount outstanding for all long-termdebt issues expected to be outstandingas of the beginning of the 12-month pe-riod used to compute projected mid-year rate base to the total principalamount outstanding for all long-termdebt issues expected to be outstandingas of the end of the 12-month period,and dividing the resulting sum by two,which yields the average total prin-cipal amount expected to be outstand-ing for all issues for the 12-month pe-riod; and

(C) Dividing the average total annualdollar cost of long term debt for all is-sues for the 12-month period by the av-erage total principal amount expectedto be outstanding for all issues for the12-month period, which yields the aver-age annual percentage rate cost oflong-term debt capital for all issues tobe used in computing the BTWACC.

(v)(A) Cost of long-term debt capitalcalculation (Schedules F–II, F–II(A), F–III and F–III(A)). The carrier shall cal-culate the annual percentage rate cost


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46 CFR Ch. IV (10–1–96 Edition)§ 552.6

of long-term debt capital for all issuesof long-term debt expected to be out-standing as of the beginning and as ofthe end of the 12-month period used tocompute projected mid-year rate baseseparately for the two dates, and shallalso calculate the average annual per-centage rate cost of long-term debt forall issues for the 12-month period. Thecarrier shall support these calculationsby showing in tabular form the follow-ing for each class and series of long-term debt expected to be outstandingas of the beginning and as of the end ofthe 12-month period separately for thetwo dates:

(1) Title;(2) Date of issuance;(3) Date of maturity;(4) Coupon rate (%);(5) Principal amount issued ($);(6) Discount or premium ($);(7) Issuance expense ($);(8) Net proceeds to the carrier ($);(9) Net proceeds ratio (%), which is

the net proceeds to the carrier dividedby the principal amount issued;

(10) Cost of money (%), which, for ex-isting long-term debt issues, shall bethe yield-to-maturity at issuance basedon the coupon rate, term of issue, andnet proceeds ratio determined by ref-erence to any generally accepted tableof bond yields; and, for long-term debtissues to be newly issued on or beforethe final day of the 12-month period,shall be based on the average currentyield (published in such a publicationas Moody’s Bond Survey) on long-termdebt instruments similar in maturityand investment quality as the long-term debt security that is to be issued;

(11) Principal amount outstanding(%);

(12) Annual cost ($); and(13) Name and relationship of issuer

to carrier.(B) Where a carrier is a subsidiary of

a parent company, the carrier shallshow the cost of long-term debt cal-culations and information required inthis paragraph for its own cost of long-term debt unless the carrier has ap-plied for and received prior permissionfrom the Commission to use a consoli-dated capital structure in computingthe BTWACC. Where such permissionhas been granted, the subsidiary car-rier shall show the required cost of

long-term debt calculations and infor-mation for the consolidated system’slong-term debt.

(vi) In the event that new long-termdebt is to be issued on or before thefinal day of the 12-month period usedto compute projected mid-year ratebase, the carrier shall submit a state-ment explaining the methods used toestimate information required underparagraph (e)(7)(v)(A) (1) through (13)of this section.

(8) Cost of preferred (and preference)stock capital (Schedules F–IV, F–IV(A),F–V, and F–V(A)). (i) The cost of pre-ferred (and preference) stock capitalshall be calculated by the carrier forthe 12-month period used to computeprojected mid-year rate base on thebasis of:

(A) Embedded cost for existing pre-ferred (and preference stock); and

(B) Current cost for any new pre-ferred (and preference) stock to be is-sued on or before the final day of the12-month period.

(ii) The arithmetic average annualpercentage rate cost of preferred (andpreference) stock capital calculated onthe basis of all issues of preferred (andpreference) stock expected to be out-standing as of the beginning and as ofthe end of the 12-month period used tocalculate projected mid-year rate baseshall be the cost of preferred (and pref-erence) stock capital used in comput-ing the BTWACC.

(iii) The annual percentage rate costof preferred (and preference) stock cap-ital for all issues of preferred (and pref-erence) stock expected to be outstand-ing as of the beginning and as of theend of the 12-month period used tocompute projected mid-year rate baseshall be calculated separately for thetwo dates by:

(A) Multiplying the cost of money foreach issue under paragraph(e)(8)(v)(A)(9) of this section by the paror stated amount outstanding for eachissue, which yields the annual dollarcost for each issue; and

(B) Adding the annual dollar cost ofeach issue to obtain the total for all is-sues, which is divided by the total paror stated amount outstanding for allissues to obtain the annual percentagerate cost of preferred (and preference)stock capital for all issues.


249


(iv) The arithmetic average annualpercentage rate cost of preferred (andpreference) stock capital for all issuesto be used as the cost of preferred (andpreference) stock capital in computingthe BTWACC shall be calculated by:

(A) Adding the total annual dollarcost for all issues of preferred (andpreference) stock capital expected tobe outstanding as of the beginning ofthe 12-month period used to computeprojected mid-year rate base to thetotal annual dollar cost for all issues ofpreferred (and preference) stock capitalexpected to be outstanding as of theend of the 12-month period, and divid-ing the resulting sum by two, whichyields the average total annual dollarcost of preferred (and preference) stockfor all issues for the 12-month period;

(B) Adding the total par or statedamount outstanding for all preferred(and preference) stock issues expectedto be outstanding as of the beginningof the 12-month period used to computeprojected mid-year rate base to thetotal par or stated amount outstandingfor all issues expected to be outstand-ing as of the end of the 12-month pe-riod, and dividing the resulting sum bytwo, which yields the average total paror stated amount expected to be out-standing for all issues for the 12-monthperiod;

(C) Dividing the average total annualdollar cost of preferred (and preference)stock for all issues for the 12-month pe-riod by the average total par or statedamount expected to be outstanding forall issues for the 12-month period,which yields the average annual per-centage rate cost of preferred (andpreference) stock capital for all issuesto be used in computing the BTWACC.

(v)(A) Cost of preferred (and pref-erence) stock capital calculation (Sched-ules F–IV, F–IV(A), F–V and F–V(A)).The carrier shall calculate the annualpercentage rate cost of preferred (andpreference) stock capital for all issuesof preferred (and preference) stock ex-pected to be outstanding as of the be-ginning and as of the end of the 12-month period used to compute pro-jected mid-year rate base separatelyfor the two dates, and shall also cal-culate the average annual percentagerate cost of preferred (and preference)stock for all issues for the 12-month pe-

riod. The carrier shall support thesecalculations by showing in tabularform the following for each issue ofpreferred (and preference) stock as ofthe beginning and as of the end of the12-month period separately for the twodates:

(1) Title;(2) Date of issuance;(3) Dividend rate (%);(4) Par or stated amount of issue ($);(5) Discount or premium ($);(6) Issuance expense ($);(7) Net proceeds to the carrier ($);(8) Net proceeds ratio (%), which is

the net proceeds to the carrier dividedby the par or stated amount issued;

(9) Cost of money (%), which, for ex-isting preferred (and preference) stockissues, shall be the dividend rate di-vided by the net proceeds ratio; and,for preferred (and preference) stock is-sues to be newly issued on or before thefinal day of the 12-month period, shallbe the estimated dividend rate dividedby the estimated net proceeds ratio;

(10) Par or stated amount outstand-ing ($);

(11) Annual cost ($); and(12) If issue is owned by an affiliate,

name and relationship of owner.(B) Where a carrier is a subsidiary of

a parent company, the carrier shallshow the cost of preferred (and pref-erence) stock calculations and infor-mation required in this paragraph forits own preferred (and preference)stock unless the carrier has applied forand been granted permission from theCommission to use a consolidated cap-ital structure in computing theBTWACC. Where such permission hasbeen granted, the subsidiary carriershall show the required cost of pre-ferred (and preference) stock calcula-tions and information for the consoli-dated system’s preferred (and pref-erence) stock.

(vi) In the event that new preferred(and preference) stock is to be issuedon or before the final day of the 12-month period used to compute pro-jected mid-year rate base, the carriershall submit a statement explainingthe methods used to estimate informa-tion required under paragraph(e)(8)(v)(A) (1) through (12) of this sec-tion.


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46 CFR Ch. IV (10–1–96 Edition)§ 552.6

(9) Cost of common-stock equity capital.A carrier’s cost of common-stock eq-uity capital shall be calculated usingthe Discounted Cash Flow (‘‘DCF’’) andthe Risk Premium (‘‘RP’’) methods. Afinal estimate of that cost shall be de-rived from the separate estimates ob-tained using each of the methods.

(10) DCF method. (i) The DCF modelthat shall be used in calculating a car-rier’s cost of common-stock equity isdefined algebraically as follows:

KD

Pg ge

o

o

= + +( . )1 5

where:

Ke is the carrier’s cost of common-stock eq-uity capital;

Do is the carrier’s current annualized divi-dend (defined as four times the currentquarterly installment) per share;

Po is the current market price per share ofthe carrier’s common stock; and

g is the constant expected annual rate ofgrowth in the carrier’s dividends pershare.

(ii) Current market price per share ofcommon stock. A DCF analysis in whichthe current market price per share ofthe carrier’s common stock is an aver-age of the monthly high and low mar-ket prices during a six-month periodcommencing not more than ninemonths prior to the date on which theproposed rates are filed is required.Supplemental DCF analysis using themost recent stock price as a basis forthe current market price per share ofcommon stock may also be used.

(iii) Additional Studies. Other analysisor forms of the DCF model may be in-cluded in the computation and deter-mination of the DCF estimate of thecost of common-stock equity.

(11) RP method. (i) The RP model thatshall be used in calculating a carrier’scost of common-stock equity is definedmathematically as follows:

Ke=Kd+RP

where:

Ke is the regulated carrier’s cost of common-stock equity capital;

Kd is the incremental cost of debt; andRP is the risk premium.

(ii) Risk Premium. The risk premiumused in the RP model shall be the his-torical arithmetic average return dif-

ferential between rates of return actu-ally earned on investments in theStandard and Poor’s 500 Stock Indexand the five-year Treasury note. A riskadjustment specific to the carrier forfirm size may be included in the com-putation and determination of the riskpremium. The risk premium shall bebased on the complete historical dataseries published annually in theStocks, Bonds, Bills and InflationYearbook, for the period 1926 throughthe most recent date for which thespecified data are available.

(iii) Incremental cost of debt. A six-month average of five-year TreasuryNote yields computed over a periodcommencing not more than ninemonths prior to the date on which theproposed rates are filed shall be the es-timate of the incremental cost of debtin the RP model. Supplemental RPanalysis using the most recent five-year Treasury Note yield as a basis forthe incremental cost of debt may alsobe used.

(12) Corporate income tax rate (Sched-ules F–VI and F–VI(A)). The corporateincome tax rate used in computing theBTWACC shall be the carrier’s compos-ite statutory corporate income tax ratefor the 12-month period used to com-pute projected midyear rate base. Suchrate shall be a composite of the car-rier’s Federal and State income taxrates, and of any other income tax rateto be applied to the carrier’s income byany other entity to which the carrier isto pay income taxes. The carrier shallcalculate and show its composite statu-tory corporate income tax rate as wellas its Federal, State, and any other ap-plicable statutory income tax ratesseparately for the 12-month period usedto compute projected midyear ratebase. The carrier shall also state thename of any entity other than the Fed-eral and State governments to which itis to pay taxes. Where a carrier is asubsidiary of a parent company, thecarrier shall show its own statutorycorporate income tax rates unless thecarrier has applied for and been grant-ed permission from the Commission touse a consolidated capital structure incomputing the BTWACC. Where such


251


permission has been granted, the car-rier shall show instead the consoli-dated system’s statutory corporate in-come tax rates.

(13) Flotation costs (Schedules F–VIIand F–VII(A)). (i) A carrier’s cost ofcommon-stock equity capital shall beadjusted to reflect those costs of float-ing new issues that are actually in-curred, but only in the event that newcommon stock is to be issued to thegeneral public during the 12-month pe-riod used to compute projected mid-year rate base. Those flotation costsfor which an allowance shall be mademust be identifiable, and must be di-rectly attributable to underwritingfees, and printing, legal, accounting,and/or other administrative expenses.No allowance shall be made for any hy-pothetical costs such as those associ-ated with market pressure and marketbreak effects. The allowance shall beapplied solely to the new common-stock equity and shall not be applied tothe existing common-stock equity bal-ance. The formula that shall be used tocompute such an allowance is as fol-lows:

k = Fs/(1+s)where:

k is the required increment to the cost of thecarrier’s common stock equity capitalthat will allow the company to recoverits flotation costs;

F is the flotation costs expressed as a deci-mal fraction of the dollar value of newcommon-stock equity sales; and

s is the new common-stock equity sales ex-pressed as a decimal fraction of the dol-lar value of existing common-stock eq-uity capital.

(ii) Flotation costs data (Schedules F–VII and F–VII(A)). (A) In the event thatnew common-stock equity is to be is-sued during the 12-month period usedto compute projected midyear ratebase, the carrier shall show separatelyby category the estimated costs offloating the new issues to the extentthat such costs are identifiable and aredirectly attributable to actual under-writing fees, and to printing, legal, ac-counting, and/or other administrativeexpenses that must be paid by the car-rier. The carrier shall submit a state-ment explaining the method used in es-timating the flotation costs. The car-rier shall also show estimates of the

date of issuance; number of shares tobe issued; gross proceeds at issuanceprice; and net proceeds to the carrier.

(B) Where a carrier is a subsidiarythat obtains its common-stock equitycapital through a parent company, andthe parent company intends to issuenew common-stock equity during the12-month period, the carrier shall showseparately by category the estimatedcosts to the parent company of floatingthe new issues, and estimates of theabove items relative to the parentcompany’s issuance of new common-stock equity, provided that such car-rier has applied for and been grantedpermission from the Commission to usea consolidated capital structure incomputing the BTWACC.

(f) Financial ratio methods—(1) Fixedcharges coverage ratio. (i) The fixedcharges coverage ratio shall be com-puted by dividing the total of net in-come, interest expense, depreciationand amortization expense, and the pro-vision for income taxes as allocated tothe Trade by the Trade fixed charges.Fixed charges applicable to the Tradeare the total of interest expense, prin-cipal payments, and capitalized leaseobligations;

(ii) In order to evaluate the reason-ableness of a carrier’s fixed chargescoverage ratio, the staff will analyzethe debt-coverage ratios for a varietyof entities including, but not limitedto: (A) Public utilities; (B) govern-ment-owned corporations; (C) ruralelectric cooperatives; (D) various mu-nicipal enterprises such as airports andhospitals; and (E) various sectors of thetransportation industry, including sub-sidized and unsubsidized ocean carriers.The staff will analyze the subject car-rier’s debt-coverage ratio in light ofthe nature of its debt structure (i.e.,long term or short term), the overallrisk conditions facing the carrier andthe market environment within whichthe carrier is operating.

(2) Operating ratio. (i) The operatingratio will be computed by dividing totalTrade expenses (adjusted for relatedcompany transactions) by total Traderevenue.

(ii) The reasonableness of a carrier’soperating ratio will be determined bycomparing it to the operating ratios ofother regulated and non-regulated


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46 CFR Ch. IV (10–1–96 Edition)§ 552.91

companies, adjusted for relative risk.In conjunction with the operatingratio, the staff may also consider otherfinancial ratios, such as: (A) Current;(B) leverage; and (C) turnover. The car-rier’s stability in earnings as comparedto that of other firms will also be con-sidered.

(g) Application for waiver (Exhibits Dand D(A)). (1) Carriers requesting awaiver of the filing requirement of thispart must submit an application (Ex-hibit D) and the information requiredin § 552.2(e).

(2) The data submitted with the ap-plication must be certified by the cor-porate officer responsible for the main-tenance and accuracy of the books ofaccount and financial records of thecarrier. The certificate shall be nota-rized and state that the data submittedwith the application have been pre-pared from the regularly maintainedbooks and records of the carrier andthat, to the best of the certificant’sknowledge, the facts submitted aretrue and correct.

(h) Initial tariff filing supporting data(Exhibits E and E(A)). (1) Carriers filinginitial tariffs as defined in § 552.5(r)shall complete and file Exhibit E andthe information required in § 552.2(n).

(2) The data submitted with the filingmust be certified by the corporate offi-cer responsible for the maintenanceand accuracy of the books of accountand financial records of the carrier.The certificate shall be notarized andstate that the data have been preparedfrom the regularly maintained booksand records of the carrier and that, tothe best of the certificant’s knowledge,the facts submitted are true and cor-rect.

[49 FR 38850, Oct. 1, 1984, as amended at 50 FR32068, Aug. 8, 1985; 51 FR 17026, May 8, 1986; 60FR 46059, Sept. 5, 1995]


The information collection require-ments contained in this part have beenapproved by the Office of Managementand Budget (OMB) in accordance with44 U.S.C. chapter 35 and have been as-signed OMB control number 3072–0008.

[54 FR 34182, Aug. 18, 1989]

PART 560—AGREEMENTS BY COM-MON CARRIERS AND OTHER PER-SONS SUBJECT TO THE SHIPPINGACT, 1916


Sec.560.101 Authority.560.102 Purpose.560.103 Policies.560.104 Definitions.

Subpart B—Scope

560.201 Subject agreements.

Subpart C—Exemptions

560.301 Exemption procedures.560.302 Non-substantive agreements—ex-

emption.560.303 Husbanding agreements—exemption.560.304 Agency agreements—exemption.560.305 Equipment interchange agree-

ments—exemption.560.306 Non-exclusive transshipment agree-

ments—exemption.560.307 Marine terminal agreements—ex-

emption.560.308 Marine terminal services agree-

ments—exemption.560.309 Marine terminal facilities agree-

ment—exemption.

Subpart D—Filing and Form of Agreements

560.401 Filing of Agreements; fees.560.402 Form of agreements.560.403 Supporting statements.560.404 Time for filing agreements.

Subpart E—Content of Agreements

560.501 Provisions of conference agreements.560.502 Provisions of agreements of con-

ferences and others.

Subpart F—Action on Agreements

560.601 Federal Register notice.560.602 Comments and protests.560.603 Disposition of agreeement approval

requests.

Subpart G—Reporting and RecordRetention Requirements

560.701 General requirements.560.702 Filing of minutes—including ship-

pers’ requests and complaints.560.703 [Reserved]560.704 Filing of reports on admissions,

withdrawals, and expulsions.


253


Subpart H—[Reserved]

Subpart I—Penalties

560.901 Failure to file agreements.560.902 Failure to file reports.560.903 Falsification of reports.

Subpart J—Paperwork Reduction


AUTHORITY: 5 U.S.C. 553; 31 U.S.C. 9701; 46U.S.C. app. 814, 817(a), 820, 821, 833a and 841a.


Subpart A—General Provisions§ 560.101 Authority.

The rules in this part are issued pur-suant to the authority of section 4 ofthe Administrative Procedure Act, 5U.S.C. 553, and sections 15, 18a, 21, 22,35, and 43 of the Shipping Act, 1916 (theAct), 46 U.S.C. app. 814, 817(a), 820, 821,833a, and 841a.

§ 560.102 Purpose.(a) This part implements those provi-

sions of the Act which govern agree-ments between common carriers bywater in interstate commerce or otherpersons subject to the Act.

(b) This part also establishes proce-dures for:

(1) Filing agreement approval re-quests pursuant to section 15 of theAct, including supporting statements;

(2) Filing comments and protests tosuch agreements and responses; and

(3) The disposition of agreement ap-proval requests.

§ 560.103 Policies.(a) It is the responsibility of the

Commission to disapprove, cancel, ormodify, by order, after notice and hear-ing, any agreement, or modification orcancellation thereof, whether or notpreviously approved by it, that it findsto be unjustly discriminatory or unfairas between carriers, shippers, export-ers, importers, or ports, or between ex-porters from the United States andtheir foreign competitors; to operate tothe detriment of the commerce of theUnited States; to be contrary to thepublic interest; or to be in violation ofthe Act, and to approve all other agree-

ments, modifications, or cancellations.This part is intended to establish pro-cedures for the orderly and expeditiousreview of agreements in accordancewith these statutory requirements.

(b) Section 35 of the Act providesthat the Commission may exemptclasses of agreements from any re-quirement of the Act or this part whereit finds that such exemption will notsubstantially impair effective regula-tion by the Commission, be unjustlydiscriminatory, or be detrimental tocommerce. In order to minimize delayin implementation of routine agree-ments and to avoid the private andpublic cost of unnecessary regulation,the Commission is exempting certainclasses of agreements from the filingand approval requirements of the Actand this part.

(c) In order to discharge the respon-sibilities of the Act the Commission re-quires sufficient time to analyze andconsider every agreement, modifica-tion, and cancellation to determinewhether or not it is lawful. Therefore,the Commission is establishing proce-dures, and form and content require-ments for agreements, supportingstatements, comments and protests,and responses. Parties to agreementsare solely responsible for the timelyfiling of amendments to extend agree-ments containing termination dates.

(d) It is the responsibility of theCommission to insure that parties toagreements approved under section 15of the Act are at all times complyingwith the requirements of that Act. Inorder to discharge properly this respon-sibility, the Commission must be fullyapprised of the manner in which oper-ations are being and will be carried outand shall require that meaningful re-ports on such activities be provided tothe Commission.

(e) Section 15 of the Act providesthat no conference agreement shall beapproved, nor shall continued approvalbe permitted for any agreement, whichfails to provide reasonable and equalterms and conditions for admission andreadmission to conference membershipof other qualified carriers in the trade,or fails to provide that any membermay withdraw from membership uponreasonable notice without penalty for


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46 CFR Ch. IV (10–1–96 Edition)§ 560.104

such withdrawal. All conference agree-ments shall contain reasonable andequal terms and conditions for admis-sion and readmission to conferencemembership to qualified carriers.

(f) Section 15 of the Act provides thatthe Commission shall disapprove anyagreement after notice and hearing ona finding of failure or refusal to adoptand maintain reasonable procedures forpromptly and fairly hearing and con-sidering shippers’ requests and com-plaints. All ratemaking groups operat-ing under approved section 15 agree-ments (except leases, licenses, assign-ments and other agreements of similarcharacter for the use of marine termi-nal facilities) shall adopt and maintainsuch procedures.

(g) Section 15 of the Act providesthat no agreement between carriersnot members of the same conference orconferences of carriers serving dif-ferent trades that would otherwise benaturally competitive, shall be ap-proved, nor shall continued approval bepermitted, unless in the case of agree-ments between carriers, each carrier,or in the case of agreements betweenconferences, each conference, retainsthe right of independent action. Allsuch agreements shall contain a provi-sion retaining the right of independentaction.

(h) Section 15 of the Act providesthat the Commission shall disapprovean agreement on a finding of inad-equate policing of the obligationsunder it. The Commission shall requirethat ratemaking agreements (exceptleases, licenses, assignments and otheragreements of similar character for theuse of marine terminal facilities) con-tain procedures for policing the termsof the agreement.

§ 560.104 Definitions.(a) Agreement means an agreement, or

modification thereof, which is a writ-ten document and which reflects an un-derstanding, arrangement, or under-taking, between two or more commoncarriers by water in interstate com-merce or other persons subject to theAct which is required by section 15 ofthe Act to be filed with the Commis-sion.

(b) Assessment agreement means anagreement, whether part of a collective

bargaining agreement or negotiatedseparately, which provides for thefunding of collectively bargained fringebenefit obligations on other than a uni-form man-hour basis regardless of thecargo handled or type of vessel orequipment utilized.

(c) Common carrier by water in inter-state commerce means a common carrierengaged in the transportation by waterof passengers or property on the highseas or the Great Lakes on regularroutes from port to port between oneState, Territory, District, of possessionof the United States and any otherState, Territory, or possession of theUnited States, or between places in thesame Territory, District, or possession.

(d) Conference agreement means anagreement which authorizes two ormore common carriers by water, eachoperating as a single entity in thetrade covered by the agreement, to dis-cuss and agree upon common rates,charges and conditions of carriage andto enforce adherence, by means of liq-uidated damages, penalties, fines, sus-pension, expulsion or other contractualremedies.

(e) Marine Terminal Facilities meansone or more structures (and servicesconnected therewith) comprising a ter-minal unit, including, but not limitedto, docks, berths, piers, aprons,wharves, warehouses, covered and/oropen storage spaces, cold storageplants, grain elevators and/or bulkcargo loading and/or unloading struc-tures, landings, and receiving stations,which are used for the transmission,care and convenience of cargo and/orpassengers or the interchange of samebetween land and common carriers bywater in interstate commerce or be-tween two common carriers by waterin interstate commerce. This term isnot limited to waterfront or port facili-ties and includes so-called off-dockcontainer freight stations at inland lo-cations and any other facility fromwhich inbound waterborne cargo maybe tendered to consignees or at whichoutbound cargo may be received fromshippers for vessel or container load-ing.

(f) Modification means any change, al-teration, correction, addition, deletion,or revision of an effective agreement orto any appendix to such an agreement.


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(g) Proponents means the parties toan agreement for which section 15 ap-proval has been requested pursuant tothis part.

(h) Other person subject to the Actmeans any person not included in theterm common carrier by water in inter-state commerce, carrying on the businessof forwarding or furnishing wharfage,dock, warehouse or other marine ter-minal facilities in connection with acommon carrier by water in interstatecommerce.

(i) Shippers’ requests and complaintsmeans any communication requestinga change in tariff rates, rules, or regu-lations; the protesting of, or objectingto, existing tariff rates, rules, or regu-lations; objecting to rate increases orother tariff changes; and protestsagainst allegedly erroneous billingsdue to an incorrect commodity classi-fication, incorrect weight or measure-ment of cargo, or other implementa-tion of the tariff. Routine requests forrate information, sailing schedules,space availability, and the like are notincluded in the term.

Subpart B—Scope

§ 560.201 Subject agreements.

This part applies to agreements by oramong two or more common carriersby water in interstate commerce orother persons subject to the Act, ormodifications or cancellations thereof:

(a) Fixing or regulating transpor-tation rates or fares;

(b) Giving or receiving special rates,accommodations, or other specialprivileges or advantages;

(c) Controlling, regulating, prevent-ing, or destroying competition;

(d) Pooling or apportioning earnings,losses, or traffic;

(e) Allotting ports or restricting orotherwise regulating the number andcharacter of sailings between ports;

(f) Limiting or regulating in any waythe volume or character of freight orpassenger traffic to be carried; or

(g) In any manner providing for anexclusive, preferential, or cooperativeworking arrangement.

Subpart C—Exemptions§ 560.301 Exemption procedures.

(a) Authority. The Commission, uponapplication or on its own motion, mayby order or rule exempt for the futureany class of agreements between per-sons subject to the Act from any re-quirement of the Act if it finds thatthe exemption will not substantiallyimpair effective regulation by theCommission, be unjustly discrimina-tory, or be detrimental to commerce.

(b) Optional filing. Notwithstandingany exemption from filing or approvalor other requirements of the Act andthis part, any party to an exemptagreement may file such an agreementwith the Commission.

(c) Application for exemption. Any per-son may apply for an exemption or rev-ocation of an exemption of any class ofagreements or an individual agreementpursuant to section 35 of the Act andthis subpart. An application for exemp-tion shall state the particular require-ment of the Act for which exemption issought. The application shall also in-clude a statement of the reasons whyan exemption should be granted or re-voked and shall provide informationrelevant to any finding required by theAct. Where an application for exemp-tion of an individual agreement ismade, the application shall include acopy of the agreement.

(d) Participation by interested persons.No order or rule of exemption or rev-ocation of exemption may be issued un-less opportunity for hearing has beenafforded interested persons and depart-ments and agencies of the UnitedStates.

(e) Federal Register notice. Notice ofany proposed exemption or revocationof exemption, whether upon applica-tion or upon Commission’s own mo-tion, shall be published in the FEDERALREGISTER. The notice shall include:

(1) A short title for the proposed ex-emption or the title of the existing ex-emption;

(2) The identity of the party propos-ing the exemption or seeking revoca-tion;

(3) A concise summary of the agree-ment or class of agreements for whichexemption is sought, or the exemptionwhich is to be revoked;


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46 CFR Ch. IV (10–1–96 Edition)§ 560.302

(4) A statement that the applicationand any accompanying information areavailable for inspection in the Commis-sion’s offices in Washington, DC; and

(5) The final date for filing commentsregarding the application.

(f) Retention of agreement by parties.Any agreement which has been exempt-ed by the Commission pursuant to sec-tion 35 of the Act shall be retained bythe parties and shall be made availableupon request by the Bureau of Econom-ics and Agreement Analysis for inspec-tion during the term of the agreementand for a period of three years after itstermination.

[49 FR 38850, Oct. 1, 1984, as amended at 59 FR67230, Dec. 29, 1994]

§ 560.302 Non-substantive agree-ments—exemption.

(a) Non-substantive agreement meansan agreement between common car-riers by water in interstate commerceor other persons subject to the Act,acting individually or through ap-proved agreements, which:

(1) Reflects changes in the:(i) Name of any geographic locality

stated therein;(ii) Name of the agreement or the

name or address of a party to theagreement;

(iii) Name and/or number of anyother section 15 agreement, or des-ignated provisions thereof referred toin the agreement;

(iv) Table of contents of an agree-ment;

(v) Date or amendment numberthrough which agreements state theyhave been reprinted to incorporateprior revisions thereto or which cor-rects typographical and grammaticalerrors in the text of the agreement; or

(vi) Numbers or letters of articles orsubarticles of agreements and ref-erences thereto in the text;

(2) Reflects changes in the titles orpersons or committees designatedtherein or transfers the functions ofsuch persons or committees to otherdesignated persons or committees orwhich merely establishes a committee;

(3) Concerns the procurement, main-tenance, or sharing of office facilities,furnishings, equipment, supplies, andpersonnel, including employees andcontractors, the allocation and assess-

ment of the costs thereof, or the provi-sions for the administration and man-agement of such agreements by dulyappointed individuals; or

(4) Cancels an agreement approvedunder the Act and this part.

(b) Non-substantive agreements areexempt from the filing and approval re-quirements of section 15 and of thispart; provided, however, a non-sub-stantive agreement which modifies orcancels an agreement which is subjectto the filing and approval requirementsof this part shall be filed with the Com-mission for informational purposeswithin 30 days of its effective date.

(c) The filing fee for such agreementsis described in section 560.401(c).

[52 FR 43908, Nov. 17, 1987, as amended at 59FR 63908, Dec. 12, 1994]

§ 560.303 Husbanding agreements—ex-emption.

(a) Husbanding agreement means anagreement between a common carrierby water in interstate commerce andanother person subject to the Actthrough which a carrier contracts withan agent to handle routine vessel oper-ating activities in port, such as notify-ing port officials of vessel arrivals anddepartures; ordering pilots, tugs, andlinehandlers; delivering mail; trans-mitting reports and requests from theMaster to the owner/operators; dealingwith passenger and crew matters; andproviding similar services related tothe above activities. The term does notinclude agreements which provide forthe solicitation or booking of cargoes,signing contracts or bills of lading andother related matters, nor does it in-clude agreements that prohibit theagent from entering into similar agree-ments with other carriers.

(b) Husbanding agreements are ex-empt from the filing and approval re-quirements of section 15 and of thispart.



§ 560.304 Agency agreements—exemp-tion.

(a) Agency agreement means an agree-ment between persons subject to the


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Act which provides for the agent’s so-licitation and booking of cargoes, andsigning contracts of affreightment andbills of lading, on behalf of a commoncarrier by water in interstate com-merce. Such an agreement may or maynot also include husbanding servicefunctions and other functions inciden-tal to the performance of duties byagents including processing of claims,maintenance of a container equipmentinventory control system, collectionand remittance of freight and reportingfunctions.

(b) Agency agreements except those:(1) Where a common carrier by water

in interstate commerce is to be anagent for a competing common carrierby water in the same trade, or

(2) Which permit an agent to enterinto similar agreements with morethan one such carrier in a trade,

are exempt from the filing and ap-proval requirements of section 15 andof this part.



§ 560.305 Equipment interchangeagreements—exemption.

(a) Equipment interchange agreementmeans an agreement between two ormore common carriers by water ininterstate commerce for the exchangeof empty containers, chassis, emptyLASH/SEABEE barges, and relatedequipment, which provides only for thetransportation of the equipment as re-quired, payment therefor, managementof the logistics of transferring, han-dling and positioning equipment, itsuse by the receiving carrier, its repairand maintenance, damages thereto,and liability incidental to the inter-change of equipment, and no other sub-ject.

(b) Equipment interchange agree-ments are exempt from the filing andapproval requirements of section 15 andof this part.



§ 560.306 Non-exclusive transshipmentagreements—exemption.

(a) A nonexclusive transshipmentagreement means an agreement bywhich one common carrier by water ininterstate commerce serving a port oforigin by direct vessel call and anothersuch carrier serving a port of destina-tion by direct vessel call provide trans-portation between such ports via an in-termediate port served by direct vesselcall of both such carriers and at whichcargo will be transferred from one tothe other and which agreement doesnot:

(1) Prohibit either carrier from enter-ing into similar agreements with othercarriers;

(2) Guarantee any particular volumeof traffic or available capacity; or

(3) Provide for the discussion or fix-ing of rates for the account of thecargo interests, conditions of service orother tariff matters other than the tar-iff description of the service offered asbeing by means of transshipment, theport of transshipment and the partici-pation of the nonpublishing carrier.

(b) A nonexclusive transshipmentagreement is exempt from the filingand approval requirements of the Actand of this part, provided that the tar-iff provisions set forth in paragraph (c)of this section and the content require-ments of paragraph (d) of this sectionare met.

(c) The applicable tariff or tariffsshall provide:

(1) The through rate;(2) The routings (origin, trans-

shipment, and destination ports); addi-tional charges, if any (i.e. port arbi-trary and/or additional transshipmentcharges); and participating carriers;and

(3) A tariff provision substantially asfollows:

The rules, regulations, and rates in thistariff apply to all transshipment arrange-ments between the publishing carrier or car-riers and the participating, connecting orfeeder carrier. Every participating, connect-ing or feeder carrier which is a party totransshipment arrangements has agreed toobserve the rules, regulations, rates, androutings established herein as evidenced by aconnecting carrier agreement between theparties.


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46 CFR Ch. IV (10–1–96 Edition)§ 560.307

(d) Nonexclusive transshipmentagreements must contain a declarationof the nonexclusive character of the ar-rangement and the entire arrangementbetween the parties, including, whenapplicable, the following terms andconditions:

(1) The identification of the partiesand the specification of their respec-tive roles in the arrangement;

(2) A specification of the governedcargo;

(3) The specification of responsibilityfor the issuance of bills of lading (andthe assumption of common carriage-as-sociated liabilities) to the cargo inter-ests;

(4) The specification of the origin,transshipment and destination ports;

(5) The specification of the governingtariff(s) and provision of their succes-sion;

(6) The specification of the particu-lars of the nonpublishing carrier’s con-currence/participation in the tariff ofthe publishing carrier;

(7) The division of revenues earned asa consequence of the described car-riage;

(8) The division of expenses incurredas a consequence of the described car-riage;

(9) Termination and/or duration ofthe agreement;

(10) Intercarrier indemnification orprovision for intercarrier liabilitiesconsequential to the contemplated car-riage and such documentation as maybe necessary to evidence the involvedobligations;

(11) The care, handling and liabilitiesfor the interchange of such carrierequipment as may be consequential tothe involved carriage;

(12) Such rationalization of servicesas may be necessary to ensure the cost-effective performance of the con-templated carriage; and

(13) Such agency relationships asmay be necessary to provide for thepickup and/or delivery of the cargo.

(e) No subject other than as listed inparagraph (d) of this section may be in-cluded in exempted nonexclusive trans-shipment agreements.

(f) The filing fee for such agreementsis described in section 560.401(c).


§ 560.307 Marine terminal agree-ments—exemption.

(a) Marine terminal agreement meansan agreement, understanding, arrange-ment or association, written or oral(including any modification, cancella-tion or appendix) that applies to fu-ture, prospective activities between oramong the parties and which relatessolely to marine terminal facilitiesand/or services among marine terminaloperators and among one or more ma-rine terminal operators and one ormore common carriers in interstatecommerce that completely sets forththe applicable rates, charges, termsand conditions agreed to by the partiesfor the facilities and/or services pro-vided for under the agreement. Theterm does not include a joint venturearrangement among marine terminaloperators to establish a separate, dis-tinct entity that fixes its own ratesand publishes its own tariff.

(b) Marine terminal conference agree-ment means an agreement between oramong two or more marine terminaloperators and/or common carriers ininterstate commerce for the conduct orfacilitation of marine terminal oper-ations in connection with waterbornecommon carriage in the domestic com-merce of the United States and which:

(1)(i) Provides for the fixing of andadherence to uniform marine terminalrates, charges, practices and conditionsof service relating to the receipt, han-dling and/or delivery of passengers orcargo for all members; and/or

(ii) Provides for the conduct of thecollective administrative affairs of thegroup; and

(2) May include the filing of a com-mon marine terminal tariff in thename of the group and in which all themembers participate, or, in the eventof multiple tariffs, each member par-ticipates in at least one such tariff.

(c) Marine terminal discussion agree-ment means an agreement between oramong two or more marine terminaloperators and/or marine terminal con-ferences and/or common carriers ininterstate commerce solely for the dis-cussion of subjects including marineterminal rates, charges, practices andconditions of service relating to the re-ceipt, handling and/or delivery of pas-sengers or cargo.


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(d) Marine terminal interconferenceagreement means an agreement betweenor among two or more marine terminalconferences and/or marine terminaldiscussion agreements.

(e) All marine terminal agreementsas defined in § 560.307(a), with the ex-ception of marine terminal conference,marine terminal interconference andmarine terminal discussion agree-ments, as defined in § 560.307(b), (c) and(d) are exempt from the approval re-quirements of section 15 of the Ship-ping Act, 1916 on the condition thatthey be filed with the Commission.Such filing shall consist of:

(1) A true copy and 10 additional cop-ies of the filed agreement;

(2) A letter of transmittal, whichshall:

(i) Clearly state that the agreementis being filed for exemption pursuant tothis paragraph;

(ii) Identify all of the documentsbeing transmitted including, in the in-stance of a modification to an approvedor exempted agreement, the full nameof the approved or exempted agree-ment, the Commission-assigned agree-ment number of the approved or ex-empted agreement and the revision,page and/or appendix number of themodification being filed;

(iii) Provide a concise summary ofthe filed agreement or modificationseparate and apart from any narrativeintended to provide support for the ac-ceptability of the agreement or modi-fication;

(iv) Clearly provide the typewrittenor otherwise imprinted name, position,business address and telephone numberof the filing party; and

(v) Be signed in the original by thefiling party or on the filing party’s be-half by an authorized employee oragent of the filing party.

(3) To facilitate the timely and accu-rate publication of the FEDERAL REG-ISTER Notice, the letter of transmittalshall also provide a current list of theagreement’s participants where suchinformation is not provided elsewherein the transmitted documents.

(f) Agreements filed for and entitledto exemption under this paragraph willbe exempted from the approval require-ments of the Shipping Act, 1916, effec-

tive on the date they are filed with theCommission.

(g) The filing fee for such agreementsis described in section 560.401(c).

[52 FR 43909, Nov. 17, 1987, as amended at 57FR 40619, Sept. 4, 1992; 59 FR 63908, Dec. 12,1994]

§ 560.308 Marine terminal servicesagreements—exemption.

(a) Marine terminal services agreementmeans an agreement, contract, under-standing, arrangement or association,written or oral (including any modi-fication, cancellation or appendix) be-tween a marine terminal operator anda common carrier by water in inter-state commerce that applies to marineterminal services as defined in 46 CFR514.2 (including any marine terminalfacilities, as defined in 46 CFR 514.2,which may be provided incidentally tosuch marine terminal services) that areprovided to and paid for by a commoncarrier by water in interstate com-merce. The term ‘‘marine terminalservices agreement’’ does not include:

(1) Any agreement which conveys tothe involved carrier any rights to oper-ate any marine terminal facility bymeans of a lease, license, permit, as-signment, land rental, or similar otherarrangement for the use of marine ter-minal facilities or property; or

(2) Any agreement (or any modifica-tion to any agreement) previously filedwith the Commission pursuant to theShipping Act, 1916, unless said agree-ment, together with all previously-filed modifications, have been formallywithdrawn.

(b) All marine terminal servicesagreements as defined in § 560.308(a) areexempt from the filing and approval re-quirements of section 15 of the Ship-ping Act, 1916, and part 560 of thischapter, on the condition that they donot include rates, charges, rules andregulations which are determinedthrough a marine terminal conferenceagreement, as defined in 46 CFR560.307(b).


[57 FR 4582, Feb. 6, 1992, as amended at 59 FR63908, Dec. 12, 1994; 60 FR 27230, May 23, 1995]


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46 CFR Ch. IV (10–1–96 Edition)§ 560.309

§ 560.309 Marine terminal facilitiesagreement-exemption.

(a) Marine terminal facilities agreementmeans any agreement between oramong two or more marine terminaloperators, or between one or more ma-rine terminal operators and one ormore common carriers by water, to theextent that the agreement involvesocean transportation in interstatecommerce, which conveys to any of theinvolved parties any rights to operateany marine terminal facility by meansof lease, license, permit, assignment,land rental, or other similar arrange-ment for the use of marine terminal fa-cilities or property.

(b) All marine terminal facilitiesagreements as defined in § 560.309(a) areexempt from the filing and approval re-quirements of section 15 of the Ship-ping Act, 1916, and this part 560.

(c) Copies of any and all marine ter-minal facilities agreements currentlyin effect shall be provided, by partiesto such agreements, to any requestingparty for a reasonable copying andmailing fee.

(d) The filing fee for such agreementsis described in section 560.401(c).

[58 FR 5630, Jan. 22, 1993, as amended at 59FR 63908, Dec. 12, 1994]

Subpart D—Filing and Form ofAgreements

§ 560.401 Filing of Agreements; fees.

(a) Agreement approval requestsshall be submitted to the Secretary,Federal Maritime Commission, Wash-ington, DC 20573–0001. Such requestsshall consist of a true copy and 10 addi-tional copies of the agreement and allsupporting information. Requests shallalso be accompanied by a letter oftransmittal which summarizes theagreement’s contents and expressly re-quests Commission approval pursuantto section 15. The true copy shall besigned by each of the proponents per-sonally or by an authorized representa-tive and shall show immediately beloweach signature the name, position, andauthority of the signer. Requests forapproval which do not meet the re-quirements of this section shall be re-jected within 30 days of receipt.

(b) Assessment agreements shall befiled and shall be approved upon filing.

(c) Agreement filings for Commissionaction requiring detailed justificationand review by the Commission shall beaccompanied by remittance of a $1,402filing fee; agreement filings for Com-mission action not requiring detailedjustification, but requiring review bythe Commission, shall be accompaniedby remittance of a $695 filing fee; and,agreement filings for terminal and car-rier exempt agreements shall be ac-companied by remittance of a $120 fil-ing fee.


§ 560.402 Form of agreements.(a) A request for approval of an

agreement modification shall be filedin accordance with § 560.401 and shallidentify the page and paragraph to beamended and restate each such para-graph. The language to be excised shallbe struck through, but not obliterated,and the substituted language, if any,shall be inserted directly followingthat which is to be excised. The newlanguage shall be underscored. If themodification does not completely re-place approved provisions, the page orpages on which the proposed amend-ments will appear shall be restatedwith the proposed amendments under-scored and placed in proper sequenceon the page.

(b) Whenever an approved agreementhas been modified three times in themanner described in paragraph (a) ofthis section, the next succeeding modi-fication shall be accomplished by re-stating the entire agreement, incor-porating all previous modifications,and showing the latest change in themanner required by paragraph (a) ofthis section.

§ 560.403 Supporting statements.An agreement submitted for approval

may be accompanied by a supportingstatement, signed by an authorizedrepresentative of the proponents, indi-cating the reasons which caused themaking of the agreement and the re-sults intended to flow from its imple-mentation, or other facts or argumentswhich support approval. Affidavits or


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other evidence may be attached to suchstatements. Supporting statements, in-cluding all documents, affidavits orother evidence attached thereto, arepublic records. No claims of confiden-tiality will be allowed.

§ 560.404 Time for filing agreements.(a) All modifications of approved

agreements shall be filed within thefollowing specified times:

(1) Applications for extension of anapproved agreement due to terminateby its own terms, shall be filed so thatthe Commission will receive the appli-cation not less than one hundred twen-ty (120) days prior to the date on whichthe approved agreement would other-wise terminate.

(2) Modifications of an approvedagreement, other than as designated inparagraph (a)(1) of this section, shouldbe filed not less than one hundredtwenty (120) days prior to the date it isintended that action will begin, changeor cease as a result of the provision(s)of the modification.

(b) Failure to file an application forthe extension of an approved agree-ment due to terminate by its ownterms at least one hundred twenty (120)days in advance of the terminationdate may result in the approved agree-ment terminating prior to Commissionaction on the filed amendment.


Subpart E—Content ofAgreements

§ 560.501 Provisions of conferenceagreements.

(a) Voting. Conference agreements,agreements between or among con-ferences, and agreements whereby theparties are authorized to fix rates (ex-cept leases, licenses, assignments orother agreements of similar characterfor the use of marine terminal facili-ties) submitted to the Commission forapproval shall contain a provision stat-ing the manner in which the joint busi-ness of the parties may be carried out:i.e., full conference meeting, agents’meeting, principals’ meeting, owners’meeting, through committees or sub-committees, telephone or oral polls, or

through any other procedure by whichthe business of the joint parties may beconducted. This provision shall also in-clude quorum requirements and thetypes of vote necessary to take variousactions; i.e., majority, two-thirds,three-fourths, majority plus one, unan-imous, etc.

(b) Membership. Conference agree-ments shall include a provision sub-stantially as follows:

Any common carrier by water in interstatecommerce which has been regularly engagedas a common carrier in the trade covered bythis agreement, or who furnishes evidence ofability and intention in good faith to insti-tute and maintain such a common carrierservice between ports within the scope ofthis agreement, and who evidences an abilityand intention in good faith to abide by allthe terms and conditions of this agreement,may hereafter become a party to this agree-ment by affixing its signature thereto.

This section will not preclude the con-ference from imposing legitimate con-ditions on membership, including butnot necessarily limited to, the pay-ment of an admission fee, payment ofany outstanding financial obligationsarising from prior membership, or theposting of a security bond or deposit.All such conditions must be made ex-pressed terms of the conference agree-ment, filed with and approved by theCommission pursuant to section 15 ofthe Act.

(c) Every application for membershipshall be acted upon promptly.

(d) Any party may withdraw from theconference without penalty by givingat least 30 days’ written notice of in-tention to withdraw to the conference,except that action taken by the con-ference to compel the payment of out-standing financial obligations by theresigning member shall not be con-strued as a penalty for withdrawal.

(e) No party may be expelled againstits will from the conference except forfailure to maintain a common carrierservice between the ports within thescope of the agreement (said failure tobe determined according to the mini-mum sailing requirements set forth inthe agreement) or for failure to abideby all the terms and conditions of theagreement.


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46 CFR Ch. IV (10–1–96 Edition)§ 560.502

§ 560.502 Provisions of agreements ofconferences and others.

(a) All agreements between commoncarriers by water not members of thesame conference or conferences of suchcarriers serving trades that would oth-erwise be naturally competitive, shallcontain provisions substantially as fol-lows:

The parties hereto (either carriers or con-ferences as the case may be) agree that withrespect to any actions to be taken or proce-dures to be followed under this agreement,any party, after (insert here a period of timenot to exceed ten days) may take action orfollow procedures independent of thoseagreed upon.

(b) The parties may stipulate in theagreement whatever event should com-mence the running of the notice period,and the mode of communicating thedecision to take independent action.

Subpart F—Action on Agreements§ 560.601 Federal Register notice.

With the excetion of marine terminalfacilities agreements, as defined in§ 560.309(a), requests for approval whichare not rejected pursuant to § 560.401shall be noticed in the FEDERAL REG-ISTER. The notice shall include:

(a) A short title for the agreement;(b) The identity of the proponents;(c) The Commission agreement num-

ber;(d) A concise summary of the agree-

ment’s contents;(e) A statement that the agreement

and any supporting statement, includ-ing all documents, affidavits, or otherevidence attached thereto, are avail-able for inspection at the Commission’soffices;

(f) The final date for filing protestsor comments regarding the agreement;and

(g) The name and address of the filingagent.

[52 FR 43909, Nov. 17, 1987, as amended at 58FR 5630, Jan. 22, 1993]

§ 560.602 Comments and protests.(a) A comment is a written state-

ment regarding the approvability of anagreement. Comments have no pre-scribed form or content and are notlimited in any way, except by the time

limits provided in the FEDERAL REG-ISTER notice. A written communicationregarding the approvability of anagreement, not conforming to the re-quirements of paragraph (b) of this sec-tion, shall be considered a comment.Filing a comment shall not necessarilyentitle a person to:

(1) Any discussion of the comment ina Commission order disposing of theagreement;

(2) The institution of any furtherCommission proceeding; or

(3) Participation in any further pro-ceeding which may be instituted.

(b) A protest is a written oppositionto the approval of an agreement whichcomplies with the requirements of thisparagraph. A protest also constitutesan undertaking by the protestant toactively participate as a party in anyfurther proceeding concerning theagreement, and protestants shall be sonamed in any Commission hearingorder which may be issued. Protestsshall:

(1) Identify, with particularity, thereasons why the agreement, or anyconstituent part, should be dis-approved;

(2) Address the accuracy of any state-ments and conclusions submitted bythe proponents pursuant to § 560.403;

(3) Allege facts which support the ar-guments made in paragraphs (b)(1) and(b)(2) of this section; and

(4) Specify the source or derivation ofthe facts alleged pursuant to paragraph(b)(3) of this section.

(c) A copy of all comments and pro-tests filed with the Commission shallbe served upon the filing agent identi-fied in § 560.601(g) on the same datethey are filed with the Commission. Acertificate of service attesting thatthis requirement has been met shall beattached to the comment or protest.

(d) Within 15 days from the date thatcomments or protests are due (as speci-fied by the FEDERAL REGISTER noticeor as subsequently extended by theCommission), the proponents or theirauthorized representative may file aresponse to each such comment or pro-test with service to all persons whichhave filed comments or protests.

(e) Except as provided in this sectionand § 560.403, or except, in the case of


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an unprotested agreement, as the Di-rector, Bureau of Economics andAgreement Analysis may in his/her dis-cretion initiate, or unless specificallyrequested in writing by the Commis-sion, with copies to the proponents andpersons which have filed protests orcomments, no other written or oralcommunication concerning a pendingagreement shall be permitted. Amend-ments or supplements to documentssubmitted pursuant to § 560.403 and thissection shall be permitted in the dis-cretion of the Commission upon ashowing of good cause, except that, inno case shall such permission be grant-ed where the agreement has beenscheduled and noticed for an agencymeeting pursuant to § 503.82 of thischapter. A change in material fact orin applicable law occurring after thesubmission of the initial statement,comment or protest will normally con-stitute good cause. Inquiries as to thestatus of agreements shall be made tothe Secretary of the Commission.


§ 560.603 Disposition of agreement ap-proval requests.

(a) The Commission shall, by condi-tional or unconditional orders, ap-prove, disapprove, or institute furtherproceedings regarding agreements filedwith it.

(b) Further proceedings regarding anagreement will be instituted when:

(1) The Commission, in its discretion,considers further inquiry advisable;

(2) A protest alleges material factswhich, if true and reasonably subjectto proof on the basis of their sourceand derivation, and arguments ad-vanced, would preclude approval of theagreement, except that no further pro-ceeding will be instituted if the dis-puted factual issues are resolved by theproponents’ acceptance of conditionsimposed by a conditional order in ac-cordance with paragraph (c) of this sec-tion;

(3) The proponents of an agreementwhich seemingly contravenes thestandards of section 15 properly exer-cise their right to request a furtherhearing pursuant to paragraph (d) ofthis section.

(c) The Commission may issue a con-ditional order prescribing modifica-tions in the agreement necessary to ob-tain approval when the agreement doesor appears to contravene the standardsof section 15 unless modified; and if somodified, would be approvable withoutfurther proceedings. If conditions im-posed by the Commission are met with-in the time specified by a conditionalorder, the revised version of the agree-ment will stand approved from the dateof receipt. Notice of such date shall begiven to proponents or their represent-ative by the Commission.

(d) Failure to meet conditions im-posed by the Commission will result ineither the automatic disapproval of theagreement or the institution of furtherproceedings by the Commission eitheron its own initiative or, where the con-ditional order found that the agree-ment was unapprovable, pursuant to arequest from proponents. Any such re-quest shall include a detailed recital ofthe facts that they intend to prove atthat hearing, a description of evidenceintended to be used to prove thosefacts, and an explanation as to why thefacts sought to be proven support theapproval of the agreement. If a findingof unapprovability was made, the con-ditional order will expressly state thedate upon which disapproval wouldtake place.

(e) It is unlawful to carry out theprovisions of a conditionally approvedor disapproved agreement prior to ap-proval by the Commission.


§ 560.701 General requirements.

(a) The parties to conference agree-ments, agreements between or amongconferences and agreements wherebythe parties are authorized to fix rates(except leases, licenses, assignments orother agreements of similar characterfor the use of marine terminal facili-ties) shall retain a record of the voteon each question voted on for at leasttwo years. These records may be re-tained by a single party to the agree-ment, or an administrative official of aconference or ratemaking agreementdesignated for that purpose.


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(b) All reports or circulars, in what-ever form, distributed to the parties,which relate to matters within thescope of the approved agreement, shallbe retained by the parties for at leasttwo years. This record may be retainedby a single party to the agreement, oran administrative official of a con-ference or ratemaking agreement des-ignated for that purpose.

(c) Reports and minutes required tobe filed by this subpart may be filed bydirect electronic transmission in lieuof hard copy. Detailed information onelectronic transmission is availablefrom the Commission’s Bureau of Eco-nomics and Agreement Analysis. Cer-tification and signature requirementsof this subpart can be met on elec-tronic transmissions through use of apre-assigned Personal IdentificationNumber (PIN) obtained from the Com-mission. PINs can be obtained by an of-ficial of the filing party by submittinga statement to the Commission agree-ing that inclusion of the PIN in thetransmission constitutes the signatureof the official. Only one PIN will be is-sued for each agreement. Where a filingparty has more than one official au-thorized to file minutes or reports,each additional official must submitsuch a statement countersigned by theprincipal official of the filing party.Each filing official will be issued aunique password. A PIN or designationof authorized filing officials may becanceled or changed at any time uponthe written request of the principal of-ficial of the filing party. Direct elec-tronic transmission filings may bemade at any time except between thehours of 8:30 a.m. and 2:00 p.m. Easterntime on Commission business days.


§ 560.702 Filing of minutes—includingshippers’ requests and complaints.

(a) The parties to each approved con-ference agreement, agreement betweenor among conferences, or agreementssubject to this part whereby the par-ties are authorized to fix rates (exceptleases, licenses, assignments or otheragreements of similar character for theuse of marine terminal facilities) shall,through a designated official, file with

the Commission a report of all meet-ings describing all matters within thescope of the agreement which are dis-cussed or taken up at any such meet-ing, and shall specify the action takenwith respect to each such matter, in-cluding any shippers’ requests andcomplaints, which are discussed at anysuch meeting. For the purpose of thispart, the term meeting shall includeany meeting of parties to the agree-ment, including meetings of theiragents, principals, owners, committeesor subcommittees of the parties au-thorized to take final action on behalfof the parties. If the agreement author-izes final action by telephonic or per-sonal polls of the membership, a reportdescribing each matter so consideredand the action taken with respectthereto shall be filed with the Commis-sion. These reports need not disclosethe identity of parties that propose ac-tions, or the identity of parties thatparticipated in the discussions of anyparticular matter.

(b) The reports subject to paragraph(a) of this section shall be filed withthe Commission within 30 days aftersuch meetings and shall be certified asto accuracy and completeness by theConference Chairman, Secretary, orother official.

(c) No report need be filed underparagraph (a) of this section with re-spect to any discussion of or actiontaken with regard to rates that, ifadopted, would be required to be pub-lished in a tariff on file with the Com-mission. This reporting exemption doesnot apply to discussions involving gen-eral rate policy, general rate changes,the opening or closing of rates, or dis-cussions involving items, that if adopt-ed, would be required to be published inother tariff sections as specified inPart 514 of this chapter.

(d) Tariffs issued by or on behalf ofconferences and other rate-makinggroups shall contain full instructionsas to where and by what method ship-pers may file their requests and com-plaints, together with a sample of therate request form, if one is used, or, inlieu thereof a statement as to whatsupporting information is considerednecessary for processing the request or


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complaint through conference chan-nels. All changes made in such instruc-tions shall be published in said tariffs,supplements thereto, or reissues there-of, in accordance with the tariff filingrequirements of section 18(a) of theAct.

[52 FR 43909, Nov. 17, 1987, as amended at 57FR 40619, Sept. 4, 1992; 60 FR 27230, May 23,1995]


§ 560.704 Filing of reports on admis-sions, withdrawals, and expulsions.

(a) Prompt notice of admission tomembership to a conference shall befurnished to the Commission and noadmission shall be effective prior tothe postmark date of such notice.

(b) Advice of any denial of admissionto membership, together with a state-ment of the reasons therefor, shall befurnished promptly to the Commission.

(c) Notice of withdrawal of any partyshall be furnished promptly to theCommission.

(d) No expulsion shall become effec-tive until a detailed statement settingforth the reason or reasons thereforhas been furnished the expelled mem-ber and a copy of such notificationsubmited to the Commission.

Subpart H—[Reserved]

Subpart I—Penalties§ 560.901 Failure to file agreements.

Any common carrier by water ininterstate commerce or other personsubject to the Act entering into or car-rying out an agreement subject to theAct which has not been filed with andapproved, or has not been exempted, bythe Commission is in violation of sec-tion 15 of the Act and this part andsubject to penalties of up to $1000 foreach day such violation continues.

§ 560.902 Failure to file reports.

Compliance is mandatory and failureto file the reports required by this partmay result in disapproval of agree-ments under section 15 of the Act orpenalties of up to $100 for each day ofsuch default under section 21 of theAct.

§ 560.903 Falsification of reports.

Knowing falsification of any reportrequired by the Act or this part is aviolation of the rules of this part and issubject to the penalties set forth insection 21 of the Act and may be sub-ject to the criminal penalties providedin 18 U.S.C. 1001.



This section displays the controlnumbers assigned to information col-lection requirements of the Commis-sion in this part by the Office of Man-agement and Budget (OMB) pursuantto the Paperwork Reduction Act of1980, Public Law 96–511. The Commis-sion intends that this part comply withthe requirements of section 3507(f) ofthe Paperwork Reduction Act, whichrequires that agencies display a cur-rent control number assigned by theDirector of the Office of Managementand Budget (OMB) for each agency in-formation collection requirement:

SectionCurrent

OMB Con-trol No.

560.307 .............................................................. 3072–0039560.1—560.306 ................................................. 3072–0040560.308—560.903 ............................................. 3072–0040

[52 FR 43909, Nov. 17, 1987; 52 FR 45961, Dec.3, 1987]


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46 CFR Ch. IV (10–1–96 Edition)§ 571.1

SUBCHAPTER D—REGULATIONS AFFECTING MARITIME CAR-RIERS AND RELATED ACTIVITIES IN FOREIGN COMMERCE

PART 571—INTERPRETATIONS ANDSTATEMENTS OF POLICY

Sec.571.1 Interpretation of Shipping Act of

1984—Refusal to negotiate with shippers’associations.

571.2 Interpretation of Shipping Act of1984—Unpaid ocean freight charges.

AUTHORITY: 5 U.S.C. 553, 46 U.S.C. app. 1706,1707, 1709, and 1716.

§ 571.1 Interpretation of Shipping Actof 1984—Refusal to negotiate withshippers’ associations.

(a) Section 8(c) of the Shipping Act of1984 (1984 Act) authorizes ocean com-mon carriers and conferences to enterinto a service contract with a shippers’association, subject to the require-ments of the 1984 Act. Section 10(b)(13)of the 1984 Act prohibits carriers fromrefusing to negotiate with a shippers’association. Section 7(a)(2) of the 1984Act exempts from the antitrust lawsany activity within the scope of thatAct, undertaken with a reasonablebasis to conclude that it is pursuant toa filed and effective agreement.

(b) The Federal Maritime Commis-sion interprets these provisions to es-tablish that a common carrier or con-ference may not require a shippers’ as-sociation to obtain or apply for a Busi-ness Review Letter from the Depart-ment of Justice prior to or as part of aservice contract negotiation process.

[53 FR 43698, Oct. 28, 1988]

§ 571.2 Interpretation of Shipping Actof 1984—Unpaid ocean freightcharges.

Section 10(a)(1) of the Shipping Actof 1984 states that it is unlawful for anyperson to obtain or attempt to obtaintransportation for property at lessthan the properly applicable rates, byany ‘‘unjust or unfair device ormeans.’’ An essential element of the of-fense is use of an ‘‘unjust or unfair de-vice or means.’’ In the absence of evi-dence of bad faith or deceit, the Fed-eral Maritime Commission will notinfer an ‘‘unjust or unfair device or

means’’ from the failure of a shipper topay ocean freight. An ‘‘unjust or unfairdevice or means’’ could be inferredwhere a shipper, in bad faith, inducedthe carrier to relinquish its possessorylien on the cargo and to transport thecargo without prepayment by the ship-per of the applicable freight charges.

[58 FR 7194, Feb. 5, 1993]

PART 572—AGREEMENTS BYOCEAN COMMON CARRIERSAND OTHER PERSONS SUBJECTTO THE SHIPPING ACT OF 1984


Sec.572.101 Authority.572.102 Purpose.572.103 Policies.572.104 Definitions.

Subpart B—Scope

572.201 Subject agreements.572.202 Non-subject agreements.

Subpart C—Exemptions

572.301 Exemption procedures.572.302 Non-substantive agreements and

non-substantive modifications to exist-ing agreements—exemption.

572.303 Husbanding agreements—exemption.572.304 Agency agreements—exemption.572.305 Equipment interchange agree-

ments—exemption.572.306 Non-exclusive transshipment agree-

ments—exemption.572.307 Marine terminal agreements—ex-

emption.572.308 Agreements between or among whol-

ly-owned subsidiaries and/or their par-ent—exemption.

572.309 Miscellaneous modifications toagreements—exemptions.

572.310 Marine terminal services agree-ments—exemption.

572.311 Marine terminal facilities agree-ment—exemption.

Subpart D—Filing of Agreements

572.401 General requirements.572.402 Form of agreements.572.403 Agreement provisions—organization.572.404 Organization of conference and

interconference agreements.


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572.405 Modifications of agreements.572.406 Application for waiver.572.407 Complete and definite agreements.

Subpart E—Information Form Requirements

572.501 General requirements.572.502 Subject agreements.572.503 Information form for Class A/B

agreements.572.504 Information form for Class C agree-

ments.572.505 Application for waiver.


572.601 Preliminary review—rejection ofagreements.

572.602 Federal Register notice.572.603 Comment.572.604 Waiting period.572.605 Requests for expedited approval.572.606 Requests for additional information.572.607 Failure to comply with requests for

additional information.572.608 Confidentiality of submitted mate-

rial.572.609 Negotiations.


572.701 General requirements.572.702 Agreements subject to Monitoring

Report requirements.572.703 Monitoring report for Class A agree-

ments.572.704 Monitoring report for Class B agree-

ments.572.705 Monitoring report for Class C agree-

ments.572.706 Filing of minutes—including ship-

pers’ requests and complaints, and con-sultations.

572.707 Other documents.572.708 Retention of records.572.709 Application of waiver.

Subpart H—Conference Agreements

572.801 Independent action.572.802 Service contracts.


572.901 Failure to file.572.902 Falsification of reports.



APPENDIX A TO PART 572—INFORMATION FORMFOR CLASS A/B AGREEMENTS AND INSTRUC-TIONS

APPENDIX B TO PART 572—INFORMATION FORMFOR CLASS C AGREEMENTS AND INSTRUC-TIONS

APPENDIX C TO PART 572—MONITORING RE-PORT FOR CLASS A AGREEMENTS AND IN-STRUCTIONS

APPENDIX D TO PART 572—MONITORING RE-PORT FOR CLASS B AGREEMENTS AND IN-STRUCTIONS

APPENDIX E TO PART 572—MONITORING RE-PORT FOR CLASS C AGREEMENTS AND IN-STRUCTIONS

AUTHORITY: 5 U.S.C. 553; 31 U.S.C. 9701; 46U.S.C. app. 1701–1707, 1709–1710, 1712 and 1714–1717.


Subpart A—General Provisions§ 572.101 Authority.

The rules in this part are issued pur-suant to the authority of section 4 ofthe Administrative Procedure Act (5U.S.C. 553), and sections 2, 3, 4, 5, 6, 7,8, 10, 11, 13, 15, 16, 17 and 18 of the Ship-ping Act of 1984 (the Act).

[49 FR 45351, Nov. 15, 1984; 49 FR 48927, Dec.17, 1984]

§ 572.102 Purpose.This part implements those provi-

sions of the Act which govern agree-ments by or among ocean common car-riers and agreements (to the extent theagreements involve ocean transpor-tation in the foreign commerce of theUnited States) among marine terminaloperators and among one or more ma-rine terminal operators and one ormore ocean common carriers. This partalso sets forth more specifically cer-tain procedures provided for in the Act.

§ 572.103 Policies.(a) The Act requires that agreements

be processed and reviewed, upon theirinitial filing, according to strict statu-tory deadlines. This part is intended toestablish procedures for the orderlyand expeditious review of filed agree-ments in accordance with the statu-tory requirements.

(b) The Act requires that agreementsbe reviewed, upon their initial filing,to ensure compliance with all applica-ble provisions of the Act and empowersthe Commission to obtain informationto conduct that review. This part iden-tifies those classes of agreementswhich must be accompanied by infor-mation submissions when they are first


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filed, and sets forth the kind of infor-mation for each class of agreementwhich the Commission believes rel-evant to that review. Only that infor-mation which is relevant to such a re-view is requested. It is the policy of theCommission to keep the costs of regu-lation to a minimum and at the sametime obtain information needed to ful-fill its statutory responsibility.

(c) In order to further the goal of ex-pedited processing and review of agree-ments upon their initial filing, agree-ments are required to meet certainminimum requirements as to form.These requirements are intended to en-sure expedited review and should assistparties in preparing agreements. Theserequirements as to form do not affectthe substance of an agreement and areintended to allow parties the freedomto develop innovative commerical rela-tionships and provide efficient and eco-nomic transportation systems.

(d) The Act itself excludes certainagreements from filing requirementsand authorizes the Commission to ex-empt other classes of agreements fromany requirement of the Act or thispart. In order to minimize delay in im-plementation of routine agreementsand to avoid the private and publiccost of unnecessary regulation, theCommission is exempting certain class-es of agreements from the filing re-quirements of this part.

(e) Under the new regulatory frame-work established by the Act, the role ofthe Commission as a monitoring andsurveillance agency has been enhanced.The Act favors greater freedom in al-lowing parties to form their commer-cial arrangements. This, however, re-quires greater monitoring of agree-ments after they have become effec-tive, to assure continued compliancewith all applicable provisions of theAct. The Act empowers the Commis-sion to impose certain recordkeepingand reporting requirements. This partidentifies those classes of agreementswhich require specific record retentionand reporting to the Commission andprescribes the applicable period ofrecord retention, the form and contentof such reporting, and the applicabletime periods for filing with the Com-mission. Only that information whichis necessary to assure that Commission

monitoring responsibilities will be ful-filled is requested. It is the policy ofthe Commission to keep the costs ofregulations to a minimum and at thesame time obtain information neededto fulfill its statutory responsibility.

(f) The Act requires that conferenceagreements must contain certain man-datory provisions. Each such agree-ment must: (1) state its purpose; (2)provide reasonable and equal terms andconditions for admission and readmis-sion to membership; (3) allow for with-drawal from membership upon reason-able notice without penalty; (4) requirean independent neutral body to policethe conference, if requested by a mem-ber; (5) prohibit conduct specified insections 10(c)(1) or 10(c)(3) of the Act;(6) provide for a consultation process;(7) establish procedures for consideringshippers’ requests and complaints; and(8) provide for independent action. Par-ties to conference agreements are freeto develop their own mandatory provi-sions in accordance with the require-ments of section 5(b) of the Act.

(g) An agreement filed under the Actmust be clear and definite in its terms,must embody the complete understand-ing of the parties, and must set forththe specific authorities and conditionsunder which the parties to the agree-ment will conduct their present oper-ations and regulate the relationshipsamong the agreement members.


§ 572.104 Definitions.When used in this part:(a) Agreement means an understand-

ing, arrangement or association, writ-ten or oral (including any modifica-tion, cancellation or appendix) enteredinto by or among ocean common car-riers and/or marine terminal operators,but does not include a maritime laboragreement.

(b) Antitrust laws means the Act ofJuly 2, 1890 (ch. 647, 26 Stat. 209), 15U.S.C. 1, as amended; the Act of Octo-ber 15, 1914 (ch. 323, 38 Stat. 730), 15U.S.C. 12, as amended; the FederalTrade Commission Act (38 Stat. 717), 15U.S.C. 41, as amended; sections 73 and74 of the Act of August 27, 1894 (28 Stat.570), 15 U.S.C. 8, 9, as amended; the Actof June 19, 1936 (ch. 592, 49 Stat. 1526),


269


15 U.S.C. 13, as amended; the AntitrustCivil Process Act (76 Stat. 548), 15U.S.C. 1311, note as amended; andamendments and Acts supplementarythereto.

(c) Appendix means a document con-taining additional material of limitedapplication and appended to an agree-ment, distinctly differentiated fromthe main body of the basic agreement.

(d) Assessment agreement means anagreement, whether part of a collectivebargaining agreement or negotiatedseparately, to the extent that it pro-vides for the collectively bargainedfringe benefit obligations on other thana uniform man-hour basis regardless ofthe cargo handled or type of vessel orequipment utilized.

(e) Capacity management or capacityregulation agreement means an agree-ment between two or more ocean com-mon carriers which authorizes with-holding some part of the capacity ofthe parties’ vessels from a specifiedtransportation market, without reduc-ing the real capacity of those vessels.The term does not include sailingagreements or space charter agree-ments.

(f) Common carrier means a personholding itself out to the general publicto provide transportation by water ofpassengers or cargo between the UnitedStates and a foreign country for com-pensation that: (1) Assumes respon-sibility for the transportation from theport or point of receipt to the port orpoint of destination; and (2) utilizes,for all or part of that transportation, avessel operating on the high seas or theGreat Lakes between a port in theUnited States and a port in a foreigncountry.

(g) Conference agreement means anagreement between or among two ormore ocean common carriers or be-tween or among two or more marineterminal operators for the conduct orfacilitation of ocean common carriageand which provides for: (1) The fixing ofand adherence to uniform rates,charges, practices and conditions ofservice relating to the receipt, car-riage, handling and/or delivery of pas-sengers or cargo for all members; (2)the conduct of the collective adminis-trative affairs of the group; and (3) mayinclude the filing of a common tariff in

the name of the group and in which allthe members participate, or, in theevent of multiple tariffs, each membermust participate in at least one suchtariff. The term does not include jointservice, pooling, sailing, space charter,or transshipment agreements.

(h) Consultation means a processwhereby a conference and a shipperconfer for the purpose of promoting thecommercial resolution of disputes and/or the prevention and elimination ofthe occurrence of malpractices.

(i) Cooperative working agreementmeans an agreement which establishesexclusive, preferential, or cooperativeworking relationships which are sub-ject to the Shipping Act of 1984, butwhich do not fall precisely within thearrangements of any specifically de-fined agreement.

(j) Effective agreement means anagreement approved pursuant to theShipping Act, 1916, or effective pursu-ant to an exemption under that act, oreffective under the Act.

(k) Equal access agreement means anagreement between ocean common car-riers of different nationalities, as de-termined by the incorporation or domi-cile of the carriers’ operating compa-nies, whereby such common carriersassociate for the purpose of gaining re-ciprocal access to cargo which is other-wise reserved by national decree, legis-lation, statute or regulation to car-riage by the merchant marine of thecarriers’ respective nations.

(l) Independent neutral body means adisinterested third party, authorizedby a conference and its members to re-view, examine and investigate allegedbreaches or violations by any memberof the conference agreement and/or theagreement’s properly promulgated tar-iffs, rules or regulations.

(m) Information form means the formcontaining economic informationwhich must accompany the filing ofcertain kinds of agreements.

(n) Interconference agreement meansan agreement between conferences.

(o) Joint service agreement means anagreement between ocean common car-riers operating as a joint venturewhereby a separate service is estab-lished which: (1) Holds itself out in itsown distinct operating name; (2) inde-pendently fixes its own rates, charges,


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46 CFR Ch. IV (10–1–96 Edition)§ 572.104

practices and conditions of service orchooses to participate in its operatingname in another agreement which isduly authorized to determine and im-plement such activities; (3) independ-ently publishes its own tariff or choos-es to participate in its operating namein an otherwise established tariff; (4)issues its own bills of lading; and (5)acts generally as a single carrier. Thecommon use of facilities may occurand there is no competition betweenmembers for traffic in the agreementtrade; but they otherwise maintaintheir separate identities.

(p) Marine terminal facilities meansone or more structures (and servicesconnected therewith) comprising a ter-minal unit, including, but not limitedto docks, berths, piers, aprons,wharves, warehouses, covered and/oropen storage space, cold storage plants,grain elevators and/or bulk cargo load-ing and/or unloading structures, land-ings, and receiving stations, used forthe transmission, care and convenienceof cargo and/or passengers or the inter-change of same between land and oceancommon carriers or between two oceancommon carriers. This term is not lim-ited to waterfront or port facilities andincludes so-called off-dock containerfreight stations at inland locations andany other facility from which inboundwaterborne cargo may be tendered tothe consignee or outbound cargo maybe received from shippers for vessel orcontainer loading.

(q) Marine terminal operator means aperson engaged in the United States inthe business of furnishing wharfage,dock, warehouse, or other terminal fa-cilities in connection with a commoncarrier. This term does not includeshippers or consignees who exclusivelyfurnish marine terminal facilities orservices in connection with tenderingor receiving proprietary cargo from acommon carrier by water.

(r) Maritime labor agreement means acollective-bargaining agreement be-tween an employer subject to the Actor group of such employers, and a labororganization representing employees inthe maritime or stevedoring industry,or an agreement preparatory to such acollective-bargaining agreementamong members of a multiemployerbargaining group, or an agreement spe-

cifically implementing provisions ofsuch a collective-bargaining agreementor providing for the formation, financ-ing or administration of a multiem-ployer bargaining group; but the termdoes not include an assessment agree-ment.

(s) Modification means any change, al-teration, correction, addition, deletion,or revision of an existing effectiveagreement or to any appendix to suchan agreement.

(t) Monitoring report means the reportcontaining economic informationwhich must be filed at defined inter-vals with regard to certain kinds ofagreements that are effective under theAct.

(u) Non-vessel-operating common carriermeans a common carrier that does notoperate the vessels by which the oceantransportation portion is provided andis a shipper in its relationship with anocean common carrier.

(v) Ocean common carrier means a ves-sel-operating common carrier, but theterm does not include one engaged inocean transportation by ferry boat oran ocean tramp.

(w) Ocean freight forwarder means aperson in the United States that (1)dispatches shipments from the UnitedStates via common carriers and booksor otherwise arranges space for thoseshipments on behalf of shippers, and (2)processes the documentation or per-forms related activities incident tothose shipments.

(x) Person means individuals, cor-porations, partnerships and associa-tions existing under or authorized bythe laws of the United States or of aforeign country.

(y) Pooling agreement means an agree-ment between ocean common carrierswhich provides for the division of cargocarryings, earnings, or revenue and/orlosses between the members in accord-ance with an established formula orscheme.

(z) Port means the place at which anocean common carrier originates orterminates (and/or transships) its ac-tual ocean carriage of cargo or pas-sengers as to any particular transpor-tation movement.

(aa) Rate, for purposes of this part,includes both the basic price paid by ashipper to an ocean common carrier for


271


a specified level of transportation serv-ice for a stated quantity of a particularcommodity, from origin to destination,on or after a stated effective date orwithin a defined time frame, and alsoany accessorial charges or allowancesthat increase or decrease the totaltransportation cost to the shipper.

(bb) Rate agreement means an agree-ment between ocean common carrierswhich authorizes agreement upon, oneither a binding basis under a commontariff or on a non-binding basis, or dis-cussion of, any kind of rate.

(cc) Sailing agreement means an agree-ment between ocean common carrierswhich provides for the rationalizationof service by establishing a schedule ofports which each carrier will serve, thefrequency of each carrier’s calls atthose ports, and/or the size and capac-ity of the vessels to be deployed by theparties. The term does not includejoint service agreements, or capacitymanagement or capacity regulationagreements.

(dd) Service contract means a contractbetween a shipper or shippers’ associa-tion and an ocean common carrier orconference in which the shipper orshippers’ association makes a commit-ment to provide a certain minimumquantity of cargo over a fixed time pe-riod, and the ocean common carrier orconference commits to a certain rateor rate schedule as well as a definedservice level—such as assured space,transit time, port rotation, or similarservice features. The contract may alsospecify provisions in the event of non-performance on the part of eitherparty.

(ee) Shipper means an owner or otherperson for whose account the oceantransportation of cargo is provided orthe person to whom delivery is to bemade.

(ff) Shippers’ association means agroup of shippers that consolidates ordistributes freight on a nonprofit basisfor the members of the group in orderto secure carload, truckload, or othervolume rates or service contracts.

(gg) Shippers’ requests and complaintsmeans a communication from a shipperto a conference requesting a change intariff rates, rules, regulations, or serv-ice; protesting or objecting to existingrates, rules, regulations or service; ob-

jecting to rate increases or other tariffchanges; protesting allegedly erroneousservice contract or tariff implementa-tion or application, and/or requestingto enter into a service contract. Rou-tine information requests are not in-cluded in the term.

(hh) Space charter agreement means anagreement between ocean common car-riers whereby a carrier (or carriers)agrees to provide vessel capacity forthe use of another carrier (or carriers)in exchange for compensation or serv-ices. The arrangement may include ar-rangements for equipment interchangeand receipt/delivery of cargo, but maynot include capacity management orcapacity regulation as used in this sub-part.

(ii) Through transportation means con-tinuous transportation between originand destination for which a throughrate is assessed and which is offered orperformed by one or more carriers, atleast one of which is an ocean commoncarrier, between a United States pointor port and a foreign point or port.

(jj) Transshipment agreement means anagreement between an ocean commoncarrier serving a port or point of originand another such carrier serving a portor point of destination, whereby cargois transferred from one carrier to an-other carrier at an intermediate portserved by direct vessel call of both suchcarriers in the conduct of throughtransportation. Such an agreementdoes not provide for the concerted dis-cussion, publication or otherwise fixingof rates for the account of the cargo in-terests, conditions of service or othertariff matters other than the tariff de-scription of the transshipment serviceoffered, the port of transshipment andthe participation of the nonpublishingcarrier. An agreement which involvesthe movement of cargo in a domesticoffshore trade as part of a throughmovement of cargo via transshipmentinvolving the foreign commerce of theUnited States shall be considered to bein the foreign commerce of the UnitedStates and, therefore, subject to theShipping Act of 1984 and the rules ofthis part.

(kk) Vessel-operating costs means anyof the following expenses incurred byan ocean common carrier: Salaries andwages of officers and unlicensed crew,


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46 CFR Ch. IV (10–1–96 Edition)§ 572.201

including relief crews and others regu-larly employed aboard the vessel;fringe benefits; expenses associatedwith consumable stores, supplies andequipment; vessel fuel and incidentalcosts; vessel maintenance and repairexpense; hull and machinery insurancecosts; protection and indemnity insur-ance costs; costs for other marine riskinsurance not properly chargeable tohull and machinery insurance or toprotection and indemnity insurance ac-counts; and charter hire expenses.

[49 FR 45351, Nov. 15, 1984; 49 FR 48927, Dec.17, 1984, as amended at 50 FR 6944, Feb. 19,1985; 61 FR 11574, Mar. 21, 1996]

Subpart B—Scope


(a) Ocean common carrier agreements.This part applies to agreements by oramong ocean common carriers to:

(1) Discuss, fix, or regulate transpor-tation rates, including through rates,cargo space accommodations, andother conditions of service;

(2) Pool or apportion traffic, reve-nues, earnings, or losses;

(3) Allot ports or restrict or other-wise regulate the number and char-acter of sailings between ports;

(4) Limit or regulate the volume orcharacter of cargo or passenger trafficto be carried;

(5) Engage in exlcusive, preferential,or cooperative working arrangementsamong themselves or with one or moremarine terminal operators or non-ves-sel-operating common carriers;

(6) Control, regulate, or prevent com-petition in international ocean trans-portation; and

(7) Regulate or prohibit their use ofservice contracts.

(b) Marine terminal operator agree-ments involving foreign commerce. Thispart applies to agreements (to the ex-tent the agreements involve oceantransportation in the foreign com-merce of the United States) among ma-rine terminal operators and among oneor more marine terminal operators andone or more ocean common carriers to:

(1) Discuss, fix, or regulate rates orother conditions of service; and

(2) Engage in exclusive, preferential,or cooperative working arrangements.

[49 FR 45351, Nov. 15, 1984; 49 FR 48927, Dec.17, 1984]

§ 572.202 Non-subject agreements.This part does not apply to the fol-

lowing agreements:(a) Any acquisition by any person, di-

rectly or indirectly, of any voting secu-rity or assets of any other person;

(b) Any maritime labor agreement;(c) Any agreement related to trans-

portation to be performed within or be-tween foreign countries;

(d) Any agreement among commoncarriers to establish, operate, or main-tain a marine terminal in the UnitedStates;

(e) Any agreement among marine ter-minal operators which exclusively andsolely involves transportation in theinterstate commerce of the UnitedStates;

(f) Any agreement exclusively andsolely among non-vessel-operatingcommon carriers;

(g) Any agreement exclusively andsolely among ocean freight forwarders.

Subpart C—Exemptions§ 572.301 Exemption procedures.

(a) Authority. The Commission, uponapplication or on its own motion, mayby order or rule exempt for the futureany class of agreements between per-sons subject to the Act from any re-quirement of the Act if it finds thatthe exemption will not substantiallyimpair effective regulation by theCommission, be unjustly discrimina-tory, result in substantial reduction incompetition, or be detrimental to com-merce.

(b) Optional filing. Notwithstandingany exemption from filing, or other re-quirements of the Act and this part,any party to an exempt agreement mayfile such an agreement with the Com-mission.

(c) Application for exemption. Any per-son may apply for an exemption or rev-ocation of an exemption of any class ofagreements or an individual agreementpursuant to section 16 of the Act andthis subpart. An application for exemp-tion shall state the particular require-ment of the Act for which exemption is


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sought. The application shall also in-clude a statement of the reasons whyan exemption should be granted or re-voked and shall provide informationrelevant to any finding required by theAct. Where an application for exemp-tion of an individual agreement ismade, the application shall include acopy of the agreement.

(d) Participation by interested persons.No order or rule of exemption or rev-ocation of exemption may be issued un-less opportunity for hearing has beenafforded interested persons and depart-ments and agencies of the UnitedStates.

(e) FEDERAL REGISTER notice. Noticeof any proposed exemption or revoca-tion of exemption, whether upon appli-cation or upon the Commission’s ownmotion, shall be published in the FED-ERAL REGISTER. The notice shall in-clude:

(1) A short title for the proposed ex-emption or the title of the existing ex-emption;

(2) The identity of the party propos-ing the exemption or seeking revoca-tion;

(3) A concise summary of the agree-ment or class of agreements for whichexemption is sought, or the exemptionwhich is to be revoked;

(4) A statement that the applicationand any accompanying information areavailable for inspection in the Commis-sion’s offices in Washington, D.C.; and

(5) The final date for filing commentsregarding the application.

(f) Retention of agreement by parties.Any agreement which has been exempt-ed by the Commission pursuant to sec-tion 16 of the Act shall be retained bythe parties and shall be available uponrequest by the Bureau of Economicsand Agreement Analysis for inspectionduring the term of the agreement andfor a period of three years after its ter-mination.

[49 FR 45351, Nov. 15, 1984, as amended at 59FR 67230, Dec. 29, 1994; 61 FR 11574, Mar. 21,1996]

§ 572.302 Non-substantive agreementsand non-substantive modificationsto existing agreements—exemption.

(a) A non-substantive agreement or anon-substantive modification to an ex-isting agreement is an agreement be-

tween ocean common carriers and/ormarine terminal operators, acting indi-vidually or through approved agree-ments, which:

(1) Concerns the procurement, main-tenance, or sharing of office facilities,furnishings, equipment and supplies,the allocation and assessment of thecosts thereof, or the provisions for theadministration and management ofsuch agreements by duly appointed in-dividuals.

(2) Reflects changes in the name ofany geographic locality stated therein;the name of the agreement or the nameof a party to the agreement; the namesand/or numbers of any other section 4agreement or designated provisionsthereof referred to in an agreement;the table of contents of an agreement;the date or amendment numberthrough which agreements state theyhave been reprinted to incorporateprior revisions thereto or which cor-rects typographical and grammaticalerrors in the text of the agreement; orrenumbers or reletters articles or sub-articles of agreements and referencesthereto in the text.

(3) Reflects changes in the titles orpersons or committees designatedtherein or transfers the functions ofsuch persons or committees to otherdesignated persons or committees orwhich merely establishes a committee.

(b) A copy of the non-substantiveagreement or modification shall besubmitted for information purposes inthe proper format but is otherwise ex-empt from the notice and waiting pe-riod requirements of the Act, and ofthis part.

(c) Parties to agreements may seek adetermination from the Director, Bu-reau of Economics and AgreementAnalysis as to whether a particularmodification is non-substantive.

(d) The filing fee for such agreementsis described in § 572.401(f).

[49 FR 45351, Nov. 15, 1984, as amended at 50FR 6944, Feb. 19, 1985; 59 FR 63908, Dec. 12,1994; 59 FR 67230, Dec. 29, 1994; 61 FR 11574,Mar. 21, 1996]

§ 572.303 Husbanding agreements—ex-emption.

(a) A husbanding agreement is anagreement between a principal and anagent both of which are subject to the


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Act and which provides for the agent’shandling of routine vessel operating ac-tivities in port, such as notifying portofficials of vessel arrivals and depar-tures; ordering pilots, tugs, and line-handlers; delivering mail; transmittingreports and requests from the Masterto the owner/operator; dealing withpassenger and crew matters; and pro-viding similar services related to theabove activities. The term does not in-clude an agreement which provides forthe solicitation or booking of cargoes,signing contracts or bills of lading andother related matters, nor does it in-clude an agreement that prohibits theagent from entering into similar agree-ments with other carriers.

(b) A husbanding agreement is ex-empt from the filing requirements ofthe Act and of this part.

(c) The filing fee for such agreementsis described in § 572.401(f).

[49 FR 45351, Nov. 15, 1984 as amended at 49FR 48927, Dec. 17, 1984; 59 FR 63908, Dec. 12,1994; 61 FR 11574, Mar. 21, 1996]

§ 572.304 Agency agreements—exemp-tion.

(a) An agency agreement is an agree-ment between a principal and an agentboth of which are subject to the Act,which provides for the agent’s solicita-tion and booking of cargoes and sign-ing contracts of affreightment and billsof lading on behalf of an ocean commoncarrier. Such an agreement may ormay not also include husbanding serv-ice functions and other functions inci-dental to the performance of duties byagents, including processing of claims,maintenance of a container equipmentinventory control system, collectionand remittance of freight and reportingfunctions.

(b) An agency agreement betweenpersons subject to the Act is exemptfrom the filing requirements of the Actand of this part, except those: (1)Where a common carrier is to be theagent for a competing carrier in thesame trade; or (2) which permit anagent to enter into similar agreementswith more than one carrier in a trade.


[49 FR 45351, Nov. 15, 1984 as amended at 59FR 63908, Dec. 12, 1994; 61 FR 11574, Mar. 21,1996]

§ 572.305 Equipment interchangeagreements—exemption.

(a) An equipment interchange agree-ment is an agreement between two ormore ocean common carriers for (1) theexchange of empty containers, chassis,empty LASH/SEABEE barges, and re-lated equipment; and (2) the transpor-tation of the equipment as required,payment therefor, management of thelogistics of transferring, handling andpositioning equipment, its use by thereceiving carrier, its repair and main-tenance, damages thereto, and liabilityincidental to the interchange of equip-ment.

(b) An equipment interchange agree-ment is exempt from the filing require-ments of the Act and of this part.


[49 45351, Nov. 15, 1984 as amended at 59 FR63908, Dec. 12, 1994; 61 FR 11574, Mar. 21, 1996]

§ 572.306 Non-exclusive transshipmentagreements—exemption.

(a) A nonexclusive transshipmentagreement is an agreement by whichone ocean common carrier serving aport of origin by direct vessel call andanother such carrier serving a port ofdestination by direct vessel call pro-vide transportation between such portsvia an intermediate port served by di-rect vessel call of both such carriersand at which cargo will be transferredfrom one to the other and which agree-ment does not: (1) Prohibit either car-rier from entering into similar agree-ments with other carriers; (2) guaran-tee any particular volume of traffic oravailable capacity; or (3) provide forthe discussion or fixing of rates for theaccount of the cargo interests, condi-tions of service or other tariff mattersother than the tariff description of theservice offered as being by means oftransshipment, the port of trans-shipment and the participation of thenonpublishing carrier.

(b) A non–exclusive transshipmentagreement is exempt from the filing re-quirements of the Act and of this part,provided that the tariff provisions setforth in paragraph (c) of this sectionand the content requirements of para-graph (d) of this section are met.

(c) The applicable tariff or tariffsshall provide:


275


(1) The through rate;(2) The routings (origin, trans-

shipment and destination ports); addi-tional charges, if any (i.e. port arbi-trary and/or additional transshipmentcharges); and participating carriers;and

(3) A tariff provision substantially asfollows:

The rules, regulations, and rates in thistariff apply to all transshipment arrange-ments between the publishing carrier or car-riers and the participating, connecting orfeeder carrier. Every participating connect-ing or feeder carrier which is a party totransshipment arrangements has agreed toobserve the rules, regulations, rates, androutings established herein as evidenced by aconnecting carrier agreement between theparties.

(d) Nonexclusive transshipmentagreements must contain the entire ar-rangement between the parties, mustcontain a declaration of the nonexclu-sive character of the arrangement andmay provide for:

(1) The identification of the partiesand the specification of their respec-tive roles in the arrangement;

(2) A specification of the governedcargo;

(3) The specification of responsibilityfor the issuance of bills of lading (andthe assumption of common carriage-as-sociated liabilities) to the cargo inter-ests;

(4) The specification of the origin,transshipment and destination ports;

(5) The specification of the governingtariff(s) and provision for their succes-sion;

(6) The specification of the particu-lars of the nonpublishing carrier’s con-currence/participation in the tariff ofthe publishing carrier;

(7) The division of revenues earned asa consequence of the described car-riage;

(8) The division of expenses incurredas a consequence of the described car-riage;

(9) Termination and/or duration ofthe agreement;

(10) Intercarrier indemnification orprovision for intercarrier liabilitiesconsequential to the contemplated car-riage and such documentation as maybe necessary to evidence the involvedobligations;

(11) The care, handling and liabilitiesfor the interchange of such carrierequipment as may be consequential tothe involved carriage;

(12) Such rationalization of servicesas may be necessary to ensure the costeffective performance of the con-templated carriage; and

(13) Such agency relationships asmay be necessary to provide for thepickup and/or delivery of the cargo.

(e) No subject other than as listed inparagraph (d) of this section may be in-cluded in exempted nonexclusive trans-shipment agreements.

(f) The filing fee for such agreementsis described in § 572.401(f).

[49 FR 45351, Nov. 15, 1984 as amended at 49FR 48927, Dec. 17, 1984; 59 FR 63908, Dec. 12,1994; 61 FR 11574, Mar. 21, 1996]

§ 572.307 Marine terminal agree-ments—exemption.

(a) Marine terminal agreement meansan agreement, understanding, or asso-ciation written or oral (including anymodification, cancellation or appendix)that applies to future, prospective ac-tivities between or among the partiesand which relates solely to marine ter-minal facilities and/or services amongmarine terminal operators and amongone or more marine terminal operatorsand one or more ocean common car-riers that completely sets forth the ap-plicable rates, charges, terms and con-ditions agreed to by the parties for thefacilities and/or services provided forunder the agreement. The term doesnot include a joint venture arrange-ment among marine terminal operatorsto establish a separate, distinct entitythat fixes its own rates and publishesits own tariff.

(b) Marine terminal conference agree-ment means an agreement between oramong two or more marine terminaloperators and/or ocean common car-riers for the conduct or facilitation ofmarine terminal operations in connec-tion with waterborne common carriagein the foreign commerce of the UnitedStates and which:

(1)(i) Provides for the fixing of andadherence to uniform marine terminalrates, charges, practices and conditionsof service relating to the receipt, han-dling and/or delivery of passengers orcargo for all members; and/or


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(ii) Provides for the conduct of thecollective administrative affairs of thegroup; and

(2) May include the filing of a com-mon marine terminal tariff in thename of the group and in which all themembers participate, or, in the eventof multiple tariffs, each member par-ticipates in at least one such tariff.

(c) Marine terminal discussion agree-ment means an agreement between oramong two or more marine terminaloperators and/or marine terminal con-ferences and/or ocean common carrierssolely for the discussion of subjects in-cluding marine terminal rates, charges,practices and conditions of service re-lating to the receipt, handling and/ordelivery of passengers or cargo.

(d) Marine terminal interconferenceagreement means an agreement betweenor among two or more marine terminalconference and/or marine terminal dis-cussion agreements.

(e) All marine terminal agreements,as defined in § 572.307(a), with the ex-ception of marine terminal conference,marine terminal interconference andmarine terminal discussion agreementsas defined in § 572.307 (b), (c) and (d) areexempt from the waiting period re-quirements of section 6 of the ShippingAct of 1984 and part 572 of this chapteron the condition that they be filed inthe form and manner presently re-quired by part 572 of this chapter.

(f) Agreements filed for and entitledto exemption under this paragraph willbe exempted from the waiting periodrequirements effective on the date oftheir filing with the Commission.

(g) The filing fee for such agreementsis described in § 572.401(f).

[52 FR 18697, May 19, 1987, as amended at 59FR 63908, Dec. 12, 1994]

§ 572.308 Agreements between oramong wholly-owned subsidiariesand/or their parent—exemption.

(a) An agreement between or amongwholly-owned subsidiaries and/or theirparent means an agreement under sec-tion 4 of the 1984 Act between or amongan ocean common carrier or marineterminal operator subject to the 1984Act and any one or more ocean com-mon carriers or marine terminal opera-tors which are ultimately owned 100percent by that ocean common carrier

or marine terminal operator, or anagreement between or among suchwholly-owned carriers or terminal op-erators.

(b) All agreements between or amongwholly-owned subsidiaries and/or theirparent are exempt from the filing re-quirements of the 1984 Act and of thispart.

(c) Common carriers are exempt fromsection 10(c) of the 1984 Act to the ex-tent that the concerted activities pro-scribed by that section result solelyfrom agreements between or amongwholly-owned subsidiaries and/or theirparent.

(d) All agreements between or amongwholly-owned subsidiaries and/or theirparent are exempt from the require-ments of § 572.301(f) of this part.

(e) The filing fee for such agreementsis described in § 572.401(f).

[53 FR 11073, Apr. 5, 1988, as amended at 59FR 63908, Dec. 12, 1994; 61 FR 11574, Mar. 21,1996]

§ 572.309 Miscellaneous modificationsto agreements—exemptions.

(a) Each of the following types ofmodifications to agreements is exemptfrom the notice and waiting period re-quirements of the Act and of this partprovided that such modifications arefiled for informational purposes in theproper format:

(1) Any modification which cancelsan effective agreement.

(2) Any modification to the followingdesignated agreement articles:

(i) Article 3—Parties to the agreement(limited to conference agreements, vol-untary ratemaking agreements havingno other anticompetitive authority(e.g., pooling authority or capacity re-duction authority), and discussionagreements among passenger vessel op-erating common carriers which areopen to all ocean common carriers op-erating passenger vessels of a class de-fined in the agreements and which donot contain ratemaking, pooling, jointservice, sailing or space chartering au-thority).

(ii) Article 6—Officials of the agree-ment and delegations of authority.

(iii) Article 10—Neutral body policing(limited to the description of neutralbody authority and procedures relatedthereto).


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(b) Any modification exempt underparagraph (a) is effective upon filing.


[50 FR 16703, Apr. 29, 1985. Redesignated at 52FR 18697, May 19, 1987 and 53 FR 11073, Apr.5, 1988; 54 FR 53322, Dec. 28, 1989; 57 FR 40619,Sept. 4, 1992; 59 FR 63908, Dec. 12, 1994; 61 FR11574, Mar. 21, 1996]

§ 572.310 Marine terminal servicesagreements—exemption.

(a) Marine terminal services agreementmeans an agreement, contract, under-standing, arrangement or association,written or oral (including any modi-fication, cancellation or appendix) be-tween a marine terminal operator andan ocean common carrier that appliesto marine terminal services as definedin 46 CFR 514.2 (including any marineterminal facilities, as defined in 46CFR 514.2, which may be provided inci-dentally to such marine terminal serv-ices) that are provided to and paid forby an ocean common carrier. The term‘‘marine terminal services agreement’’does not include:

(1) Any agreement which conveys tothe involved carrier any rights to oper-ate any marine terminal facility bymeans of a lease, license, permit, as-signment, land rental, or similar otherarrangement for the use of marine ter-minal facilities or property; or

(2) Any agreement (or any modifica-tion to any agreement) previously filedwith the Commission pursuant to theShipping Act of 1984, unless said agree-ment, together with all previously-filed modifications, have been formallywithdrawn.

(b) All marine terminal servicesagreements as defined in § 572.310(a) areexempt from the filing and waiting pe-riod requirements of sections 5 and 6 ofthe Shipping Act of 1984 and Part 572 ofthis chapter on condition that:

(1) They do not include rates,charges, rules and regulations whichare determined through a marine ter-minal conference agreement, as definedin 46 CFR 572.307(b); and

(2) No antitrust immunity is con-ferred pursuant to section 7 of theShipping Act of 1984, 46 U.S.C. app.1706, with regard to terminal servicesprovided to a common carrier by waterunder a marine terminal services

agreement which is not filed with theCommission pursuant to the exemptionprovided by § 572.310(b).


[57 FR 4583, Feb. 6, 1992, as amended at 59 FR63908, Dec. 12, 1994; 60 FR 27230, May 23, 1995]

§ 572.311 Marine terminal facilitiesagreement—exemption.

(a) Marine terminal facilities agreementmeans any agreement between oramong two or more marine terminaloperators, or between one or more ma-rine terminal operators and one ormore ocean common carriers, to theextent that the agreement involvesocean transportation in the foreigncommerce of the United States, whichconveys to any of the involved partiesany rights to operate any marine ter-minal facility by means of lease, li-cense, permit, assignment, land rental,or other similar arrangement for theuse of marine terminal facilities orproperty.

(b) All marine terminal facilitiesagreements as defined in § 572.311(a) areexempt from the filing and waiting pe-riod requirements of sections 5 and 6 ofthe Shipping Act of 1984 and this part572.

(c) Copies of any and all marine ter-minal facilities agreements currentlyin effect shall be provided, by partiesto such agreements, to any requestingparty for a reasonable copying andmailing fee.

(d) The filing fee for such agreementsis described in § 572.401(f).

[58 FR 5631, Jan. 22, 1993, as amended at 59FR 63908, Dec. 12, 1994]

Subpart D—Filing of Agreements

§ 572.401 General requirements.(a) All agreements (including oral

agreements reduced to writing in ac-cordance with the Act) subject to thispart and filed with the Commission forreview and disposition pursuant to sec-tion 6 of the Act, shall be submittedduring regular business hours to theSecretary, Federal Maritime Commis-sion, Washington, D.C. 20573. Such fil-ing shall consist of:

(1) A true copy and 7 additional cop-ies of the filed agreement;


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46 CFR Ch. IV (10–1–96 Edition)§ 572.402

(2) Where required by this part, anoriginal and five copies of the com-pleted Information Form Referenced atsubpart E of this part; and

(3) A letter of transmittal as de-scribed in paragraph (b) of this section.

(b)(1) A filed agreement, to includesuch supporting documents as are sub-mitted, shall be forwarded to the Com-mission via a letter of transmittal.

(2) The letter of transmittal shall: (i)Identify all of the documents beingtransmitted including, in the instanceof a modification to an effective agree-ment, the full name of the effectiveagreement, the Commission-assignedagreement number of the effectiveagreement and the revision, page and/or appendix number of the modifica-tion being filed; (ii) provide a concise,succinct summary of the filed agree-ment or modification separate andapart from any narrative intended toprovide support for the acceptability ofthe agreement or modification; (iii)clearly provide the typewritten or oth-erwise imprinted name, position, busi-ness address and telephone number ofthe forwarding party; and, (iv) besigned in the original by the forward-ing party or on the forwarding party’sbehalf by an authorized employee oragent of the forwarding party.

(3) To facilitate the timely and accu-rate publication of the FEDERAL REG-ISTER Notice, the letter of transmittalshall also provide a current list of theagreement’s participants where suchinformation is not provided elsewherein the transmitted documents.

(c) Any agreement which does notmeet the filing requirements of thissection, including any applicable Infor-mation Form requirements, shall be re-jected in accordance with § 572.601.

(d) Assessment agreements shall befiled and shall be effective upon filing.

(e) Parties to agreements with expi-ration dates shall file any modificationseeking renewal for a specific term orelimination of a termination date insufficient time to accommodate thewaiting period required under the Act.

(f) Agreement filings for Commissionaction requiring an Information Formand review by the Commission shall beaccompanied by remittance of a $1,402filing fee; agreement filings for Com-mission action not requiring an Infor-

mation Form, but requiring review bythe Commission, shall be accompaniedby remittance of a $695 filing fee;agreement filings reviewed under dele-gated authority shall be accompaniedby remittance of a $353 filing fee; andagreement filings for terminal and car-rier exempt agreements shall be ac-companied by remittance of a $120 fil-ing fee.

[49 FR 45351, Nov. 15, 1984, as amended at 57FR 40619, Sept. 4, 1992; 59 FR 63908, Dec. 12,1994; 61 FR 11574, Mar. 21, 1996]

§ 572.402 Form of agreements.The requirements of this section

apply to all agreements except for can-cellations, marine terminal agree-ments, and assessment agreements.

(a) Agreements shall be clearly andlegibly typewritten on one side only of81⁄2 inch by 11 inch durable white loose-leaf paper, providing a margin of notless than three-quarters of an inch onall edges.

(b) The first page of every agreementor appendix shall be the Title Page andshall include:

(1) The name in which the agreementholds out service, or, in the absence ofsuch a holding out, the full name of theagreement;

(2) Once assigned, the Commission-assigned agreement number;

(3) The generic classification of theagreement in conformity with the defi-nitions in § 572.104;

(4) The date on which the entireagreement was last republished in ac-cordance with § 572.403(g); and

(5) If applicable, the currently effec-tive expiration date of the agreementand/or any specific provision thereof.

(c) Each agreement page (includingmodifications and appendices) shall beidentified by printing the agreementname (as shown on the agreement TitlePage) and, once assigned, the applica-ble Commission-assigned agreementnumber at the top of each page.

(d) Each agreement and/or modifica-tion filed will be accompanied by a sep-arate signature page, appended as thelast page of the item, which is signedin the original by each of the partiespersonally or by an authorized rep-resentative, indicating immediatelybelow each signature, the typewrittenfull name of the signing party and his


279


or her position, including organiza-tional affiliation.

(e) The body of the agreement shallcontain:

(1) Immediately following the TitlePage, a Table of Contents providing forthe location of all agreement provi-sions.

(2) Following the Table of Contents,the body of the agreement setting forththe operative provisions of the agree-ment in the order prescribed by§§ 572.403 and 572.404. Any additionalmaterial/provisions shall be set forthas consecutively numbered articles.

(f) Any nonsubstantive provisions, asdefined in § 572.302, may be separatedfrom the main body of the agreementtext by the inclusion of an appendix tothe agreement. Additional provisionswhich are permitted to be included inan appendix are referred to in§§ 572.403(b)(3), 572.403(b)(6) and572.404(a)(1). Such appendices mustcomply with the format requirementsof paragraphs (a) and (c) of this sec-tion. Such appendices are to be serial-ized alphabetically with the first suchappendix being designated on its firstpage as appendix A.

(g) All pages subsequent to the TitlePage shall be numbered in the upperright-hand corner. At the option of theparties, the numbering of the pagesmay start with the first page followingthe Title Page as Page No. 1 and con-tinue consecutively thereafter; or, inthe alternative, the pages containingthe Table of Contents may be dis-cretely numbered using consecutiveRoman numerals with all pages subse-quent to the Table of Contents beingconsecutively numbered beginningwith Page No. 1. In either event, thefirst edition of any one page shall bedesignated in the upper right-hand cor-ner as Original Page No. ——.

[49 FR 45351, Nov. 15, 1984; 49 FR 48928, Dec.17, 1984; 57 FR 40619, Sept. 4, 1992; 61 FR 11575,Mar. 21, 1996]

§ 572.403 Agreement provisions—orga-nization.

(a) All agreements, except for can-cellations, marine terminal agree-ments, and assessment agreements,shall be organized and shall include thecontent as provided by this section.The article numbers hereinafter enu-

merated are reserved for their particu-lar respective provision or authority asindicated in this section and § 572.404and may not be used for any other sub-ject or purpose nor may the specifiedsubject matter appear elsewhere in theagreement except as herein provided.In the instance of a legitimately inap-plicable provision, the article numberand title are to be included in the textfollowed by the word, ‘‘None’’.

(b) All agreements shall organize andnumber the following articles in thefollowing order and shall observe theguidelines as to content as provided inthis section. Additional articles re-quired to definitively express the com-plete understanding between the par-ties to the agreement and not other-wise incorporated in appendices to theagreement shall immediately followthe articles enumerated in this subpart(and, where applicable, in § 572.404) andshall be numbered consecutively, com-mencing with Article 14.

(1) Article 1—Full name of the agree-ment.

(2) Article 2—Purpose of the agreement.(3) Article 3—Parties to the agreement.

List the current parties to the agree-ment to include for each participant:(i) the full legal name of the party toinclude any FMC-assigned agreementnumber associated with that name; and(ii) the address of its principal office(to the exclusion of the address of anyagent or representative not an em-ployee of the participating carrier orassociation). In the alternative to pub-lishing the membership of the agree-ment in Article 3, the membership maybe published in a designated appendixto the agreement and the designatedappendix indicated by cross referencein Article 3.

(4) Article 4—Geographic scope of theagreement. State the ports or portranges to which the agreement appliesand any inland points or areas to whichit also applies with respect to the exer-cise of the collective activities con-templated and authorized in the agree-ment.

(5) Article 5—Overview of agreement au-thority. State the authorities, as setforth in § 572.201 of this part, intendedto be collectively exercised under theauspices of the agreement. To the ex-tent that the summary provided does


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not represent the full arrangement be-tween the parties, additional articlesor appendices of the parties’ own des-ignation and subsequent to these enu-merated articles will be required toprovide the specification of the author-ity to be exercised and the mechanicsof that exercise. Article 5 is not nec-essarily definitive of the authoritythat the parties may collectively exer-cise pursuant to the agreement andparties may rely on the contents of theentire agreement as authority for theiractivities.

(6) Article 6—Officials of the agreementand delegations of authority. Specify, byorganizational title, the administra-tive and executive officials determinedby the parties to the agreement to beresponsible for designated affairs of theagreement and the respective dutiesand authorities delegated to those offi-cials. At a minimum, specify: (i) Theofficials with authority to file agree-ments and agreement modificationsand to submit associated supportingmaterials or with authority to delegatesuch authority; and, (ii) a statement asto any designated U.S. representativeof the agreement required by this chap-ter. Where convenient, the contents ofthis article may be published in a des-ignated appendix to the agreement andthe designated appendix indicated bycross reference in Article 6.

(7) Article 7—Membership, withdrawal,readmission and expulsion. Specify theterms and conditions for admission,withdrawal, readmission and expulsionto or from membership in the agree-ment, including membership fees, re-fundable deposits and other fees orcharges associated with membership.Two-party agreements which do not in-volve any form of rate, charge or tariffdetermination or publication authorityand which do not otherwise have anyconditions of agreement participationother than the commitment of thephysical resources of the respectiveparties are relieved of the require-ments of this subparagraph. In such acase, the article number and nameshall be designated as provided in para-graphs (a) and (b)(1) of this section.

(8) Article 8—Voting. Specify the pro-cedures, including quorum require-ments, by which the agreement mem-bership exercises its collective author-

ity to choose, endorse, decide the dis-position of, defeat, or authorize anyparticular matter, issue or activity.

(9) Article 9—Duration and terminationof the agreement. Specify, where appli-cable, the date on which the agreementterminates and describe the proceduresto be followed to terminate the agree-ment.

[49 FR 45351, Nov. 15, 1984; 49 FR 48928, Dec.17, 1984. Redesignated and amended at 61 FR11575, Mar. 21, 1996]

§ 572.404 Organization of conferenceand interconference agreements.

(a) Each conference agreement in ad-dition to Articles 1 through 9 containedin § 572.403, and such other matters asmay be necessary to express the fullunderstanding of the parties, shall in-clude the following articles organizedand including the content as providedin this section:

(1) Article 10—Neutral body policing.State that, at the request of any mem-ber, the conference shall engage theservices of an independent neutral bodyto fully police the obligations of theconference and its members. Include adescription of any such neutral bodyauthority and procedures related there-to. In the alternative to publishing theneutral body and procedures descrip-tion in Article 10, the description maybe published in a designated appendixto the agreement and the designatedappendix indicated by cross referencein Article 10.

(2) Article 11—Prohibited acts. State af-firmatively that the conference shallnot engage in conduct prohibited bysection 10(c)(1) or 10(c)(3) of the Act.

(3) Article 12—Consultation: Shippers’requests and complaints. Specify the pro-cedures for consultation with shippersand for handling shippers’ requests andcomplaints.

(4) Article 13—Independent action.The regulations for independent ac-

tion are contained in section 572.801.(5) Article 14—Service contracts.The regulations for service contracts

are contained in section 572.802.(b)(1) Each interconference agree-

ment, in addition to Articles 1 through9 contained in § 572.403, and Articles 10,11, and 12 contained in paragraph (a) ofthis section, shall include the followingarticle: Article 13—Independent Action


281


which specifies the independent actionprocedures of the agreement.

(2) Each agreement between carriersnot members of the same conferencemust provide the right of independentaction for each carrier.

(3) Each agreement between con-ferences must provide the right of inde-pendent action for each conference.

[49 FR 45351, Nov. 15, 1984, as amended at 53FR 7528, Mar. 9, 1988; 57 FR 54531, Nov. 19,1992. Redesignated and amended at 61 FR11575, Mar. 21, 1996]

§ 572.405 Modifications of agreements.The requirements of this section

apply to all agreements except for ma-rine terminal agreements and assess-ment agreements.

(a) Agreement modifications shall be:filed in accordance with the provisionsof 572.401 and in the format specified in572.402; with the content and organiza-tion specified in 572.403 and 572.404 andin accordance with this section.

(b) Agreement modifications shall bemade by reprinting the entire page onwhich the matter being changed is pub-lished. Such modified pages shall bedesignated as revised pages and shallpublish in the upper right-hand cornerof the new page the consecutive de-nomination of the revision, e.g., 1st Re-vised Page 5.

(c) If a modification exceeds the pagebeing modified and the parties do notwish to modify the entire agreement,the additional material may be pub-lished on an original page, designatedwith the same number as the pagebeing modified and with an alphabet-ical suffix, i.e. Original Page 5a.

(d) The language being modified shallbe indicated on the page filed as fol-lows:

(1) Language being deleted or super-seded shall be struck through; and,

(2) New and initial or replacementlanguage shall immediately follow thelanguage being superseded and be un-derlined.

(3) As an alternative to publishingsuch indications of change on the filedpage, the filed page may be submitteddevoid of such indications if the filingis accompanied by a page, submittedfor information/illustration only, set-ting forth the proposed modificationsin accordance with the format pre-

scribed in paragraphs (d) (1) and (2) ofthis section.

(e) When a revised or new page is re-vised, or the entire agreement is re-issued, the change indications in para-graphs (d)(1) and (d)(2) of this sectionare to be deleted from the republishedpages.

(f) If a modification requires the relo-cation of the provisions of the agree-ment, such modification shall be ac-companied by a revised Table of Con-tents page which shall report the newlocation of the agreement’s provisions.

(g)(1) In the instance of an agreementwhich publishes the indications ofmodifications, specified in paragraph(d) of this section on the filed agree-ment page itself, then, not later thantwo years after the last modification tothe agreement, the entire agreementshall be republished incorporating suchmodifications as have been made andshall supersede the previous edition ofthe agreement.

(2) Such republished agreement willbe filed with the Commission in ac-cordance with the filing (except as pro-vided in paragraph (g)(3) of this sec-tion), format and content requirementsof this part and shall contain nothingother than the previously effective lan-guage and such nonsubstantive modi-fications as are necessary to accom-plish the republication.

(3) The filing of a republished agree-ment, as described in paragraph (g)(2)of this section, may be accomplishedby filing only an executed original truecopy. No Information Form require-ments apply to the filing of a repub-lished agreement.

[49 FR 45351, Nov. 15, 1984. Redesignated andamended at 61 FR 11575, Mar. 21, 1996]

§ 572.406 Application for waiver.

(a) Upon showing of good cause, theCommission may waive the require-ments of §§ 572.401, 572.402, 572.403,572.404 and 572.405.

(b) Requests for such a waiver shallbe submitted in advance of the filing ofthe agreement to which the requestedwaiver would apply and shall state:

(1) The specific provisions fromwhich relief is sought;

(2) The special circumstances requir-ing the requested relief; and


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46 CFR Ch. IV (10–1–96 Edition)§ 572.407

(3) Why granting the requested waiv-er will not substantially impair effec-tive regulation of the agreement.

[61 FR 11575, Mar. 21, 1996]

§ 572.407 Complete and definite agree-ments.

(a) Any agreement required to befiled by the Act and this part shall bethe complete agreement among theparties and shall specify in detail thesubstance of the understanding of theparties.

(b) Except as provided in paragraph(c) of this section, agreement clauseswhich contemplate a further agree-ment or give the parties authority todiscuss and/or negotiate a furtheragreement, the terms of which are notfully set forth in the enabling agree-ment, will be permitted only if the ena-bling agreement indicates that anysuch further agreement cannot go intoeffect unless filed and effective underthe Act.

(c) Further specific agreements orunderstandings which are establishedpursuant to express enabling authorityin an agreement are considered inter-stitial implementation and are per-mitted without further filing undersection 5 of the Act only if the furtheragreement concerns routine oper-ational or administrative matters, in-cluding the establishment of tariffrates, rules, and regulations.

[49 FR 45351, Nov. 15, 1984. Redesignated at 61FR 11575, Mar. 21, 1996]

Subpart E—Information FormRequirements

SOURCE: 61 FR 11575, Mar. 21, 1996, unlessotherwise noted.

§ 572.501 General requirements.(a) Certain agreements must be ac-

companied, upon their initial filing,with an Information Form settingforth information and data on the fil-ing parties’ prior cargo carryings, reve-nue results and port service patterns.

(b) The filing parties to an agreementsubject to this subpart shall completeand submit an original and five copiesof the applicable Information Form at

the time the agreement is filed. Copiesof the applicable Form may be ob-tained at the Office of the Secretary orby writing to the Secretary of theCommission.

(c) A complete response in accord-ance with the instructions on the In-formation Form shall be supplied toeach item. Whenever the party answer-ing a particular part is unable to sup-ply a complete response, that partyshall provide either estimated data(with an explanation of why precisedata are not available) or a detailedstatement of reasons for noncompli-ance and the efforts made to obtain therequired information.

(d) The Information Form for a par-ticular agreement may be supple-mented with any other information ordocumentary material.

(e) The Information Form and anyadditional information submitted inconjunction with the filing of a par-ticular agreement shall not be dis-closed except as provided in § 572.608.


Agreements subject to this subpartare divided into two classes, Class A/Band Class C. When used in this subpart:

(a) Class A/B agreement means anagreement that is one or more of thefollowing:

(1) A rate agreement as defined in§ 572.104(aa) and § 572.104(bb);

(2) A joint service agreement as de-fined in § 572.104(o);

(3) A pooling agreement as defined in§ 572.104(y);

(4) An agreement authorizing discus-sion or exchange of data on vessel-oper-ating costs as defined in § 572.104(kk);or

(5) An agreement authorizing regula-tion or discussion of service contractsas defined in § 572.104(dd).

(b) Class C agreement means anagreement that is one or more of thefollowing:

(1) A sailing agreement as defined in§ 572.104(cc); or

(2) A space charter agreement as de-fined in § 572.104(hh).


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§ 572.503 Information form for Class A/B agreements.

The Information Form for Class A/Bagreements, with accompanying in-structions that are intended to facili-tate the completion of the Form, is setforth in appendix A of this part.

The instructions should be read inconjunction with the Shipping Act of1984 and with this part 572.

§ 572.504 Information form for Class Cagreements.

The Information Form for Class Cagreements, with accompanying in-structions that are intended to facili-tate the completion of the Form, is setforth in appendix B of this part. Theexplanation and instructions should beread in conjunction with the ShippingAct of 1984 and 46 CFR part 572.

§ 572.505 Application for waiver.(a) Upon a showing of good cause, the

Commission may waive any part of theinformation form requirements of§ 572.503 or § 572.504.

(b) A request for such a waiver mustbe approved in advance of the filing ofthe information form to which the re-quested waiver would apply. The Com-mission will take into account thepresence or absence of shipper com-plaints in considering an applicationfor a waiver. Requests for a waivershall state:

(1) The specific requirements fromwhich relief is sought;

(2) The special circumstances requir-ing the requested relief; and

(3) Why granting the requested waiv-er will not substantially impair effec-tive regulation of the agreement, ei-ther during pre-implementation reviewor during post-implementation mon-itoring.


§ 572.601 Preliminary review—rejec-tion of agreements.

(a) The Commission shall make apreliminary review of each filed agree-ment to determine whether the agree-ment is in compliance with the filingrequirements of the Act and this partand, where applicable, whether the ac-companying Information Form is com-

plete or, where not complete, whetherthe deficiency is adequately explainedor is excused by a waiver granted bythe Commission under § 572.505.

(b)(1) The Commission shall rejectany agreement that otherwise fails tocomply with the filing and InformationForm requirements of the Act and thispart. The Commission shall notify inwriting the person filing the agreementof the reason for rejection of the agree-ment. The entire filing, including theagreement, the Information Form andany other information or documentssubmitted, shall be returned to the fil-ing party.

(2) Should the agreement be refiled,the full waiting period must be ob-served.


§ 572.602 Federal Register notice.

(a) With the exception of marine ter-minal facilities agreements, as definedin § 572.311(a), a notice of any filedagreement which is not rejected pursu-ant to § 572.601 will be transmitted tothe FEDERAL REGISTER within sevendays of the date of filing.

(b) The notice will include:(1) A short title for the agreement;(2) The identity of the parties to the

agreement and the filing party;(3) The Federal Maritime Commis-

sion agreement number;(4) A concise summary of the agree-

ment’s contents;(5) A statement that the agreement

is available for inspection at the Com-mission’s offices; and

(6) The final date for filing commentsregarding the agreement.

[49 FR 45351, Nov. 15, 1984, as amended at 58FR 5631, Jan. 22, 1993]

§ 572.603 Comment.

(a) Persons may file with the Sec-retary written comments regarding afiled agreement. Such comments willbe submitted in an original and ten (10)copies and are not subject to any limi-tations except the time limits providedin the FEDERAL REGISTER notice. Late-filed comments will be received only byleave of the Commission and only upona showing of good cause. If requested,


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46 CFR Ch. IV (10–1–96 Edition)§ 572.604

comments and any accompanying ma-terial shall be accorded confidentialtreatment to the fullest extent per-mitted by law. Such requests must in-clude a statement of legal basis forconfidential treatment including thecitation of appropriate statutory au-thority. Where a determination ismade to disclose all or a portion of acomment, notwithstanding a requestfor confidentiality, the party request-ing confidentiality will be notifiedprior to disclosure.

(b) The filing of a comment does notentitle a person to: (1) reply to thecomment by the Commission; (2) theinstitution of any Commission or courtproceeding; (3) discussion of the com-ment in any Commission or court pro-ceeding concerning the filed agree-ment; or (4) participation in any pro-ceeding which may be instituted.


§ 572.604 Waiting period.(a) The waiting period before an

agreement becomes effective shallcommence on the date that an agree-ment is filed with the Commission.

(b) Unless suspended by a request foradditional information or extended bycourt order, the waiting period termi-nates and an agreement becomes effec-tive on the latter of the 45th day afterthe filing of the agreement with theCommission or on the 30th day afterpublication of notice of the filing inthe FEDERAL REGISTER.

(c) The waiting period is suspendedon the date when the Commission, ei-ther orally or in writing, requests addi-tional information or documentary ma-terials pursuant to section 6(d) of theAct. The waiting period resumes on thedate of receipt of the additional mate-rial or of a statement of the reasons fornoncompliance, and the agreement be-comes effective in 45 days unless thewaiting period is further extended bycourt order.

§ 572.605 Requests for expedited ap-proval.

(a) Upon written request of the filingparty, the Commission may shortenthe review period. Accompanying therequest, the filing party should providea full explanation, with reference to

specific facts and circumstances, of thenecessity for a shortened waiting pe-riod. If the Commission decides to ap-prove an abbreviated waiting period,the term will be decided after consider-ation of the parties’ needs and theCommission’s ability to perform its re-view functions under a reduced timeschedule. In no event, however, maythe period be shortened to less thanfourteen days after the publication ofthe notice of the filing of the agree-ment in the FEDERAL REGISTER. When arequest for expedited approval is de-nied by the Commission, the normalwaiting period specified in § 572.604 willapply. Such expedition will not begranted routinely and will be grantedonly in exceptional circumstanceswhich include but are not limited to:the impending expiration of the agree-ment; operational urgency; Federal orState imposed time limitations; orother reasons which, in the Commis-sion’s discretion, constitute groundsfor granting the request.

(b) A request for expedited approvalwill be considered for an agreementwhose waiting period has resumed afterhaving been suspended by a request foradditional information.

[49 FR 45351, Nov. 15, 1984, as amended at 50FR 16704, Apr. 29, 1985]

§ 572.606 Requests for additional infor-mation.

(a) The Commission may requestfrom the filing party any additional in-formation and documentary materialnecessary to complete the statutory re-view required by section 6 of the Act.The request shall be made prior to theexpiration of the waiting period. Alladditional information and documen-tary material shall be submitted to theDirector, Bureau of Economics andAgreement Analysis, Federal MaritimeCommission, Washington, DC 20573. Ifthe request is not fully complied with,a statement of reasons for noncompli-ance shall be provided for each item orportion of such request which is notfully answered.

(b) Where the Commission has madea request for additional informationmaterial, the agreement’s effectivedate is 45 days after receipt of the addi-tional material. In the event all mate-rial is not submitted, the agreement’s


285


effective date will be 45 days after re-ceipt of both the documents and infor-mation which are submitted, if any,and the statement indicating the rea-sons for noncompliance. The Commis-sion may, upon notice to the AttorneyGeneral, and pursuant to sections 6(i)and 6(k) of the Act, request the UnitedStates District Court for the Districtof Columbia to further extend theagreement’s effective date until therehas been substantial compliance.

(c) A request for additional informa-tion may be made orally or in writing.In the case of an oral request, a writtenconfirmation of the request shall bemailed to the filing party within sevendays of the communication.

(d) The party upon whom a requestfor additional information is made willhave a reasonable time to respond, asspecified by the Commission. The testof reasonableness shall be based on theparticular circumstances of the requestand shall be determined on a case-by-case basis.

(e) Notice that a request for addi-tional information has been made willbe published by the Commission andserved on commenting parties. Suchnotice will indicate only that a requesthas been made and will not specifywhat information is being sought.Within fifteen (15) days following serv-ice of the notice, further comments onthe agreement may be filed.


§ 572.607 Failure to comply with re-quests for additional information.

(a) A failure to comply with a requestfor additional information results whena person filing an agreement, or an of-ficer, director, partner, agent, or em-ployee thereof fails to substantially re-spond to the request or does not file asatisfactory statement of reasons fornoncompliance. An adequate responseis one which directly addresses theCommission’s request. When a responseis not received by the Commissionwithin a specified time, failure to com-ply will have occurred.

(b) The Commission may, pursuant tosection 6(i) of the Act, request relieffrom the United States District Courtfor the District of Columbia when itconsiders that there has been a failure

to substantially comply with a requestfor additional information. The Com-mission may request that the court:

(1) Order compliance with the re-quest; and

(2) At its discretion, grant other eq-uitable relief which under the cir-cumstances seems necessary or appro-priate.

(c) Where there has been a failure tosubstantially comply, section 6(i)(2) ofthe Act provides that the court shallextend the review period until therehas been substantial compliance.

§ 572.608 Confidentiality of submittedmaterial.

(a) Except for an agreement filedunder section 5 of the Act, all informa-tion submitted to the Commission bythe filing party will be exempt fromdisclosure under 5 U.S.C. 552. Includedin this disclosure exemption is infor-mation provided in the InformationForm, voluntary submission of addi-tional information, reasons for non-compliance, and replies to requests foradditional information.

(b) Information which is confidentialpursuant to paragraph (a) of this sec-tion may be disclosed, however, to theextent:

(1) It is relevant to an administrativeor judicial action or proceeding; or

(2) It is disclosed to either body ofCongress or to a duly authorized com-mittee or subcommittee of Congress.

(c) Parties may voluntarily discloseor make information publicly avail-able. If parties elect to disclose infor-mation they shall promptly inform theCommission.


§ 572.609 Negotiations.

At any time after the filing of anagreement and prior to the conclusionof judicial injunctive proceedings, thefiling party or an authorized represent-ative may submit additional factual orlegal support for an agreement or maypropose modifications of an agreement.Such negotiations between Commis-sion personnel and filing parties maycontinue during the pendency of in-junctive proceedings. Shippers, othergovernment departments or agencies,


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46 CFR Ch. IV (10–1–96 Edition)§ 572.701

and other third parties may not par-ticipate in negotiations.


§ 572.701 General requirements.(a) [Paragraph (a) is stayed until fur-

ther notice.] Certain agreements are re-quired to submit quarterly MonitoringReports on an ongoing basis for as longas they remain in effect, setting forthinformation and data on the agreementmember lines’ cargo carryings, revenueresults and port service patterns underthe agreement.

(b) Certain agreements are requiredto submit minutes of their meetingsfor as long as they remain in effect.

(c) Joint Services. For purposes of therequirements of this Subpart, a jointservice filing its own Monitoring Re-port shall file as one carrier. If a jointservice is a party to another agreementthat is otherwise subject to the re-quirements of this Subpart, the jointservice shall be treated as one memberof that agreement for purposes of thatagreement’s Monitoring Reports.

(d) Address. Monitoring Reports andminutes required by this subpartshould be addressed to the Commissionas follows: Director, Bureau of Eco-nomics and Agreement Analysis, Fed-eral Maritime Commission, Washing-ton, DC 20573–0001. Copies of the appli-cable Monitoring Report form may beobtained from the Bureau of Economicsand Agreement Analysis. The lower,left-hand corner of the envelope inwhich each Monitoring Report or set ofminutes is forwarded should indicatethe nature of its contents and the re-lated agreement number. For example:‘‘Monitoring Report, Agreement 5000’’or ‘‘Minutes, Agreement 5000.’’

(e) Electronic filing. Reports and min-utes required to be filed by this subpartmay be filed by electronic transmissionin lieu of hard copy. Detailed informa-tion on electronic transmission isavailable from the Commission’s Bu-reau of Economics and AgreementAnalysis. Certification and signaturerequirements of this subpart can bemet on electronic transmissionsthrough use of a pre-assigned PersonalIdentification Number (PIN) obtainedfrom the Commission. PINs can be ob-

tained by submission by an official ofthe filing party of a statement to theCommission agreeing that inclusion ofthe PIN in the transmission con-stitutes the signature of the official.Only one PIN will be issued for eachagreement. Where a filing party hasmore than one official authorized tofile minutes or reports, each additionalofficial must submit such a statementcountersigned by the principal officialof the filing party. Each filing officialwill be issued a unique password. A PINor designation of authorized filing offi-cials may be canceled or changed atany time upon the written request ofthe principal official of the filingparty. Direct electronic transmissionfilings may be made at any time exceptbetween the hours of 8:30 a.m. and 2:00p.m. Eastern time on Commission busi-ness days.

(f) Time for filing. Monitoring Reportsshall be filed within 75 days of the endof each calendar quarter. Other docu-ments shall be filed within 30 days ofthe end of a quarter-year, a meeting, orthe receipt of a request for documents.

(g) A complete response in accord-ance with the instructions on the ap-plicable Monitoring Report shall besupplied to each item. Whenever theparty answering a particular part isunable to supply a complete response,that party shall provide either esti-mated data (with an explanation ofwhy precise data are not available) or adetailed statement of reasons for non-compliance and the efforts made to ob-tain the required information.

(h) A Monitoring Report for a par-ticular agreement may be supple-mented with any other information ordocumentary material.

(i) Confidentiality. (1) The MonitoringReports, minutes, and any other addi-tional information submitted for a par-ticular agreement will be exempt fromdisclosure under 5 U.S.C. 552, except tothe extent:

(i) It is relevant to an administrativeor judicial action or proceeding; or

(ii) It is disclosed to either body ofCongress or to a duly authorized com-mittee or subcommittee of Congress.

(2) Parties may voluntarily discloseor make Monitoring Reports, minutesor any other additional informationpublicly available. The Commission


287


must be promptly informed of any suchvoluntary disclosure.

[49 FR 45431, Nov. 15, 1984, as amended at 59FR 67231, Dec. 29, 1994; 61 FR 11576, Mar. 21,1996; 61 FR 40530, Aug. 5, 1996]

EFFECTIVE DATE NOTE: At 61 FR 11576, Mar.21, 1996, §572.701(a) was added, and the effec-tive date was stayed until further notice.

§ 572.702 Agreements subject to Mon-itoring Report requirements.

(a) Agreements subject to the Mon-itoring Report requirements of thissubpart are divided into three classes,Class A, Class B and Class C. Whenused in this subpart:

(i) Class A agreement means an agree-ment that is subject to the definitionset forth in § 572.502(a) and has marketshares of 50 percent or more in half ormore of its sub-trades.

(2) Class B agreement means an agree-ment that is subject to the definitionset forth in § 572.502(a) but does nothave market shares of 50 percent ormore in half or more of its sub-trades.

(b) Classification of an agreement as‘‘Class A’’ or ‘‘Class B’’ for purposes ofits reporting obligations under thissubpart shall be done by the Bureau ofEconomics and Agreement Analysis,based in the first instance on the mar-ket share data reported on the agree-ment’s Information Form pursuant to§ 572.503, or on similar data otherwiseobtained. Thereafter, before the begin-ning of each calendar year, the Bureauof Economics and Agreement Analysisshall determine whether the agreementshould be classified as ‘‘Class A’’ or‘‘Class B’’ for that year, based on themarket share data reported on theagreement’s quarterly Monitoring Re-port for the previous second quarter(April–June).

(c) Class C agreement means an agree-ment that is subject to the definitionset forth in § 572.502(b).

[61 FR 11576, Mar. 21, 1996, as amended at 61FR 40531, Aug. 5, 1996]

EFFECTIVE DATE NOTE: 1. At 61 FR 11564,11576, Mar. 21, 1996, §572.702 was added, andthe effective date was stayed until furthernotice.

2. At 61 FR 40531, Aug. 5, 1996, §572.702(b)was revised. For the convenience of the read-er, the superseded text is set forth as follows:

§ 572.702 Agreements subject to MonitoringReport requirements.

* * * * *

(b) * * * Thereafter, at the beginning ofeach calendar year, the Bureau of Economicsand Agreement Analysis shall determinewhether the agreement should be classifiedas ‘‘Class A’’ or ‘‘Class B’’ for that year,based on the market share data reported onthe agreement’s quarterly Monitoring Re-port for the third quarter (July–September)of the previous calendar year.

* * * * *

§ 572.703 Monitoring report for Class Aagreements.

The Monitoring Report form forClass A agreements, with accompany-ing instructions that are intended tofacilitate the completion of the Report,is set forth in appendix C of this part.The instructions should be read in con-junction with the Shipping Act of 1984and with 46 CFR part 572.

[61 FR 11577, Mar. 21, 1996]

§ 572.704 Monitoring report for Class Bagreements.

The Monitoring Report form forClass B agreements, with accompany-ing instructions that are intended tofacilitate the completion of the Report,is set forth in appendix D of this part.The instructions should be read in con-junction with the Shipping Act of 1984and with 46 CFR part 572.

[61 FR 11577, Mar. 21, 1996]

§ 572.705 Monitoring report for Class Cagreements.

The Monitoring Report form forClass C agreements, with accompany-ing instructions that are intended tofacilitate the completion of the Report,is set forth in appendix E of this part.The explanation and instructionsshould be read in conjunction with theShipping Act of 1984 and 46 CFR part572.

[61 FR 11577, Mar. 21, 1996]

§ 572.706 Filing of minutes—includingshippers’ requests and complaints,and consultations.

(a) Meetings. For purposes of this sub-part, the term meeting shall include


288

46 CFR Ch. IV (10–1–96 Edition)§ 572.707

any meeting of the parties to theagreement, including meetings of theiragents, principals, owners, committees,or subcommittees of the parties au-thorized to take final action on behalfof the parties. Where the agreement soauthorizes, this includes final actionby telephonic or personal polls of themembership.

(b) Content of minutes. Except as pro-vided in paragraph (c) of this section,conferences, interconference agree-ments, agreements between a con-ference and one or more ocean commoncarriers, pooling agreements, equal ac-cess agreements, discussion agree-ments, maritime terminal conferences,and marine terminal rate fixing agree-ments shall, through a designated offi-cial, file with the Commission a reportof each meeting defined in paragraph(a) of this section describing all mat-ters within the scope of the agreementwhich are discussed or considered atany such meeting, including shippers’requests and complaints, as well asconsultations with shippers and ship-pers’ associations, and shall indicatethe action taken. These reports neednot disclose the identity of parties thatparticipated in discussions or the votestaken.

(c) Exemption. No minutes need befiled under paragraph (b) of this sectionwith respect to any discussion of or ac-tion taken with regard to:

(1) Rates that, if adopted, would berequired to be published in the Com-modity Rate Section, Class Rate Sec-tion, or Open Rate Section of the perti-nent tariff on file with the Commissionexcept that this exemption does notapply to discussions limited to generalrate policy, general rate changes, theopening or closing of rates, or serviceor time/volume contracts; or

(2) Purely administrative matters.(d) Serial numbers. (1) Each set of min-

utes filed with the Commission shouldbe assigned a number. For example, aconference filing minutes of its firstmeeting upon the effective date of thisrule should assign Meeting No. 1 to itsminutes, the next meeting will be as-signed Meeting No. 2, and so on.

(2) Any conference or rate agreementwhich, for its own internal purposes,has a system for assigning sequentialnumbers to its minutes in a manner

which differs from that set forth inparagraph (d)(1) of this section maycontinue to utilize its own systemthereof.

[49 FR 45351, Nov. 15, 1984; 49 FR 48928, Dec.17, 1984. Redesignated and amended at 57 FR40619, Sept. 4, 1992. Redesignated and amend-ed at 61 FR 11576, Mar. 21, 1996]

§ 572.707 Other documents.Each agreement required to file min-

utes pursuant to § 572.706 shall list insaid minutes all reports, circulars, no-tices, statistics, analytical studies orother documents, not otherwise filedwith the Commission pursuant to thissubpart, which are distributed to themember lines and are used to reach afinal decision on any of the followingmatters:

(a) Revenue projections and plans.(This would exclude individual rate ad-justments but would include generalrate adjustments, surcharges and otheritems affecting shipper costs.)

(b) Studies regarding proposedchanges to the conference agreementor its membership.

(c) Non-conference competition.(d) Changes in the nature and type of

transportation service generally andspecifically at individual ports orpoints.

(e) Trade tonnaging requirements,vessel utilization and vessel replace-ment plans.

(f) Conference participation in trade(market share).

(g) The exercise of the right of inde-pendent action.

(h) Development of transportationtechnology and intermodal services.

(i) Malpractices.(j) Use of service contracts, time vol-

ume rate schemes and loyalty con-tracts.

(k) Conference relationship withshippers and shipper groups.

(l) Governmental and other foreignrequirements affecting the conference.

[57 FR 40619, Sept. 4, 1992. Redesignated andamended at 61 FR 11576, Mar. 21, 1996]

§ 572.708 Retention of records.Each agreement required to file min-

utes pursuant to this subpart shall re-tain a copy of each document listed insaid minutes for a minimum period of 3years after the date the document is


289


distributed to the members. Such docu-ments may be requested by the Direc-tor, Bureau of Economics and Agree-ment Analysis, in writing by referenceto a specific minute, and shall indicatethat the documents will be received inconfidence. Requested documents shallbe furnished by the parties within thetime specified.

[61 FR 11577, Mar. 21, 1996]

§ 572.709 Application for waiver.(a) Upon a showing of good cause, the

Commission may waive any require-ment of this subpart.

(b) A request for such a waiver mustbe approved in advance of the filing ofthe Monitoring Report or minutes towhich the requested waiver wouldapply. The Commission will take intoaccount the presence or absence ofshipper complaints in considering anapplication for a waiver. Requests for awaiver shall state:

(1) The specific requirements fromwhich relief is sought;

(2) the special circumstances requir-ing the requested relief; and

(3) why granting the requested waiv-er will not substantially impair effec-tive regulation of the agreement.

[61 FR 11576, Mar. 21, 1996]

Subpart H—ConferenceAgreements

§ 572.801 Independent action.(a) Each conference agreement shall

specify the independent action (‘‘IA’’)procedures of the conference, whichshall provide that any conferencemember may take independent actionon any rate or service item required tobe filed in a tariff under section 8(a) ofthe Act upon not more than 10 calendardays’ notice to the conference and shallotherwise be in conformance with sec-tion 5(b)(8) of the Act.

(b)(1) Each conference agreementthat provides for a period of notice forindependent action shall establish afixed or maximum period of notice tothe conference. A conference agree-ment shall not require or permit a con-ference member to give more than 10calendar days’ notice to the con-ference, except that in the case of anew or increased rate the notice period

shall conform to the requirements of§ 514.9(b) of this chapter.

(2) A conference agreement shall notprescribe notice periods for adopting,withdrawing, postponing, canceling, ortaking other similar actions on inde-pendent actions.

(c) Each conference agreement shallindicate the conference official, singledesignated representative, or con-ference office to which notice of inde-pendent action is to be provided. A con-ference agreement shall not require no-tice of independent action to be givenby the proposing member to the otherparties to the agreement.

(d) A conference agreement shall notrequire a member who proposes inde-pendent action to attend a conferencemeeting, to submit any further infor-mation other than that necessary toaccomplish the filing of the independ-ent tariff item, or to comply with anyother procedure for the purpose of ex-plaining, justifying, or compromisingthe proposed independent action.

(e) A conference agreement shallspecify that any new rate or serviceitem proposed by a member under inde-pendent action shall be included by theconference in its tariff for use by thatmember effective no later than 10 cal-endar days after receipt of the noticeand by any other member that notifiesthe conference that it elects to adoptthe independent rate or service item onor after its effective date.

(f)(1) As it pertains to this part,‘‘adopt’’ means the assumption in iden-tical form of an originating member’sindependent action rate or serviceitem, or a particular portion of suchrate or service item. If a carrier adoptsan IA at a lower rate than the con-ference rate when there is less than 30days remaining on the original IA, theadopted IA should be made to expire 30days after its effectiveness to complywith the statutory 30-day notice re-quirement. In the case of an independ-ent action time/volume rate (‘‘IATVR’’), the dates of the adopting IAmay vary from the dates of the originalIA, so long as the duration of theadopting IA is the same as that of theoriginating IA. Furthermore, no termother than ‘‘adopt’’ (e.g., ‘‘follow,’’‘‘match’’) can be used to describe the


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46 CFR Ch. IV (10–1–96 Edition)§ 572.802

action of assuming as one’s own an ini-tiating carrier’s IA. Additionally, if aparty to an agreement chooses to takeon an IA of another party, but alters it,such action is considered a new IA andmust be filed pursuant to the IA filingand notice provisions of the applicableagreement.

(2) An independent action time/vol-ume rate filed by a member of a rate-making agreement may be adopted byanother member of the agreement, pro-vided that the adopting member takeson the original IA TVR in its entiretywithout change to any aspect of theoriginal rate offering (except beginningand ending dates in the time period)(i.e., a separate TVR with a separatevolume of cargo but for the same dura-tion). Any subsequent IA TVR offeringwhich results in a change in any aspectof the original IA TVR, other than thename of the offering carrier or the be-ginning date of the adopting IA TVR, isa new independent action and shall beprocessed in accordance with the provi-sions of the applicable agreement. Theadoption procedures discussed above donot authorize the participation by anadopting carrier in the cargo volume ofthe originating carrier’s IA TVR. Mem-ber lines may file and participate injoint IA TVRs, if permitted to do sounder the terms of their agreement;however, no carrier may participate inan IA TVR already filed by anothercarrier.

(g) A conference agreement shall notrequire or permit individual memberlines to be assessed on a per carrierusage basis the costs and/or adminis-trative expenses incurred by the agree-ment in processing independent actionfilings.

(h) A conference agreement may notpermit the conference to unilaterallydesignate an expiration date for anindependent action taken by a memberline. The right to determine the dura-tion of an IA remains with the memberline, and a member line must be giventhe opportunity to designate whateverduration it chooses for its IA, regard-less if the duration is for a special pe-riod or open ended. Only in instanceswhere a member line gives its consentto the conference, or where a memberline freely elects not to provide for theduration of its IA after having been

given the opportunity, can the con-ference designate an expiration datefor the member line’s IA.

(i) All new conference agreementsfiled on or after the effective date ofthis section shall comply with the re-quirements of this section. All otherconference agreements shall be modi-fied to comply with the requirementsof this section no later than 90 daysfrom the effective date of this section.However, any effective IA TVR adoptedand participated in by other memberlines at the time this section is pub-lished shall be permitted to remain ineffect until its specified terminationdate.

(j) Any new conference agreement orany modification to an existing con-ference agreement which does not com-ply with the requirements of this sec-tion shall be rejected pursuant to§ 572.601.

(k) If ratemaking is by sections with-in a conference, then any notice to theconference required by § 572.801 may bemade to the particular ratemaking sec-tion.


§ 572.802 Service contracts.

(a) Each conference agreement thatregulates or prohibits the use of servicecontracts shall specify its rules govern-ing the use of service contracts by theconference or by individual members.

(b) Any change in conference provi-sions regulating or prohibiting the useof service contracts, whether accom-plished by a vote of the membership orotherwise, shall not be implementedprior to the filing and effectiveness ofan agreement modification reflectingthat change.

(c) For the purpose of this section,conference provisions regulating orprohibiting the use of service contractsinclude, but are not limited to, thosewhich permit or prohibit conferenceservice contracts; permit or prohibitindividual service contracts; permit orprohibit independent action on servicecontracts; permit or prohibit individ-ual members to elect not to participatein conference service contracts; or im-pose restrictions or conditions under


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Federal Maritime Commission Pt. 572, App. A

which individual service contracts maybe offered.

[57 FR 54531, Nov. 19, 1992]


§ 572.901 Failure to file.Any person operating under an agree-

ment involving activities subject tothe Act pursuant to sections 4 and 5(a)of the Act and this part and not ex-empted pursuant to section 16 of theAct or excluded from filing by the Act,which has not been filed and has notbecome effective pursuant to the Actand this part is in violation of the Actand of this part and is subject to thecivil penalties set forth in section 13(a)of the Act.

§ 572.902 Falsification of reports.Knowing falsification of any report

required by the Act or this part, in-cluding knowing falsification of anyitem in any applicable InformationForm or Monitoring Report, is a viola-tion of the rules of this part and is sub-ject to the civil penalties set forth insection 13(a) of the Act and may besubject to the criminal penalties pro-vided for in 18 U.S.C. 1001.

[61 FR 11577, Mar. 21, 1996]



This section displays the controlnumber assigned to information collec-tion requirements of the Commissionin this part by the Office of Manage-ment and Budget pursuant to the Pa-perwork Reduction Act of 1995, PublicLaw 104–13. The Commission intendsthat this section comply with the re-quirements of section 3507(a)(3) of thePaperwork Reduction Act, which re-quires that agencies display a currentcontrol number assigned by the Direc-tor of the Office of Management andBudget (OMB) for each agency informa-tion collection requirement:


572.101 through 572.902 .............................. 3072–0045


APPENDIX A TO PART 572—INFORMATION

FORM FOR CLASS A/B AGREEMENTS

AND INSTRUCTIONS

Instructions

All agreements between ocean commoncarriers that are Cass A/B agreements as de-fined in 46 CFR 572.502(a) must be accom-panied by a completed Information Form forsuch agreements. A complete response mustbe supplied to each part of the Form. Wherethe party answering a particular part is un-able to supply a complete response, thatparty shall provide either estimated data(with an explanation of why precise data arenot available) or a detailed statement of rea-sons for noncompliance and the efforts madeto obtain the required information. For pur-poses of the requirements of this Form, ifone of the agreement signatories is a jointservice operating under an effective agree-ment, that signatory shall respond to theForm as a single agreement party. Allsources must be identified.

Part I

Part I requires a statement of the fullname of the agreement as also providedunder 46 CFR 572.403.

Part II

Part II requires a list of all effective agree-ments covering all or part of the geographicscope of the filed agreement, whose partiesinclude one or more of the parties to thefiled agreement.

Part III(A)

Part III(A) requires a statement as towhether the agreement authorizes the par-ties to collectively fix rates under a commontariff, to agree upon rates on a non-bindingbasis, or to discuss rates. Such rate activi-ties may be authorized by a conferenceagreement, an interconference agreement,an agreement among one or more con-ferences and one or more non-conferenceocean common carriers, an agreement be-tween two or more conference member lines,an agreement between one or more con-ference member lines and one or more non-conference ocean common carriers, or anagreement among two or more non-con-ference ocean common carriers.

Part III(B)

Part III(B) requires a statement as towhether the agreement authorizes the par-ties to establish a joint service.


292


Part III(C)

Part III(C) requires a statement as towhether the agreement authorizes the par-ties to pool cargo or revenues.

Part III(D)

Part III(D) requires a statement as towhether the agreement authorizes the par-ties to discuss or exchange data on vessel-op-erating costs as defined in 46 CFR572.104(kk).

Part III(E)

Part III(E) requires a statement as towhether the agreement authorizes the par-ties to regulate or discuss service contracts.

Part IV

Part IV requires the market shares of allliner operators within the entire geographicscope of the agreement and in each sub-tradewithin the scope of the agreement, duringthe most recent calendar quarter for whichcomplete data are available. A joint serviceshall be treated as a single liner operator,whether it is an agreement line or a non-agreement line. Sub-trade is defined as thescope of all liner movements between eachU.S. port range within the scope of theagreement and each foreign country withinthe scope of the agreement. Where the agree-ment covers both U.S. inbound and outboundliner movements, inbound and outboundmarket shares should be shown separately.

U.S. port ranges are defined as follows:Atlantic—Includes ports along the eastern

seaboard from the northern boundary ofMaine to, but not including, Key West, Flor-ida. Also includes all ports bordering uponthe Great Lakes and their connecting water-ways as well as all ports in the State of NewYork on the St. Lawrence River.

Gulf—Includes all ports along the Gulf ofMexico from Key West, Florida, to Browns-ville, Texas, inclusive. Also includes allports in Puerto Rico and the U.S. Virgin Is-lands.

Pacific—Includes all ports in the States ofAlaska, Hawaii, California, Oregon andWashington. Also includes all ports in Guam,American Samoa, Northern Marianas, John-ston Island, Midway Island and Wake Island.

An application may be filed for a waiver ofthe definition of ‘‘sub-trade,’’ under the pro-cedure described in 46 CFR 572.505. In anysuch application, the burden shall be on thefiling carriers to show that their marketingand pricing practices have been done by as-certainable multi-country regions ratherthan by individual countries or, in the caseof the United States, by broader areas thanthe port ranges defined herein. The carriersmust further show that, though operating in-dividually, they were nevertheless applyingessentially similar regional practices.

The formula for calculating market share inthe entire agreement scope or in a sub-tradeis as follows:

The total amount of liner cargo carried oneach liner operator’s liner vessels in the en-tire agreement scope or in the sub-trade dur-ing the most recent calendar quarter forwhich complete data are available, dividedby the total liner movements in the entireagreement scope or in the sub-trade duringthe same calendar quarter, which quotient ismultiplied by 100. The calendar quarter usedmust be clearly identified. The marketshares held by non-agreement lines as wellas by agreement lines must be provided,stated separately in the format indicated.

If 50 percent or more of the total linercargo carried by the agreement lines in theentire agreement scope or in the sub-tradeduring the calendar quarter was container-ized, only containerized liner movements(measured in TEUs) must be used for deter-mining market share. If 50 percent or moreof the total liner cargo carried by the agree-ment lines was non-containerized, only non-containerized liner movements must be usedfor determining market share. The unit ofmeasure used in calculating amounts of non-containerized cargo must be specified clearlyand applied consistently.

Liner movements is the carriage of linercargo by liner operators. Liner cargoes arecargoes carried on liner vessels in a linerservice. A liner operator is a vessel-operatingcommon carrier engaged in liner service.Liner vessels are those vessels used in a linerservice. Liner service refers to a definite, ad-vertised schedule of sailings at regular inter-vals. All these definitions, terms and descrip-tions apply only for purposes of the Informa-tion Form.

Part V

Part V requires, for each agreement mem-ber line that served all or any part of the ge-ographic area covered by the agreement dur-ing all or any part of the most recent 12-month period for which complete data areavailable, a statement of each line’s totalliner cargo carryings within the geographicarea, total liner revenues within the geo-graphic area, and average revenue.

If 50 percent or more of the total linercargo carried by all the agreement memberlines in the geographic area covered by theagreement during the 12-month period wascontainerized, each agreement member lineshould report only its total carryings of con-tainerized liner cargo (measured in TEUs)within the geographic area, total revenuesgenerated by its carriage of containerizedliner cargo, and average revenue per TEU.Conversely, if 50 percent or more of the totalliner cargo carried by all the agreementmember lines in the geographic area coveredby the agreement during the 12-month period


293

Federal Maritime Commission Pt. 572, App. A

was non-containerized, each line should re-port only its total carryings of non-contain-erized liner cargo (specifying the unit ofmeasurement used), total revenues gen-erated by its carriage of non-containerizedliner cargo, and average revenue per unit ofmeasurement.

The Information Form specifies the formatin which the information is to be reported.Where the agreement covers both U.S. in-bound and outbound liner movements, in-bound and outbound data should be statedseparately.

Part VI

Part VI requires a list, for each sub-tradewithin the scope of the agreement, of the top10 liner commodities (including commoditiesnot subject to tariff filing) carried by all theagreement member lines during the same 12-month period used in responding to Part V,or a list of the commodities accounting for50 percent of the total liner cargo carried byall the agreement member lines during the12-month period, whichever list is longer. If50 percent or more of the total liner cargocarried by all the agreement member lines inthe sub-trade during the 12-month period wascontainerized, this list should include onlycontainerized commodities. If 50 percent ormore of the total liner cargo carried by allthe agreement member lines in the sub-tradeduring the 12-month period was non-contain-erized, this list should include only non-con-tainerized commodities. Commodities shouldbe identified at the 4-digit level of customar-ily used commodity coding schedules. Wherethe agreement covers both U.S. inbound andoutbound liner movements, inbound and out-bound sub-trades should be stated sepa-rately.

Part VII

Part VII requires a statement of the cargovolume and revenue results experienced byeach of the parties to the proposed agree-ment from each major commodity in eachsubtrade. The Information Form specifiesthe format in which the information is to bereported.

Part VIII

Part VIII is concerned with the levels ofservice at each port within the entire geo-graphic scope of the agreement. Each of theagreement lines is required to provide thenumber of calls it made at each port over the12-month period used in responding to PartsV, VI and VII, and also to indicate any im-mediate change it plans to make in the na-ture or type of service at a particular portafter the agreement goes into effect.

Part IX(A)

Part IX(A) requires the name, title, ad-dress, telephone number and cable address,

telex or fax number of a person the Commis-sion may contact regarding the InformationForm and any information provided therein.

Part IX(B)

Part IX(B) requires the name, title, ad-dress, telephone number and cable address,telex or fax number of a person the Commis-sion may contact regarding a request for ad-ditional information or documents.

Part IX(C)

Part IX(C) requires that a representativeof the agreement lines sign the InformationForm and certify that the information in theForm and all attachments and appendicesare, to the best of his or her knowledge, true,correct and complete. The representative isalso required to indicate his or her relation-ship with the parties to the agreement.


Information Form For Certain AgreementsBy Or Among Ocean Common Carriers

Agreement Number —————————————(Assigned by FMC)

Part I Agreement Name:

Part II Other Agreements

Lists all effective agreements covering allor part of the geographic scope of this agree-ment, whose parties include one or more ofthe parties to this agreement.

Part III Agreement Type

(A) Rate AgreementsDoes the agreement authorize the parties

to collectively fix rates on a binding basisunder a common tariff, or to agree uponrates on a non-binding basis, or to discussrates?

Yes b No b

(B) Joint Service AgreementsDoes the agreement authorize the parties

to establish a joint service?

Yes b No b

(C) Pooling AgreementsDoes the agreement authorize the parties

to pool cargoes or revenues?

Yes b No b

(D) Vessel-Operating CostsDoes the agreement authorize the parties

to discuss or exchange data on vessel-operat-ing costs?

Yes b No b

(E) Service ContractsDoes the agreement authorize the parties

to discuss or agree on service contract termsand conditions, on either a binding or non-binding basis?

Yes b No b


294


Part IV Market Share Information

Provide the market shares of all liner oper-ators within the entire scope of the agree-ment and within each agreement sub-tradeduring the most recent calendar quarter forwhich complete data are available. The in-formation should be provided in the formatbelow:

MARKET SHARE REPORT FOR (INDICATE EITHERENTIRE AGREEMENT SCOPE, OR SUB-TRADENAME) TIME PERIOD

TEUs orother unitof meas-urement

Percent

Agreement Market Share:Line A ............................................. X,XXX XXLine B ............................................. X,XXX XXLine C ............................................. X,XXX XX

Total Agreement Market Share .. X,XXX XX

Non-Agreement Market Share:Line X ............................................. X,XXX XXLine Y ............................................. X,XXX XXLine Z ............................................. X,XXX XX

Total Non-Agreement MarketShare ...................................... X,XXX XX

Total Market ............................ X,XXX 100

Part V Cargo and Revenue Results Agreement-Wide

For each party that served all or any partof the geographic area covered by the entireagreement during all or any part of the mostrecent 12-month period for which completedata are available, state total cargo carryingin TEUs or other unit of measurement with-in the entire geographic area, total revenueswithin the geographic area, and average rev-enue per TEU or other unit of measurement.The same 12-month period must be used foreach party. The information should be pro-vided in the format below:

TIME PERIOD

Carrier

TotalTEUs or

otherunit ofmeas-

urement

Totalreve-nues

Avg.revenueper TEUor otherunit ofmeas-

urement

A .......................................... .............. $ $B .......................................... .............. $ $C .......................................... .............. $ $Etc ........................................ .............. $ $

Part VI Leading Commodities

For each sub-trade within the scope of theagreement, list the top 10 commodities car-ried by all the parties during the same timeperiod used in responding to Part V, or listthe commodities accounting for 50 percent ofthe total carried by all the parties duringthe same 12-month period, whichever list islonger. The same 12-month period must beused in reporting for each sub-trade. The in-formation should be provided in the formatbelow:

Time Period (Same as That Used in Re-sponding to Part V)

I. Sub-Trade

A. First leading commodityB. Second leading commodityC. Third leading commodity etc.

II. Sub-Trade

A. First leading commodity etc.

Part VII Cargo and Revenue Results by Sub-Trade

For the same time period used in respond-ing to Parts V and VI, and for each sub-tradewithin the scope of the agreement, and foreach of the leading commodities listed foreach sub-trade in the response to Part VI,and for each party, state the total TEUs (orother unit of measurement) carried and aver-age gross revenue per TEU (or other unit ofmeasurement).

The information should be provided in theformat below:

Time Period (Same as That Used inResponding to Part V)

I. Sub-trade AA. First leading commodity1. Carrier A(a) Total TEUs (or other unit of measure-

ment) carried(b) Average gross revenue per TEU (or

other unit of measurement)2. Carrier B(a) etc.B. Second leading commodity1. Carrier A(a) etc.

II. Sub-trade BA. First leading commodity1. etc.

Part VIII Port Service

For each port within the entire geographicscope of the agreement, state the number ofport calls by each of the parties over thesame time period used in responding to PartsV, VI and VII. The information should beprovided in the format below:


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Federal Maritime Commission Pt. 572, App. B

TIME PERIOD[Same as that used in responding to Part V]

Port Port Port Port Port

Carrier A.Carrier B.Carrier C.Etc..

Also, for each party, indicate any plannedchange in the nature or type of service (suchas base port designation, frequency of vesselcalls, use of indirect rather than direct serv-ice, etc.) to be effected at any port withinthe entire geographic scope of the agreementafter the effective date of the agreement.

Part IX

(A) Identification of Person(s) to ContactRegarding the Information Form

(1) Name ———————————————————(2) Title ———————————————————(3) Firm Name and Business————————————————————————(4) Business Telephone Number————————————————————————(5) Cable Address, Telex or Fax Number————————————————————————

(B) Identification of an Individual Locatedin the United States Designated for the Lim-ited Purpose of Receiving Notice of an Issu-ance of a Request for Additional Informationor Documents (see 46 CFR 572.606).

(1) Name ———————————————————(2) Title ———————————————————(3) Firm Name and Business————————————————————————(4) Business Telephone Number————————————————————————(5) Cable Address, Telex or Fax Number————————————————————————

(C) CertificationThis Information Form, together with any

and all appendices and attachments thereto,was prepared and assembled in accordancewith instructions issued by the Federal Mar-itime Commission. The information is, tothe best of my knowledge, true, correct, andcomplete.

Name (please print or type)————————————————————————Title —————————————————————Relationship with parties to agreement————————————————————————————————————————————————Signature ——————————————————Date —————————————————————

[61 FR 11577, Mar. 21, 1996]

APPENDIX B TO PART 572—INFORMATIONFORM FOR CLASS C AGREEMENTSAND INSTRUCTIONS.

Instructions

All agreements between or among oceancommon carriers that are Class C agree-ments as defined in 46 CFR 572.502(b) must beaccompanied by a completed InformationForm for such agreements. A complete re-sponse must be supplied to the Form. Wherethe filing party is unable to supply a com-plete response, that party shall provide ei-ther estimated data (with an explanation ofwhy precise data are not available) or a de-tailed statement of reasons for noncompli-ance and the efforts made to obtain the re-quired information. For purposes of the re-quirements of this Form, if one of the agree-ment signatories is a joint service operatingunder an effective agreement, that signatoryshall respond to the Form as a single agree-ment party. All sources must be identified.

Part I

Part I requires a statement of the fullname of the agreement as also providedunder 46 CFR 572.403.

Part II

Part II requires a list of all effective agree-ments covering all or part of the geographicscope of the filed agreement, whose partiesinclude one or more of the parties to thefiled agreement.

Part III

Part III is concerned with the level of serv-ice at each port within the entire geographicscope of the agreement. Each agreement lineis required to state the number of calls itmade at each port over the most recent 12-month period for which complete data areavailable, and also to indicate any imme-diate change it plans to make in the natureor type of service at a particular port afterthe agreement goes into effect.

Part IV(A)

Part IV(A) requires the name, title, ad-dress, telephone number and cable address,telex or fax number of a person the Commis-sion may contact regarding the InformationForm and any information provided therein.


296

46 CFR Ch. IV (10–1–96 Edition)Pt. 572, App. C

Part IV(B)

Part IV(B) requires the name, title, ad-dress, telephone number and cable address,telex or fax number of a person the Commis-sion may contact regarding a request for ad-ditional information or documents.

Part IV(C)

Part IV(C) requires that a representativeof the agreement lines sign the InformationForm and certify that the information in theForm and all attachments and appendicesare, to the best of his or her knowledge, true,correct and complete. The representative isalso required to indicate his or her relation-ship with the parties to the agreement.


Information Form For Certain AgreementsBy or Among Ocean Common Carriers

Agreement Number —————————————

(Assigned by FMC)Part I Agreement Name:————————————————————————


List all effective agreements covering allor part of the geographic scope of this agree-ment, whose parties include one or more ofthe parties to this agreement.

Part III Port Service

For each port within the entire geographicscope of the agreement, state the number ofport calls by each of the parties over themost recent 12-month period for which com-plete data are available. The informationshould be provided in the format below.

TIME PERIOD

Port Port Port Port Port

Carrier ACarrier BCarrier CEtc.

Also, for each party, indicate any plannedchange in the nature or type of service (suchas base port designation, frequency of vesselcalls, use of indirect rather than direct serv-ice, etc.) to be effected at any port withinthe entire geographic scope of the agreementafter the effective date of the agreement.

Part IV

(A) Identification of Person(s) to ContactRegarding the Information Form(1) Name ———————————————————(2) Title ———————————————————(3) Firm Name and Business————————————————————————(4) Business Telephone Number————————————————————————(5) Cable Address, Telex or Fax Number————————————————————————

(B) Identification of an Individual Locatedin the United States Designated for the Lim-ited Purpose of Receiving Notice of an Issu-ance of a Request for Additional Informationor Documents (see 46 CFR 572.606).(1) Name ———————————————————(2) Title ———————————————————(3) Firm Name and Business————————————————————————(4) Business Telephone Number————————————————————————(5) Cable Address, Telex or Fax Number————————————————————————

(C) Certification

This Information Form, together with anyand all appendices and attachments thereto,was prepared and assembled in accordancewith instructions issued by the Federal Mar-itime Commission. The information is, tothe best of my knowledge, true, correct, andcomplete.

Name (please print or type)————————————————————————Title —————————————————————Relationship with parties to agreement————————————————————————Signature ——————————————————Date —————————————————————

[61 FR 11579, Mar. 21, 1996]

APPENDIX C TO PART 572—MONITORINGREPORT FOR CLASS A AGREEMENTSAND INSTRUCTIONS

Instructions

A complete response must be supplied toeach part of the Report. Where the party an-swering a particular part is unable to supplya complete response, that party shall provideeither estimated data (with an explanationof why precise data are not available) or adetailed statement of reasons for noncompli-ance and the efforts made to obtain the re-quired information. All sources must beidentified.


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Federal Maritime Commission Pt. 572, App. C

Part I

Part I requires a statement of the fullname of the agreement, and the assignedFMC number.

Part II

Part II requires a statement of any changeoccurring during the calendar quarter to thelist of other agreements set forth in Part IIof the Information Form.

Part III

Part III requires the filing party to indi-cate whether the agreement authorizes theparties to operate as a conference.

Part IV

Part IV requires the market shares of allliner operators within the entire geographicscope of the agreement and in each sub-tradewithin the scope of the agreement during thecalendar quarter. A joint service shall betreated as a single liner operator, whether itis an agreement line or a non-agreementline.

Sub-trade is defined as the scope of all linermovements between each U.S. port rangewithin the scope of the agreement and eachforeign country within the scope of theagreement. Where the agreement covers bothU.S. inbound and outbound line movements,inbound and outbound market shares shouldbe shown separately.



Gulf—Includes all ports along the Gulf ofMexico from Key West, Florida, to Browns-ville, Texas, inclusive. Also includes allports in Puerto Rico and the U.S. Virgin Is-lands.

Pacific—Includes all ports in the States ofAlaska, Hawaii, California, Oregon andWashington. Also includes all ports in Guam,American Samoa, Northern Marinas, John-ston Island, Midway Island and Wake Island.

An application may be filed for a waiver ofthe definition of ‘‘sub-trade,’’ under the pro-visions described in 46 CFR 572.709. In anysuch application, the burden shall be on theagreement carriers to show that their mar-keting and pricing practices are done by as-certainable multi-country regions ratherthan by individual countries or, in the caseof the United States, by broader areas thanthe port ranges defined herein. The Commis-sion will also consider whether the alternatedefinition of ‘‘sub-trade’’ requested by thewaiver application is reasonably consistentwith the definition of ‘‘sub-trade’’ applied in

the original Information Form filing for theagreement.


The total amount of liner cargo carried oneach liner operator’s liner vessels in the en-tire agreement scope or in the sub-trade dur-ing the calendar quarter, divided by the totalliner movements in the entire agreementscope or in the sub-trade during the calendarquarter, which quotient is multiplied by 100.The market shares held by non-agreementlines as well as by agreement lines must beprovided, stated separately in the format in-dicated.

If 50 percent or more of the total linercargo carried by the agreement lines in theentire agreement scope or in the sub-tradeduring the calendar quarter was container-ized, only containerized liner movements(measured in TEUs) must be used for deter-mining market share. If 50 percent or moreof the total liner cargo carried by the agree-ment lines was non-containerized, only non-containerized liner movements must be usedfor determining market share. The unit ofmeasure used in calculating amounts of non-containerized cargo must be specified clearlyand applied consistently.

Liner movements is the carriage of linercargo by liner operators. Liner cargoes arecargoes carried on liner vessels in a linerservice. A liner operator is a vessel-operatingcommon carrier engaged in liner service.Liner vessels are those vessels used in a linerservice. Liner service refers to a definite, ad-vertised schedule of sailings at regular inter-vals. All these definitions, terms and descrip-tions apply only for purposes of the Monitor-ing Report.

Part V

Part V requires each agreement memberline’s total liner cargo carryings within theentire geographic area covered by the agree-ment during the calendar quarter, each line’stotal liner revenues within the geographicarea during the calendar quarter, and aver-age revenue.

If 50 percent or more of the total linercargo carried by all the agreement memberlines in the geographic area covered by theagreement during the calendar quarter wascontainerized, each agreement member lineshould report only its total carryings of con-tainerized liner cargo (measured in TEUs)during the calendar quarter within the geo-graphic area, total revenues generated by itscarriage of containerized liner cargo, and av-erage revenue per TEU. Conversely, if 50 per-cent or more of the total liner cargo carried


298


by all the agreement member lines in the ge-ographic area covered by the agreement dur-ing the calendar quarter was non-container-ized, each agreement member line should re-port only its total carryings of non-contain-erized liner cargo during the calendar quar-ter (specifying the unit of measurementused), total revenues generated by its car-riage of noncontainerized liner cargo, andaverage revenue per unit of measurement.

The Monitoring Report specifies the for-mat in which the information is to be re-ported. Where the agreement covers bothU.S. inbound and outbound liner movements,inbound and outbound data should be statedseparately.

Part VI

Part VI requires a list, for each sub-tradewithin the scope of the agreement, of the top10 liner commodities (including commoditiesnot subject to tariff filing) carried by all theagreement member lines during the calendarquarter, or a list of the commodities ac-counting for 50 percent of the total linercargo carried by all the agreement memberlines during the calendar quarter, whicheverlist is longer. If 50 percent or more of thetotal liner cargo carried by all the agree-ment member lines in the sub-trade duringthe calendar quarter was containerized, thislist should include only containerized com-modities. If 50 percent or more of the totalliner cargo carried by all the agreementmember lines in the sub-trade during the cal-endar quarter was noncontainerized, this listshould include only non-containerized com-modities. Commodities should be identifiedat the 4-digit level of customarily used com-modity coding schedules. Where the agree-ment covers both U.S. inbound and outboundliner movements, inbound and outbound sub-trades should be stated separately.

Part VII

Part VII requires a statement of the cargovolume and revenue results experience byeach of the agreement lines from each majorcommodity in each sub-trade during the cal-endar quarter. The Monitoring Report speci-fies the format in which the information isto be reported.

Part VIII

Part VIII is required to be completed ifPart III is answered ‘‘YES.’’ Each conferenceline is required to indicate the extent towhich it has taken independent rate actionson each of the leading commodities in eachof the sub-trades. Part VIII also inquiresinto the type of shipper for whom independ-ent rate actions have been taken. The Mon-itoring Report specifies the format in whichthe information is to be reported.

Part IX

Part IX requires each of the agreementlines to indicate any change in the nature ortype of service it provided at any port withinthe entire geographic range of the agreementduring the calendar quarter.

Part X(A)

Part X(A) requires the name, title, address,telephone number and cable address, telex orfax number of a person the Commission maycontact regarding the Monitoring Report andany information provided therein.

Part X(B)

Part X(B) requires that a representative ofthe agreement lines sign the Monitoring Re-port and certify that the information in theReport and all attachments and appendicesare, to the best of his or her knowledge, true,correct and complete. The representative isalso required to indicate his or her relation-ship with the parties to the agreement.


Monitoring Report For Class A agreementsBetween or Among Ocean Common Carriers

Agreement Number —————————————(Assigned by FMC)Part I Agreement Name:

————————————————————————


Indicate any change occurring during thecalendar quarter to the list of other agree-ments set forth in Part II of the InformationForm.

Part III Conference Agreements

Does the agreement authorize the partiesto operate as a conference?Yes b No b

Part IV Market Share Information

Provide the market shares of all liner oper-ators within the entire geographic scope ofthe agreement and within each agreementsub-trade during the calendar quarter. Theinformation should be provided in the formatbelow:

MARKET SHARE REPORT FOR CALENDARQUARTER

[Indicate either entire agreement scope, or sub-trade name]

TEUs orother unit of

measure-ment

Percent

Agreement Market Share:Line A ..................................... X,XXX XX%Line B ..................................... X,XXX XX%Line C ..................................... X,XXX XX%


299


MARKET SHARE REPORT FOR CALENDARQUARTER—Continued


TEUs orother unit of

measure-ment

Percent

Total Agreement MarketShare ........................... X,XXX XX%

Non-Agreement Market Share:Line X ..................................... X,XXX XX%Line Y ..................................... X,XXX XX%Line Z ..................................... X,XXX XX%

Total Non-AgreementMarket Share ............... X,XXX XX%

Total Market .................... X,XXX 100%

Part V Cargo and Revenue Results Agreement-Wide

For each agreement member line, providetotal cargo carryings (measured in TEUs orother unit of measurement) during the cal-endar quarter within the entire geographicarea covered by the agreement, total reve-nues within the geographic area during thecalendar quarter, and average revenue perTEU or other unit of measurement. The in-formation should be provided in the formatbelow:

CALENDAR QUARTER

Carrier

TotalTEUs or

otherunit ofmeas-

urement

Totalreve-nues

Acg.Reve-

nue perTEU orotherunit ofmeas-

urement

A .......................................... .............. $ $B .......................................... .............. $ $C .......................................... .............. $ $Etc ........................................ .............. $ $

Part VI Leading Commodities

For each sub-trade within the scope of theagreement, list the top 10 commodities car-ried by all the parties during the calendarquarter, or list the commodities accountingfor 50 percent of the total carried by all theparties during the calendar quarter, which-ever list is longer. The information should beprovided in the format below:

CALENDAR QUARTER

I. Sub-tradeA. First leading commodityB. Second leading commodityC. Third leading commodity etc.

II. Sub-tradeA. First leading commodity etc.

Part VIII Cargo and Revenue Results by Sub-Trade

For each sub-trade within the scope of theagreement, and for each of the leading com-modities listed for each sub-trade in the re-sponse to Part VI, and for each party, statethe total TEUs (or other unit of measure-ment) carried and average gross revenue perTEU (or other unit of measurement).

The information should be provided in theformat below:

CALENDAR QUARTER

I. Sub-trade AA. First leading commodity1. Carrier A(a) Total TEUs (or other units of measure-

ment) carried(b) Average gross revenue per TEU (or

other unit of measurement)2. Carrier B)(a) etc.


Part VIII Independent Rate Actions (ifapplicable)

For each sub-trade within the scope of theagreement, and for each of the leading com-modities listed for each sub-trade in the re-sponse to Part VI, and for each party, state(a) the total number of independent rate ac-tions taken during the calendar quarter ap-plicable to that commodity moving in thatsub-trade; (b) how many of the total wereindependent rate actions taken to servicespecific shipper accounts; (c) of those, howmany were for non-vessel-operating commoncarriers, and how many were for shippers’ as-sociations. The information should be pro-vided in the format below:

CALENDAR QUARTER

I. Sub-trade AA. First leading commodity1. Carrier A(a) Number of IA rate actions(i) Number of IA rate actions taken to

service specific shipper accounts(i)(a) Number taken to service non-vessel-

operating common carrier accounts(1)(b) Number taken to service shippers’ as-

sociation accounts2. Carrier B(a) etc.B. Second leading commodity1. Carrier A(a) etc.



300

46 CFR Ch. IV (10–1–96 Edition)Pt. 572, App. D

Part IX Port Service

For each party, state any change in the na-ture or type of service (such as base port des-ignation, frequency of vessel calls, use of in-direct rather than direct service, etc.) ef-fected at any port within the entire geo-graphic scope of the agreement during thecalendar quarter.

Part X

(A) Identification of Person(s) to Contact Re-garding the Monitoring Report

(1) Name ———————————————————(2) Title ———————————————————(3) Firm Name and Business————————————————————————(4) Business Telephone Number————————————————————————(5) Cable Address, Telex or Fax Number————————————————————————(B) Certification

This Monitoring Report, together with anyand all appendices and attachments thereto,was prepared and assembled in accordancewith instructions issued by the Federal Mar-itime Commission. The information is, tothe best of my knowledge, true, correct, andcomplete.


[61 FR 11580, Mar. 21, 1996]

APPENDIX D TO PART 572—MONITORINGREPORT FOR CLASS B AGREEMENTSAND INSTRUCTIONS.

Instructions

A complete response must be supplied toeach part of the Report. Where the party an-swering a particular part is unable to supplya complete response, that party shall provideeither estimated data (with an explanationof why precise data are not available) or adetailed statement of reasons for noncompli-ance and the efforts made to obtain the re-quired information. All sources must beidentified.

Part I


Part II


Part III

Part III requires the market shares of allliner operators within the entire geographicscope of the agreement and in each sub-tradewithin the scope of the agreement during thecalendar quarter. A joint service shall betreated as a single liner operator, whether itis an agreement line or a non-agreementline.

Sub-trade is defined as the scope of all linermovements between each U.S. port rangewithin the scope of the agreement and eachforeign country within the scope of theagreement. Where the agreement covers bothU.S. inbound and outbound liner movements,inbound and outbound market shares shouldbe shown separately.



Gulf—Includes all ports along the Gulf ofMexico from Key West, Florida, to Browns-ville, Texas, inclusive. Also includes allports in Puerto Rico and U.S. Virgin Islands.

Pacific—Includes all ports in the State ofAlaska, Hawaii, California, Oregon andWashington. Also includes all ports in Guam,American Samoa, Northern Marinas, John-ston Island, Midway Island and Wake Island.

An application may be filed for a waiver ofthe definition of ‘‘sub-trade,’’ under the pro-visions described in 46 CFR 572.709. In anysuch application, the burden shall be on theagreement carriers to show that their mar-keting and pricing practices are done by as-certainable multi-country regions ratherthan by individuals countries or, in the caseof the United States, by broader areas thanthe port ranges defined herein. The Commis-sion will also consider whether the alternatedefinition of ‘‘sub-trade’’ requested by thewaiver application is reasonably consistentwith the definition of ‘‘sub-trade’’ applied inthe original Information Form filing for theagreement.


The total amount of liner cargo carried oneach liner operator’s liner vessels in the en-tire agreement scope or in the sub-trade dur-ing the calendar quarter, divided by the totalliner movement in the entire agreementscope or in the sub-trade during the calendarquarter, which quotient is multiplied by 100.The market shares held by non-agreementlines as by agreement lines must be pro-vided, stated separately in the format indi-cated.

If 50 percent or more of the total linercargo carried by the agreement lines in the


301

Federal Maritime Commission Pt. 572, App. D

entire agreement scope or in the sub-tradeduring the calendar quarter was container-ized, only containerized liner movements(measured in TEUs) must be used for deter-mining market share. If 50 percent or moreof the total liner cargo carried by the agree-ment lines was non-containerized cargo, onlynon-containerized liner movements must beused for determining market share. The unitof measure used in calculating amounts ofnon-containerized cargo must be specifiedclearly and applied consistently.

Liner movements is the carriage of linercargo by liner operators. Liner cargoes arecargoes carried on liner vessels in a linerservice. A liner operator is a vessel-operatingcommon carrier engaged in liner service.Liner vessels are those vessels used in a linerservice. Liner service refers to a definite, ad-vertised schedule of salings at regular inter-vals. All these definitions, terms and descrip-tions apply only for purposes of the Monitor-ing Report.

Part IV

Part IV requires each agreement memberline’s total liner cargo carrying within theentire geographic area covered by the agree-ment during the calendar quarter, each line’stotal liner revenues within the geographicarea during the calendar quarter, and aver-age revenue.

If 50 percent or more of the total linercargo carried by all the agreement memberlines in the geographic area covered by theagreement during the calendar quarter wascontainerized, each agreement member lineshould report only its total carrying of con-tainerized liner cargo (measured in TEUs)during the calender quarter within the geo-graphic area, total revenues generated by itscarriage of containerized liner cargo, and av-erage revenue per TEU. Conversely, if 50 per-cent or more of the total liner cargo carriedby all the agreement member lines in the ge-ographic area covered by the agreement dur-ing the calendar quarter was non-container-ized, each agreement member line should re-port only its total carryings of non-contain-erized liner cargo during the calendar quar-ter (specifying the unit of measurementused), total revenues generated by its car-riage of non-containerized cargo, and aver-age revenue per unit of measurement.

The Monitoring Report specifies the for-mat in which the information is to be re-ported. Where the agreement covers bothU.S. inbound and outbound liner movements,inbound and outbound data should be statedseparately.

Part V

Part V requires each of the agreementmember lines to indicate any change in thenature or type of service it provided at any

port within the entire geographic scope ofthe agreement during the calendar quarter.

Part VI(A)

Part VI(A) requires the name, title, ad-dress, telephone number and cable address,telex or fax number of a person the Commis-sion may contact regarding the MonitoringReport and any information provided there-in.

Part VI(B)

Part VI(B) requires that a representativeof the agreement lines sign the MonitoringReport and certify that the information inthe Report and all attachments and appen-dices are, to the best of his or her knowledge,true, correct and complete. The representa-tive is also required to indicate his or her re-lationship with the parties to the agreement.


Monitoring Report For Class B AgreementsBetween or Among Ocean Common Carriers


Part I Agreement

Name:————————————————————————



Part III Market Share Information

Provide the market shares of all liner oper-ators within the entire geographic scope ofthe agreement and within each sub-tradeduring the calendar quarter. The informa-tion should be provided in the format below:

MARKET SHARE REPORT FOR CALENDARQUARTER



Percent

Agreement Market Share:Line A ................................................ X,XXX XXLine B ................................................ X,XXX XXLine C ................................................ X,XXX XX

Total Agreement Market Share ..... X,XXX XX

Non-Agreement Market Share:Line X ................................................ X,XXX XXLine Y ................................................ X,XXX XXLine Z ................................................. X,XXX XX

Total Non-Agreement MarketShare .......................................... X,XXX XX


302

46 CFR Ch. IV (10–1–96 Edition)Pt. 572, App. E

MARKET SHARE REPORT FOR CALENDARQUARTER—Continued



Percent

Total Market ................................... X,XXX 100

Part IV Cargo and Revenue ResultsAgreement-Wide

For each agreement member line, providetotal cargo carryings (measured in TEUs orother unit of measurement) during the cal-endar quarter within the entire geographicarea covered by the agreement, total reve-nues within the geographic area during thecalendar quarter, and average revenue perTEU or other unit of measurement. The in-formation should be provided in the formatbelow:

CALENDAR QUARTER

Carrier

TotalTEUs or

otherunit ofmeas-

urement

Totalreve-nues

Avg.revenueper TEUor otherunit ofmeas-

urement

A .......................................... .............. $ $B .......................................... .............. $ $C .......................................... .............. $ $Etc ........................................ .............. $ $

Part V Port Service

For each party, state any change in the na-ture or type of service (such as base port des-ignation, frequency of vessel calls, use of in-direct rather direct service, etc.) effected atany port within the entire geographic scopeof the agreement during the calendar quar-ter.

Part VI

(A) Identification of Person(s) to ContactRegarding the Monitoring Report

(1) Name ———————————————————(2) Title ———————————————————(3) Firm Name and Business————————————————————————(4) Business Telephone Number————————————————————————(5) Cable Address, Telex or Fax Number————————————————————————(B) Certification

This Monitoring Report, together with anyand all appendices and attachments thereto,was prepared and assembled in accordancewith instructions issued by the Federal Mar-itime Commission. The information is, to

the best of my knowledge, true, correct, andcomplete.


[61 FR 11582, Mar. 21, 1996]

APPENDIX E TO PART 572—MONITORING

REPORT FOR CLASS C AGREEMENTS

AND INSTRUCTIONS

Instructions

A complete response must be supplied tothe Report. Where the filing party is unableto supply a complete response, that partyshall provide either estimated data (with anexplanation of why precise data are notavailable) or a detailed statement of reasonsfor noncompliance and the efforts made toobtain the required information. All sourcesmust be identified.

Part I


Part II


Part III

Part III requires a statement of anychange in the nature or type of service atany of the ports within the entire geographicscope of the agreement.

Part IV(A)

Part IV(A) requires the name, title, ad-dress, telephone number and cable address,telex or fax number of a person the Commis-sion may contact regarding the MonitoringReport and any information provided there-in.

Part IV(B)

Part IV(B) requires that a representativeof the agreement lines sign the MonitoringReport and certify that the information inthe Report and all attachments and appen-dices are, to the best of his or her knowledge,true, correct and complete. The representa-tive is also required to indicate his or her re-lationship with the parties to the agreement.


303



Monitoring Report For Class C AgreementsBetween or Among Ocean Common Carriers


Part I Agreement

Name:————————————————————————



Part III Port Service

For each party, state any change in the na-ture or type of service (such as base port des-ignation, frequency of vessel calls, use of in-direct rather direct service, etc.) effected atany port within the entire geographic scopeof the agreement during the calendar quar-ter.

Part IV

(A) Identification of Person(s) to ContactRegarding the Monitoring Report

(1) Name ——————————————————(2) Title ———————————————————(3) Firm Name and Business————————————————————————(4) Business Telephone Number————————————————————————(5) Cable Address, Telex or Fax Number————————————————————————(B) Certification

This Monitoring Report, together with anyand all appendices and attachments thereto,was prepared and assembled in accordancewith instruments issued by the Federal Mar-itime Commission. The information is, tothe best of my knowledge, true, correct, andcomplete.Name (please print or type)————————————————————————Title —————————————————————Relationship with parties to agreement————————————————————————————————————————————————Signature ——————————————————Date —————————————————————[61 FR 11584, Mar. 21, 1996]

PART 582—CERTIFICATION OFCOMPANY POLICIES AND EF-FORTS TO COMBAT REBATING INTHE FOREIGN COMMERCE OFTHE UNITED STATES

Sec.582.1 Scope.

582.2 Form of certification.582.3 Reporting requirements.582.91 OMB control numbers assigned pursu-


APPENDIX A TO PART 582—CERTIFICATION OFPOLICIES AND EFFORTS TO COMBAT REBAT-ING IN THE FOREIGN COMMERCE OF THEUNITED STATES.

AUTHORITY: 5 U.S.C. 553; 46 U.S.C. app. 1701,1702, 1707, 1709, 1712, and 1714–1716.

SOURCE: 51 FR 30864, Aug. 29, 1986, unlessotherwise noted.

§ 582.1 Scope.(a) The requirements set forth in this

part are binding upon every commoncarrier by water and ocean freight for-warder in the foreign commerce of theUnited States and, at the discretion ofthe Commission, will apply to anyshipper, shippers’ association, marineterminal operator, or broker. In thecase of a joint service operated as asingle entity, the joint service, ratherthan the participants, is responsible forthe provisions of this part.

(b) Information obtained under thispart will be used to maintain continu-ous surveillance over common carrierand ocean freight forwarder activitiesand to deter rebating practices. Failureto file the required certification mayresult in a civil penalty of $5,000 foreach day such violation continues.Failure of a common carrier to file ananti-rebate certification and publishnotice of certification in its tariffs asprovided by this part and part 514 ofthis chapter will result in tariff can-cellation effective forty-five (45) daysafter notice, as provided in§ 514.1(c)(1)(iii)(C) of this chapter or, ifan initial tariff filing, rejection. In theevent a common carrier’s rates arepublished in one or more conferencetariffs, the name of the common car-rier will be stricken from the list ofcarriers participating in those con-ference tariffs. The tariff(s) of anycommon carrier who files an anti-re-bate certification after December 31but before the end of the forty-fivedays notice period will not be can-celled; however, those common carrierswill be subject to civil penalties. Fail-ure of an ocean freight forwarder to filean anti-rebate certification as providedby this part and part 510 of this chapterwill result in suspension of that ocean


304

46 CFR Ch. IV (10–1–96 Edition)§ 582.2

freight forwarder’s license effectiveforty-five (45) days after notice, as pro-vided in § 510.16(a)(6) of this chapter.The license of any freight forwarderwho files an anti-rebate certificationafter December 31 but before the end ofthe forty-five days notice period willnot be suspended; however, thosefreight forwarders will be subject tocivil penalties. Failure of an oceanfreight forwarder applicant to includean anti-rebate certification with a li-cense application as provided by thispart and part 510 of this chapter willresult in rejection of that ocean freightforwarder applicant’s license applica-tion, as provided in § 510.25(b) of thischapter.

[51 FR 30864, Aug. 29, 1986, as amended at 55FR 35319, Aug. 29, 1990; 60 FR 27230, May 23,1995]

§ 582.2 Form of certification.

(a) The Chief Executive Officer, i.e.,the most senior officer within the firmdesignated by the board of directors,owners, stockholders, or controllingbody as responsible for the directionand management of the firm, of eachcommon carrier and ocean freight for-warder and, when so ordered by theCommission, the Chief Executive Offi-cer of any shipper, shippers’ associa-tion, marine terminal operator, orbroker, shall file with the Secretary,Federal Maritime Commission, a writ-ten certification, under oath, as pre-scribed in the format in appendix A tothis part, attesting:

(1) That it is the stated policy of thefirm that the payment, solicitation orreceipt by the firm of any rebate whichis unlawful under the Shipping Act of1984, is prohibited;

(2) That this policy was recently pro-mulgated to each owner, officer, em-ployee, and agent of the firm; and

(3) That the firm will fully cooperatewith the Commission in any investiga-tion of illegal rebating.

(b) A description of the details of themeasures instituted within the firm orotherwise to prohibit its involvementin the payment or receipt of illegal re-bates shall be attached to the certifi-cation.

§ 582.3 Reporting requirements.(a) Every common carrier required by

this part to file a written certificationin the form prescribed by § 582.2, shallfile such certification with its initialtariff and, thereafter, on or before De-cember 31 of each succeeding even-numbered calendar year.

(b) Every licensed ocean freight for-warder, required by § 510.25 of thischapter to file a written certificationin the form prescribed by § 582.2 of thispart, shall file such certification on orbefore December 31, 1992, and there-after, on or before December 31 of eachsucceeding even-numbered calendaryear. Every applicant for an oceanfreight forwarder license initially shallfile such certification with its licenseapplication.

(c) The certification required by thissection shall be valid from the initialfiling of a tariff or granting of an oceanfreight forwarder license through thefirst succeeding December 31 of aneven-numbered calendar year.

(d) Every person other than a com-mon carrier or ocean freight forwarderwhich is ordered by the Commissionpursuant to § 582.2 to file a written cer-tification shall file such certificationin the manner prescribed by the Com-mission.

(e) In those instances in which a sin-gle firm operates in more than one ca-pacity, such as both a non-vessel-oper-ating common carrier and an oceanfreight forwarder, a single certificatemay be submitted to satisfy the report-ing requirements of this section.

[57 FR 39624, Sept. 1, 1992]


This section displays the controlnumbers assigned to information col-lection requirements of the Commis-sion in this part by the Office of Man-agement and Budget pursuant to thePaperwork Reduction Act of 1980, Pub.L. 96–511. The Commission intends thatthis section comply with the require-ments of section 3507(f) of the Paper-work Reduction Act, which requiresthat agencies display a current controlnumber assigned by the Director of theOffice of Management and Budget


305


(OMB) for each agency information col-lection requirement.


582.2 through 582.4 ...................................... 3072–0028

[49 FR 36858, Sept. 20, 1984]

APPENDIX A TO PART 582—CERTIFI-CATION OF POLICIES AND EFFORTS TOCOMBAT REBATING IN THE FOREIGNCOMMERCE OF THE UNITED STATES

46 CFR Part 582

I, (Name of affiant), state under oath thatI am the Chief Executive Officer (State exacttitle) of (Exact names of firm), hereinafterreferred to as The Firm, and that:

1. It is, and shall continue to be, the policyof The Firm to prohibit its participation inthe payment, solicitation, or receipt of anyrebate, directly or indirectly, which is un-lawful under the provisions of the ShippingAct of 1984.

2. Each owner, officer, employee and agentof The Firm was notified or reminded of thispolicy on (Date).

3. The Firm affirms that it will cooperatefully with the Federal Maritime Commissionin any investigation of suspected rebating inUnited States foreign trades.

4. Attached hereto is a description of thedetails of measures instituted, within theFirm or otherwise, to prohibit its involve-ment in the payment or the receipt of illegalrebates in the foreign commerce of the Unit-ed States.

The period covered by this Certification isfrom (Date) to (Date).

The Firm is a (check each block applica-ble):lllllBrokerlllllFreight Forwarder (LicenseNo.————)lllllMarine Terminal OperatorlllllNon-Vessel-Operating CommonCarrierlllllShipperlllllShippers’ AssociationlllllVessel Operating Common Carrier————————————————————————(Signature of affiant)

Subscribed to and sworn before me this—————————— day of ——————,19————.————————————————————————Notary Public

PART 583—SURETY FOR NON-VES-SEL-OPERATING COMMON CAR-RIERS

Sec.583.1 Definitions.

583.2 Scope.583.3 Proof of financial responsibility, when

required.583.4 Financial responsibility requirements.583.5 Resident agent.583.6 Termination of bond or designation of

resident agent.583.7 Proof of Compliance.583.91 OMB control number assigned pursu-

ant to the Paperwork Reduction Act.APPENDIX A TO PART 583—NON-VESSEL-OPER-

ATING COMMON CARRIER (NVOCC) BONDFORM

APPENDIX B TO PART 583—NON-VESSEL-OPER-ATING COMMON CARRIER (NVOCC) INSUR-ANCE FORM (FMC–67)

APPENDIX C TO PART 583—NON-VESSEL-OPER-ATING COMMON CARRIER (NVOCC) GUAR-ANTY FORM (FMC–68)

APPENDIX D TO PART 583—NON-VESSEL-OPER-ATING COMMON CARRIER (NVOCC) GROUPBOND FORM (FMC–69)

AUTHORITY: 5 U.S.C. 553; 31 U.S.C. 9701; 46U.S.C. app. 1702, 1707, 1709, 1710–1712, 1716, and1721.

SOURCE: 56 FR 51993, Oct. 17, 1991, unlessotherwise noted.


In this part:(a) Act means the Shipping Act of

1984 (46 U.S.C. app. 1701 et seq.).(b) Common carrier means a person

holding itself out to the general publicto provide transportation by water ofcargo between the United States and aforeign country for compensation that:

(1) Assumes responsibility for thetransportation from port or point of re-ceipt to the port or point of destina-tion; and

(2) Utilizes, for all or part of thattransportation, a vessel operating onthe high seas or the Great Lakes be-tween a port in the United States anda port in a foreign country, except thatthe term does not include a commoncarrier engaged in ocean transpor-tation by ferry boat, ocean tramp, orchemical parcel-tanker. As used in thisparagraph, ‘chemical parcel-tanker’means a vessel whose cargo-carryingcapability consists of individual cargotanks for bulk chemicals that are apermanent part of the vessel, that havesegregation capability with piping sys-tems to permit simultaneous carriageof several bulk chemical cargoes withminimum risk of cross-contamination


306

46 CFR Ch. IV (10–1–96 Edition)§ 583.2

and that has a valid certificate of fit-ness under the International MaritimeOrganization Code for the Constructionand Equipment of Ships Carrying Dan-gerous Chemicals in Bulk.


(d) Non-vessel-operating common carrieror NVOCC means a common carrierthat does not operate the vessels bywhich the ocean transportation is pro-vided and is a shipper in its relation-ship with an ocean common carrier.

(e) Ocean common carrier means a ves-sel-operating common carrier.

(f) Person includes individuals, cor-porations, partnerships and associa-tions existing under or authorized bythe laws of the United States or of aforeign country.

§ 583.2 Scope.This part implements the Non-Ves-

sel-Operating Common Carrier Amend-ments of 1990, Public Law No. 101–595,section 710, and the Non-Vessel-Operat-ing Common Carrier Act of 1991, PublicLaw No. 102–251, section 201 and appliesto all NVOCCs operating in the water-borne foreign commerce of the UnitedStates.

[58 FR 5623, Jan. 22, 1993]


(a) Except as provided in paragraph(c) of this section, no person may pro-vide transportation as a non-vessel-op-erating common carrier or obtaintransportation for the account of suchNVOCC unless a surety bond, insuranceform, or guaranty form which dem-onstrates that such NVOCC is coveredfor any transportation-related liabilityunder the Shipping Act of 1984 has beenfurnished to and accepted by the Com-mission. Where a group or associationof NVOCCs accepts liability for all orpart of an NVOCC’s financial respon-sibilities for such NVOCC’s transpor-tation-related activities under theShipping Act of 1984, the group or asso-ciation of NVOCCs must file either agroup supplemental coverage bondform, insurance form or guaranty form,clearly identifying each NVOCC cov-ered, before a covered NVOCC may pro-vide transportation as a non-vessel-op-erating common carrier or obtain

transportation for the account of suchNVOCC. An individual NVOCC’s bond,insurance or guaranty coverage shallbe for $50,000 except in the case wherean individual NVOCC’s responsibility iscovered, in whole or in part, by a groupor association’s bond, insurance orguaranty. In such cases the group orassociation’s coverage must be for$50,000 per covered member NVOCC, or$1,000,000 in aggregate.

(b) Where more than one entity oper-ates under a common trade name, sepa-rate proof of financial responsibility isrequired covering each corporation orperson separately providing transpor-tation as a non-vessel-operating com-mon carrier.

(c) Any person which exclusivelytransports used household goods andpersonal effects for the account of theDepartment of Defense, or for the ac-count of the federal civilian executiveagencies shipping under the Inter-national Household Goods Program ad-ministered by the General Services Ad-ministration, or both, is not subject tothe requirements of this part, but maybe subject to other requirements, suchas alternative surety bonding, imposedby the Department of Defense or theGeneral Services Administration.

[58 FR 5623, Jan. 22, 1993, as amended at 60FR 44437, Aug. 28, 1995]

§ 583.4 Financial responsibility re-quirements.

Prior to the date it commences com-mon carriage operation, every non-ves-sel-operating common carrier shall es-tablish its financial responsibility forthe purpose of this part by one of thefollowing methods:

(a) Surety bond, by filing with theCommission, simultaneously with itstariff, a valid bond on Form FMC–48, inthe amount of $50,000. Bonds must beissued by a surety company found ac-ceptable by the Secretary of the Treas-ury.

(b) Insurance, by filing with the Com-mission, simultaneously with its tariff,evidence of insurance on Form FMC–67.The insurance must provide coveragefor damages, reparations or penaltiesarising from any transportation-relat-ed activities under the Shipping Act of1984 of the insured NVOCC and must beplaced with:


307


(1) An Insurer having a financial rat-ing of Class V or higher under the Fi-nancial Size Categories of A.M. Best &Company, or equivalent from an ac-ceptable international rating organiza-tion;

(2) Underwriters at Lloyd’s; or(3) Surplus lines insurers named on a

current ‘‘white list’’ issued by the Non-Admitted Insurers’ Information Officeof the National Association of Insur-ance Commissioners.This evidence of financial responsibil-ity shall be accompanied by: In thecase of a financial rating, the Insurer’sfinancial rating on the rating organiza-tion’s letterhead or designated form; inthe case of insurance provided by Un-derwriters at Lloyd’s, documentationverifying membership in Lloyd’s; andin the case of insurance provided bysurplus lines insurers, documentationverifying inclusion on a current ‘‘whitelist’’ issued by the Non-Admitted In-surers’ Information Office of the Na-tional Association of Insurance Com-missioners. The Insurer must certifythat it has sufficient and acceptable as-sets located in the United States tocover all transaction-related liabilitiesof the Insured NVOCC as specifiedunder the Shipping Act of 1984.

(c) Guaranty, by filing with the Com-mission, simultaneously with its tariff,evidence of guaranty on Form FMC–68.The guaranty must provide coveragefor damages, reparations or penaltiesarising from any transportation-relat-ed activities under the Shipping Act of1984 of the covered NVOCC and must beplaced with:

(1) A Guarantor having a financialrating of Class V or higher under theFinancial Size Categories of A.M. Best& Company, or equivalent from an ac-ceptable international rating organiza-tion;

(2) Underwriters at Lloyd’s; or(3) Surplus lines insurers named on a

current ‘‘white list’’ issued by the Non-Admitted Insurer’s Information Officeof the National Association of Insur-ance Commissioners.This evidence of financial responsibil-ity shall be accompanied by: In thecase of a financial rating, the Guaran-tor’s financial rating on the rating or-ganization’s letterhead or designatedform; in the case of a guaranty pro-

vided by Underwriters at Lloyd’s, docu-mentation verifying membership inLloyd’s; and in the case of an guarantyprovided by surplus lines insurers, doc-umentation verifying inclusion on acurrent ‘‘white list’’ issued by the Non-Admitted Insurers’ Information Officeof the National Association of Insur-ance Commissions. The guarantor mustcertify that it has sufficient and ac-ceptable assets located in the UnitedStates to cover all transportation-re-lated liabilities of the covered NVOCCas specified under the Shipping Act of1984.

(d) Evidence of financial responsibil-ity of the type provided for in para-graphs (a), (b) and (c) of this section es-tablished through and filed with theCommission by a group or associationof NVOCCs on behalf of its members,subject to the following conditions andprocedures;

(1) Each group or association ofNVOCCs shall notify the Commissionof its intention to participate in such aprogram and furnish documentation aswill demonstrate its authenticity andauthority to represent its members,such as articles of incorporation, by-laws, etc.;

(2) Each group or association ofNVOCCs shall provide the Commissionwith a list certified by its Chief Execu-tive Officer containing the names ofthose NVOCCs to which it will providecoverage, in whole or in part; the man-ner and amount of existing coverageeach covered NVOCC has; an indicationthat the existing coverage providedeach NVOCC is provided by a suretybond issued by a surety company foundacceptable to the Secretary of theTreasury, or by insurance or guarantyissued by a firm meeting the require-ments of paragraphs (b) or (c) of thissection with coverage limits of at least$50,000.00; and the name, address andfacsimile number of each surety, in-surer or guarantor providing coveragepursuant to this section. Each group orassociation of NVOCCs shall notify theCommission within thirty (30) days ofany changes to its list.

(3) The group or association shallprovide the Commission with a samplecopy of each type of existing financialresponsibility coverage used by mem-ber NVOCCs.


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46 CFR Ch. IV (10–1–96 Edition)§ 583.5

(4) Each group or association ofNVOCCs shall be responsible for ensur-ing that each member’s financial re-sponsibility coverage allows for claimsto be made in the United Statesagainst the Surety, Insurer or Guaran-tor for any judgment for damagesagainst the NVOCC arising from itstransportation-related activities underthe Shipping Act of 1984, or order forreparations issued pursuant to section11 of the Shipping Act of 1984, 46 U.S.C.app. 1710, or any penalty assessedagainst the NVOCC pursuant to section13 of the Shipping Act of 1984, 46 U.S.C.app. 1712. Each group or association ofNVOCCs shall be responsible for requir-ing each member NVOCC to provide itwith valid proof of financial respon-sibility annually.

(5) Where the group or association ofNVOCCs determines to secure on behalfof its members other forms of financialresponsibility, as specified by this sec-tion, for damages, reparations or pen-alties not covered by a member’s indi-vidual financial responsibility cov-erage, such additional coverage must:

(i) Allow claims to be made in theUnited States directly against thegroup or associations’s Surety, Insureror Guarantor for damages against eachcovered member NVOCC arising fromeach covered member NVOCC’s trans-portation-related activities under theShipping Act of 1984, or order for rep-arations issued pursuant to section 11of the Shipping Act of 1984, 46 U.S.C.app. 1710, or any penalty assessedagainst each covered member NVOCCpursuant to section 13 of the ShippingAct of 1984, 47 U.S.C. app. 1712; and

(ii) Be for an amount up $50,000.00 foreach covered member NVOCC up to amaximum of $1,000,000.00 for each groupor association of NVOCCs.

(6) The coverage provided by thegroup or association of NVOCCs on be-half of its members, in whole or inpart, shall be provided by:

(i) In the case of a surety bond, a sur-ety company found acceptable to theSecretary of the Treasury and issuedby such a surety company on FormFMC–69; and

(ii) In the case of insurance and guar-anty, a firm having a financial ratingof Class V or higher under the Finan-cial Size Categories of A.M. Best &

Company or equivalent from an accept-able international rating organization,Underwriters at Lloyd’s, or surplus lineinsurers named on a current ‘‘whitelist’’ issued by the Non-Admitted In-surer’s Information Office of the Na-tional Association of Insurance Com-missioners and issued by such firms onForm FMC–67 and Form FMC–68, re-spectively.

All forms and documents for establish-ing financial responsibility of NVOCCsprescribed in this section shall be sub-mitted to the Director, Bureau of Tar-iffs, Certification and Licensing, Fed-eral Maritime Commission, Washing-ton, DC 20573. The Federal MaritimeCommission shall not serve as deposi-tory or distributor to third parties ofbond, guaranty, or insurance funds inthe event of any claim, judgment, ororder for reparations. Such forms anddocuments must clearly identify thename; trade name, if any; the address;and effective January 1, 1994, the orga-nization number as provided in 46 CFR514.11(a) of each NVOCC. Copies of allforms may be obtained from the Com-mission’s Bureau of Tariffs, Certifi-cation and Licensing at the addresslisted above, or from any Area Rep-resentative listed at 46 CFR 501.41(d).

[58 FR 5623, Jan. 22, 1993, as amended at 61FR 51233, Oct. 1, 1996]

§ 583.5 Resident agent.

(a) Every non-vessel-operating com-mon carrier not domiciled in the Unit-ed States and every group or associa-tion of NVOCCs which provide, inwhole or in part, financial coverage fora member NVOCC’s financial respon-sibilities pursuant to § 583.4 not domi-ciled in the United States shall des-ignate and maintain a person in theUnited States as legal agent for the re-ceipt of judicial and administrativeprocess, including subpoenas.

(b) If the designated legal agent can-not be served because of death, disabil-ity, or unavailability, the Secretary,Federal Maritime Commission, will bedeemed to be the legal agent for serv-ice of process. Any person serving theSecretary must also send to theNVOCC, group or association of


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NVOCCs by registered mail, return re-ceipt requested, at its address pub-lished in its tariff on file with the Com-mission, a copy of each documentserved upon the Secretary, and shallattest to that mailing at the time serv-ice is made upon the Secretary.

(c) Service of administrative process,other than subpenas, may be effectedupon the legal agent by mailing a copyof the document to be served by cer-tified or registered mail, return receiptrequested. Administrative subpoenasshall be served in accordance with§ 502.134 of this chapter.

(d) Designations of resident agentunder paragraphs (a) and (b) of this sec-tion and provisions relating to serviceof process under paragraph (c) of thissection shall be published in theNVOCC’s tariff in accordance with§ 514.15(b)(24) of this chapter.

(e) Every non-vessel-operating com-mon carrier using a group or associa-tion of NVOCCs to cover all or part ofits financial responsibility requirementunder § 583.4 shall publish the name andaddress of the group or association’sresident agent for receipt of judicialand administrative process, includingsubpoenas, in its tariff in accordancewith § 514.15(b)(24)(ii) of this chapter.

[56 FR 51993, Oct. 17, 1991, as amended at 58FR 5624, Jan. 22, 1993; 60 FR 27230, May 23,1995]

§ 583.6 Termination of bond or des-ignation of resident agent.

(a) Upon receipt of notice of termi-nation by a surety bond, group supple-mental coverage bond, insurance cov-erage or guaranty, the Commissionshall notify the NVOCC or group or as-sociation of NVOCCs by certified orregistered mail at its address publishedin its tariff or on the list required of agroup or association on file with theCommission, that the Commissionshall, without hearing or other pro-ceeding, suspend or cancel the tariff ortariffs of the NVOCC or NVOCCs as ofthe termination date of the bond,group supplemental coverage bond, in-surance coverage or guaranty, unlessthe NVOCC, group or association ofNVOCCs submits a valid replacementsurety bond, group supplemental cov-erage bond, insurance coverage orguaranty before such termination date.

Replacement surety bonds, group sup-plemental coverage bonds, insurancecoverage or guaranties must bear an ef-fective date no later than the termi-nation date of the expiring bond, groupsupplemental coverage bond, insurancecoverage or guaranty. The liability ofthe retiring surety, insurer or guaran-tor shall be considered as having termi-nated as of the effective date of the re-placement surety bond, group supple-mental coverage bond, insurance policyor guaranty.

(b) Upon receipt of notice of termi-nation of a designation of residentagent, or upon receipt of alternativeservice of process upon the Secretaryin accordance with § 583.5(b), the Com-mission shall notify the NVOCC by cer-tified or registered mail, at its addresspublished in its tariff on file with theCommission, that the Commissionshall, without hearing or other pro-ceeding, suspend or cancel the tariff ortariffs of the NVOCC effective thirtydays after receipt of such notice of ter-mination or alternative service of proc-ess upon the Secretary unless theNVOCC publishes in its tariff a replace-ment designation of an agent in theUnited States for the receipt of judicialand administrative process before sucheffective date of suspension or can-cellation.

[56 FR 51993, Oct. 17, 1991, as amended at 58FR 5625, Jan. 22, 1993]

§ 583.7 Proof of Compliance.(a) No common carrier may transport

cargo for the account of a shipperknown by the carrier to be an NVOCCunless the carrier has determined thatthat NVOCC has a tariff and a bond asrequired by sections 8 and 23 of theAct.

(b) A common carrier can obtainproof of an NVOCC’s compliance withthe tariff and bonding requirements by:

(1) Consulting a current list providedby the Commission of tariffed andbonded NVOCCs; or

(2) Reviewing a copy of the tariff rulepublished by the NVOCC and in effectunder § 514.15(b)(24) of this chapter; or

(3) Any other appropriate procedure,provided that such procedure is setforth in the carrier’s tariff of generalapplicability as required by§ 514.15(b)(25) of this chapter.


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46 CFR Ch. IV (10–1–96 Edition)§ 583.91

(c) A common carrier that has em-ployed the procedure prescribed in ei-ther paragraph (b) (1) or (2) of this sec-tion shall be deemed to have met itsobligations under section 10(b)(14) ofthe Act, unless the common carrierknew that such NVOCC was not incompliance with the tariff and bondingrequirements.

(d) The fee for providing the list oftariffed and bonded NVOCCs referred toin paragraph (b)(1) of this section is$122. The list is available in severalforms: Hard paper copy, diskette, ortape.

[56 FR 51993, Oct. 17, 1991, as amended at 59FR 59172, Nov. 16, 1994; 60 FR 27231, May 23,1995]

§ 583.91 OMB control number assignedpursuant to the Paperwork Reduc-tion Act.

The information collection require-ments contained in this part have beenapproved by the Office of Managementand Budget (OMB) in accordance with44 U.S.C. chapter 35 and have been as-signed OMB control number 3072–0053.

APPENDIX A TO PART 583—NON-VESSEL-OPERATING COMMON CARRIER(NVOCC) BOND FORM

FEDERAL MARITIME COMMISSION NON-VESSELOPERATING COMMON CARRIER (NVOCC)BOND (SECTION 23, SHIPPING ACT OF 1984)

llllllll, as Principal (hereinaftercalled Principal), and llllllll, asSurety (hereinafter called Surety) are heldand firmly bound unto the United States ofAmerica in the sum of $llll for the pay-ment of which sum we bind ourselves, ourheirs, executors, administrators, successorsand assigns, jointly and severally.

Whereas, Principal operates as an NVOCCin the waterborne foreign commerce of theUnited States, has an NVOCC tariff on filewith the Federal Maritime Commission, andpursuant to section 23 of the Shipping Act of1984 has elected to file this bond with theCommission;

Now, Therefore, The condition of this obli-gation is that the penalty amount of thisbond shall be available to pay any judgmentfor damages against the Principal arisingfrom the Principal’s transportation relatedactivities or order for reparations issued pur-suant to section 11 of the Shipping Act of1984, 46 U.S.C. app. 1710, or any penalty as-sessed against the Principal pursuant to sec-tion 13 of the Shipping Act of 1984, 46 U.S.C.app. 1712.

This bond shall inure to the benefit of anyand all persons who have obtained a judg-ment for damages against the Principal aris-ing from its transportation related activitiesor order of reparation issued pursuant to sec-tion 11 of the Shipping Act of 1984, and to thebenefit of the Federal Maritime Commissionfor any penalty assessed against the Prin-cipal pursuant to section 13 of the ShippingAct of 1984. However, the bond shall notapply to shipments of used household goodsand personal effects for the account of theDepartment of Defense or the account of fed-eral civilian executive agencies shippingunder the International Household GoodsProgram administered by the General Serv-ices Administration.

The liability of the Surety shall not be dis-charged by any payment or succession ofpayments hereunder, unless and until suchpayment or payments shall aggregate thepenalty of this bond, and in no event shallthe Surety’s total obligation hereunder ex-ceed said penalty regardless of the number ofclaims or claimants.

This bond is effective the llll day ofllllll, 19ll, and shall continue in ef-fect until discharged or terminated as hereinprovided. The Principal or the Surety may atany time terminate this bond by written no-tice to the Federal Maritime Commission atits office in Washington, DC. Such termi-nation shall become effective thirty (30) daysafter receipt of said notice by the Commis-sion. The Surety shall not be liable for anytransportation related activities of the Prin-cipal after the expiration of the thirty (30)day period but such termination shall not af-fect the liability of the Principal and Suretyfor any event occurring prior to the datewhen said termination becomes effective.

The underwriting Surety will promptly no-tify the Director, Bureau of Tariffs, Certifi-cation and Licensing, Federal MaritimeCommission, Washington, DC 20573, of anyclaim(s) against this bond.

Signed and sealed this llll day ofllllll, 19ll.

(Please type name of signer under eachsignature.)

————————————————————————Individual Principal or Partner————————————————————————Business Address————————————————————————Individual Principal or Partner————————————————————————Business Address————————————————————————Individual Principal or Partner————————————————————————Business Address————————————————————————Trade Name, If Any


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Federal Maritime Commission Pt. 583, App. B

————————————————————————Corporate Principal————————————————————————State of Incorporation————————————————————————Trade Name, If Any————————————————————————Business Address————————————————————————By————————————————————————Title(Affix Corporate Seal)————————————————————————Corporate Surety————————————————————————Business Address————————————————————————By————————————————————————Title(Affix Corporate Seal)

[56 FR 51993, Oct. 17, 1991, as amended at 60FR 44437, Aug. 28, 1995]

APPENDIX B TO PART 583—NON-VESSEL-OPERATING COMMON CARRIER(NVOCC) INSURANCE FORM [FMC–67]

Form FMC–[67]


Non-Vessel-Operating Common Carrier In-surance Form Furnished as Evidence of Fi-nancial Responsibility Under 46 U.S.C. app.1721

This is to certify, that the————————————————————————(Name of Insurance Company)(hereinafter ‘‘Insurer’’) of

————————————————————————(Home Office Address of Company)has issued to

————————————————————————(Non-Vessel-Operating Common Carrier orGroup or Association of NVOCCs)(hereinafter called ‘‘Insured’’) of

————————————————————————(Address of Non-Vessel-Operating CommonCarrier or Group or Association of NVOCCs)

a policy or policies of insurance for purposesof complying with the provisions of 46 U.S.C.app. 1721 and the rules and regulations, asamended, of the Federal Maritime Commis-sion, which provide compensation for dam-ages, reparations or penalties arising fromthe transportation-related activities of In-sured, and made pursuant to the ShippingAct of 1984.

Whereas, the Insured is or may become aNon-Vessel-Operating Common Carrier

(‘‘NVOCC’’) subject to the Shipping Act of1984, 46 U.S.C. app. 1701 et seq., and the rulesand regulations of the Federal MaritimeCommission (‘‘Commission’’), or is or maybecome a group or association of NVOCCs,and desires to establish financial responsibil-ity in accordance with section 23 of the Ship-ping 23 of 1984, has elected to file with theCommission this Insurance Form as evidenceof its financial responsibility and evidence ofa financial rating for the Insurer of Class Vor higher under the Financial Size Cat-egories of A.M. Best & Company or equiva-lent from an acceptable international ratingorganization on such organization’s letter-head or designated form, or, in the case of in-surance provided by Underwriters at Lloyd’s,documentation verifying membership inLloyd’s, or, in the case of surplus lines insur-ers, documentation verifying inclusion on acurrent ‘‘white list’’ issued by the Non-Ad-mitted Insurers’ Information Office of theNational Association of Insurance Commis-sioners.

Whereas, this Insurance is written to as-sure compliance by the Insured with section23 of the Shipping Act of 1984, 46 U.S.C. app.1721, and the rules and regulations of theFederal Maritime Commission relating toevidence of financial responsibility for non-vessel-operating common carriers, this In-surance shall be available to pay any and allclaimants to whom the Insured may be le-gally liable for any damages against the In-sured arising from the Insured’s transpor-tation-related activities under the ShippingAct of 1984, or order for reparations issuedpursuant to section 11 of the Shipping Act of1984, 46 U.S.C. app. 1710; or any penalty as-sessed against the Insured pursuant to sec-tion 13 of the Shipping Act of 1984, 46 U.S.C.app. 1712; provided, however, that Insurer’sobligation for a group or association ofNVOCCs shall extend only to such damages,reparations or penalties described herein asare not covered by another insurance policy,guaranty or surety bond held by theNVOCC(s) against which a claim or finaljudgment has been brought and that Insur-er’s total obligation hereunder shall not ex-ceed Fifty Thousand Dollars ($50,000.00) perNVOCC, or One Million Dollars ($1,000,000.00)in aggregate, for a group or association ofNVOCCs.

Whereas, the Insurer certifies that it hassufficient and acceptable assets located inthe United States to cover all liabilities ofInsured herein described, this Insuranceshall inure to the benefit of any and all per-sons who have a bona fide claim against theInsured arising from its transportation-re-lated activities under the Shipping Act of1984, or order of reparation issued pursuantto section 11 of the Shipping Act of 1984, andto the benefit of the Federal Maritime Com-mission for any penalty assessed against the


312


Insured pursuant to section 13 of the Ship-ping Act of 1984.

The Insurer consents to be sued directly inrespect of any bona fide claim owed by In-sured for damages, reparations or penaltiesarising from the transportation-related ac-tivities under the Shipping Act of 1984 of In-sured in the event that such legal liabilityhas not been discharged by the Insured with-in 30 days after a claimant has obtained afinal judgment (after appeal, if any) againstthe Insured from a United States Federal orState Court of competent jurisdiction, theFederal Maritime Commission, or where allparties and claimants mutually consent,from a foreign court, or where such claimanthas become entitled to payment of a speci-fied sum by virtue of a compromise settle-ment agreement made with the Insured,whereby, upon payment of the agreed sum,the Insured is to be fully, irrevocably andunconditionally discharged from all furtherliability to such claimant; provided, how-ever, that Insurer’s total obligation here-under shall not exceed Fifty Thousand Dol-lars ($50,000.00) per NVOCC, or One MillionDollars ($1,000,000,00) for a group or associa-tion of NVOCCs.

The liability of the Insurer shall not bedischarged by any payment or succession ofpayments hereunder, unless and until suchpayment or payments shall aggregate thepenalty of the Insurance or Fifty ThousandDollars ($50,000.00) per NVOCC, or One Mil-lion Dollars ($1,000,000.00) for a group or asso-ciation of NVOCCs, whichever comes first,regardless of the financial responsibility orlack thereof, or the solvency or bankruptcy,of Insured.

The insurance evidenced by this undertak-ing shall be applicable only in relation to in-cidents occurring on or after the effectivedate and before the date termination of thisundertaking becomes effective. The effectivedate of this undertaking shall be llll dayof llll, 19lll, and shall continue in ef-fect until discharged or terminated as hereinprovided. The Insured or the Insurer may atany time terminate the Insurance by filing anotice in writing with the Federal MaritimeCommission at its office in Washington, DC.Such termination shall become effectivethirty (30) days after receipt of said noticeby the Commission. The Insurer shall not beliable for any transportation-related activi-ties under the Shipping Act of 1984 of the In-sured after the expiration of the thirty (30)day period but such termination shall not af-fect the liability of the Insured and Insurerfor such activities occurring prior to thedate when said termination becomes effec-tive.

Insurer or Insured shall immediately givenotice to the Federal Maritime Commissionof all lawsuits filed, judgments rendered, andpayments made under the insurance policy.

(Name of Agent) llllllllll domi-ciled in the United States, with offices lo-cated in the United States, atllllllllll is hereby designated asthe Insurer’s agent for service of process forthe purposes of enforcing the Insurance cer-tified to herein.

If more than one insurer joins in executingthis document, that action constitutes jointand several liability on the part of the insur-ers.

The Insurer will promptly notify the Direc-tor, Bureau of Tariffs, Certification and Li-censing, Federal Maritime Commission,Washington, DC 20573, of any claim(s)against the Insurance.

Signed and sealed this lllll day oflll, 19ll.

————————————————————————Signature of Official signing on behalf of In-surer

————————————————————————Type Name and Title of signer

This Insurance Form has been filed withthe Federal Maritime Commission.

[58 FR 5625, Jan. 22, 1993]

APPENDIX C TO PART 583—NON-VESSEL-OPERATING COMMON CARRIER(NVOCC) GUARANTY FORM [FMC–68]

Form FMC–[68]


Guaranty in Respect of Non-Vessel-Operat-ing Common Carrier Liability for Dam-ages, Reparations or Penalties ArisingFrom Transportation-Related ActivitiesUnder the Shipping Act of 1984

1. Whereas lllllllll (Name of ap-plicant) (Hereinafter referred to as the ‘‘Ap-plicant’’) is or may become a Non-Vessel-Op-erating Common Carrier (‘‘NVOCC’’) subjectto the Shipping Act of 1984, 46 U.S.C. app.1701 et seq., and the rules and regulations ofthe Federal Maritime Commission (‘‘FMC’’),or is or may become a group or associationof NVOCCs, and desires to establish its finan-cial responsibility in accordance with sec-tion 23 of the 1984 Act, then, provided thatthe FMC shall have accepted, as sufficientfor that purpose, the Applicant’s application,supported by evidence of a financial ratingfor the Guarantor of Class V or higher underthe Financial Size Categories of A.M. Best &Company or equivalent from an acceptableinternational rating organization on suchrating organization’s letterhead or des-ignated form, or, in the case of Guarantyprovided by Underwriters at Lloyd’s, docu-mentation verifying membership in Lloyd’s,or, in the case of surplus lines insurers, docu-mentation verifying inclusion on a current


313


‘‘white list’’ issued by the Non-Admitted In-surers’ Information Office of the NationalAssociation of Insurance Commissioners, theundersigned Guarantor certifies that it hassufficient and acceptable assets located inthe Untied States to cover all transpor-tation-related liabilities of the coveredNVOCC as specified under the Shipping Actof 1984, the undersigned Guarantor herebyguarantees to discharge the Applicant’s legalliability to indemnify bona fide claimantsfor damages, reparations or penalties arisingfrom Applicant’s transportation-related ac-tivities under the Shipping Act of 1984 in theevent that such legal liability has not beendischarged by the Applicant within 30 daysafter any such claimant has obtained a finaljudgment (after appeal, if any) against theApplicant from a United States Federal orState Court of competent jurisdiction, theFMC, or where all parties and claimants mu-tually consent, from a foreign court, orwhere such claimant has become entitled topayment of a specified sum by virtue of acompromise settlement agreement madewith the Applicant, with the approval of theGuarantor, whereby, upon payment of theagreed sum, the Applicant is to be fully, ir-revocably and unconditionally dischargedfrom all further liability to such claimant.In the case of a guaranty covering the liabil-ity of a group or association of NVOCCs,Guarantor’s obligation extends only to suchdamages, reparations or penalties describedherein as are not covered by another insur-ance policy, guaranty or surety bond held bythe NVOCC(s) against which a claim or finaljudgment has been brought.

2. The Guarantor’s liability under thisGuaranty is respect to any claimant shallnot exceed the amount due to such claimant;and the aggregate amount of the Guarantor’sliability under this Guaranty shall not ex-ceed Fifty Thousand Dollars ($50,000.00) perNVOCC, or One Million Dollars ($1,000,000.00)in aggregate, for each group or association ofNVOCCs.

3. The Guarantor’s liability under thisGuaranty shall attach only in respect ofsuch activities giving rise to a cause of ac-tion against the Applicant, in respect of anyof its transportation-related activities underthe Shipping Act of 1984, occurring after theGuaranty has become effective, and beforethe expiration date of this Guaranty, whichshall be the date 30 days after the date of re-ceipt by FMC of notice in writing that eitherApplicant or the Guarantor has elected toterminate this Guaranty. The Guarantorand/or Applicant specifically agree to filesuch written notice of cancellation.

4. Guarantor shall not be liable for pay-ments of any of the damages, reparations orpenalties hereinbefore described which arise

as the result of any transportation-relatedactivities of Applicant after the cancellationof the Guaranty, as herein provided, but suchcancellation shall not affect the liability ofthe Guarantor for the payment of any suchdamages, reparations or penalties prior tothe date such cancellation becomes effective.

5. Guarantor shall pay, subject up to limitof Fifty Thousand Dollars ($50,000.00), di-rectly to a claimant any sum or sums whichGuarantor, in good faith, determines thatthe Applicant has failed to pay and would beheld legally liable by reason of Applicant’stransportation-related activities, or its legalresponsibilities under the Shipping Act of1984 and the rules and regulations of the Fed-eral Maritime Commission, made by Appli-cant while this agreement is in effect, re-gardless of the financial responsibility orlack thereof, or the solvency or bankruptcy,of Applicant.

6. Applicant or Guarantor shall imme-diately give written notice to the FMC of alllawsuits filed, judgments rendered, and pay-ments made under the Guaranty.

7. Applicant and Guarantor agree to handlethe processing and adjudication of claims byclaimants under the Guaranty establishedherein in the United States, unless by mu-tual consent of all parties and claimants an-other country is agreed upon. Guarantoragrees to appoint an agent for service ofprocess in the United States.

8. This Guaranty shall be governed by thelaws in the State of lllllllll to theextent not inconsistent with the rules andregulations of the FMC.

9. This Guaranty is effective the llllday of lllll, 19ll, 12:01 a.m., standardtime at the address of the Guarantor as stat-ed herein and shall continue in force untilterminated as herein provided.

10. The Guarantor hereby designates as theGuarantor’s legal agent for service of processdomiciled in the United States.llllllllll, with offices located inthe United States at llllllllll, forthe purposes of enforcing the Guaranty de-scribed herein.

————————————————————————(Place and Date of Execution)

————————————————————————(Type Name of Guarantor)

————————————————————————(Type Address of Guarantor)

By ——————————————————————(Signature and Title)

[58 FR 5626, Jan. 22, 1993]


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46 CFR Ch. IV (10–1–96 Edition)Pt. 583, App. D

APPENDIX D TO PART 583—NON-VESSEL-OPERATING COMMON CARRIER(NVOCC) GROUP BOND FORM [FMC–69]

Form FMC—[69]


Federal Maritime Commission Non-Vessel-Operating Common Carrier (NVOCC) GroupSupplemental Coverage Bond Form (Sec-tion 23, Shipping Act of 1984)lllllllll, as Principal (hereinaftercalled Principal), and llllllllll,as Surety (hereinafter called Surety) areheld and firmly bound unto the UnitedStates of America in the sum of $lllllfor the payment of which sum we bind our-selves, our heirs, executors, administra-tors, successors and assigns, jointly andseverally.

Whereas, (Principal) llllllllll op-erates as a group or association of non-ves-sel-operating common carriers in the water-borne foreign commerce of the United Statesand pursuant to section 23 of the ShippingAct of 1984 has elected to file this bond withthe Federal Maritime Commission (‘‘Com-mission’’);

Now, Therefore, the conditions of this obli-gation are that the penalty amount of thisbond shall be available to pay any judgmentagainst the NVOCCs enumerated in appendixA of this bond for damages arising from anyor all of the identified NVOCCs’ transpor-tation-related activities under the ShippingAct of 1984, 46 U.S.C. app. 1701 et seq., or orderfor reparations issued pursuant to section 11of the Shipping Act of 1984, 46 U.S.C. app.1710, or any penalty assessed pursuant to sec-tion 13 of the Shipping Act of 1984, 46 U.S.C.app. 1712 that are not covered by the identi-fied NVOCCs’ individual insurance pol-icy(ies), guaranty(ies) or surety bond(s).

This bond shall inure to the benefit of anyand all persons who have obtained a judg-ment for damages against any or all of theNVOCCs identified in appendix A not coveredby said NVOCCs insurance policy(ies), guar-anty(ies) or surety bond(s) arising from saidNVOCCs transportation-related activitiesunder the Shipping Act of 1984, or order forreparation issued pursuant to section 11 ofthe Shipping Act of 1984, and to the benefitof the Federal Maritime Commission for anypenalty assessed against said NVOCCs pursu-ant to section 13 of the Shipping Act of 1984.However, the bond shall not apply to ship-ments of used household goods and personaleffects for the account of the Department ofDefense or the account of federal civilian ex-ecutive agencies shipping under the Inter-national Household Goods Program adminis-tered by the General Services Administra-tion.

The liability of the Surety shall not be dis-charged by any payment or succession ofpayments hereunder, unless and until suchpayment or payments shall aggregate thepenalty of this bond, and in no event shallthe Surety’s total obligation hereunder ex-ceed Fifty Thousand Dollars ($50,000.00) perNVOCC identified in appendix A, or One Mil-lion Dollars ($1,000,000.00) regardless of thenumber of NVOCCs, claims or claimants.

This bond is effective the llll day ofllllll, 19ll, and shall continue in ef-fect until discharged or terminated as hereinprovided. The Principal or the Surety may atany time terminate this bond by written no-tice to the Federal Maritime Commission atits office in Washington, DC. Such termi-nation shall become effective thirty (30) daysafter receipt of said notice by the Commis-sion. The Surety shall not be liable for anytransportation-related activities of theNVOCCs identified in appendix A as coveredby the Principal after the expiration of thethirty (30) day period, but such terminationshall not affect the liability of the Principaland Surety for any transportation-relatedactivity occurring prior to the date whensaid termination becomes effective.

The Principal will promptly notify the un-derwriting Surety and the Director, Bureauof Tariffs, Certification and Licensing, Fed-eral Maritime Commission, Washington, DC20573, of any additions, deletions or changesto the NVOCCs enumerated in appendix A. Inthe event of additions to appendix A, cov-erage will be effective upon receipt of suchnotice, in writing, by the Commission at itsoffice in Washington, DC. In the event of de-letions to appendix A, termination of cov-erage for such NVOCC(s) shall become effec-tive thirty (30) days after receipt of writtennotice by the Commission. Neither the Prin-cipal nor the Surety shall be liable for anytransportation-related activities of theNVOCC(s) deleted from appendix A after theexpiration of the thirty (30) day period, butsuch termination shall not affect the liabil-ity of the Principal and Surety for anytransportation-related activity of saidNVOCC(s) occurring prior to the date whensaid termination becomes effective.

The underwriting Surety will promptly no-tify the Director, Bureau of Tariffs, Certifi-cation and Licensing, Federal MaritimeCommission, Washington, DC 20573, of anyclaim(s) against this bond.

Signed and sealed this llll day of,19ll∏ (Please type name of signer undereach signature).

————————————————————————Individual Principal or Partner

————————————————————————Business Address



315





————————————————————————Trade Name, if Any

————————————————————————Corporate Principal

————————————————————————Place of Incorporation

————————————————————————Trade Name, If Any

————————————————————————Business Address (Affix Corporate Seal)

————————————————————————By

————————————————————————Title

————————————————————————Principal’s Agent for Service of Process (Re-quired if Principal is not a U.S. Corporation)————————————————————————Agent’s Address

————————————————————————Corporate Surety

————————————————————————Business Address (Affix Corporate Seal)

————————————————————————By

————————————————————————Title

[58 FR 5627, Jan. 22, 1993, as amended at 60FR 44438, Aug. 28, 1995]

PART 585—REGULATIONS TO AD-JUST OR MEET CONDITIONS UN-FAVORABLE TO SHIPPING IN THEFOREIGN TRADE OF THE UNITEDSTATES


Sec.585.101 Purpose.585.102 Scope.585.103 Definitions.585.104 Confidentiality.585.105 Consultation.

Subpart B—Production of Information

585.201 Information orders.585.202 Type of information.585.203 Failure to provide information.

Subpart C—Conditions Unfavorable toShipping

585.301 Findings.

Subpart D—Petitions For Relief

585.401 Who may file.585.402 Filing of petitions.585.403 Contents of petitions.585.404 Amendment or dismissal of peti-

tions.

Subpart E—Proceedings

585.501 Participation of interested persons.585.502 Discovery.585.503 Subpoenas.585.504 Witness fees.585.505 Failure to supply information.585.506 Enforcement of orders.585.507 Postponement, discontinuance, or

suspension of action.585.508 Publication, content, and effective

date of regulation.

Subpart F—Corrective Actions

585.601 Actions to correct unfavorable con-ditions.

585.602 Penalty.

AUTHORITY: 5 U.S.C. 553; sec. 19(1)(b), (5),(6), (7), (8), (9), (10), (11) and (12) of the Mer-chant Marine Act, 1920, 46 U.S.C. app.876(1)(b), (5), (6), (7), (8), (9), (10), (11) and (12);Reorganization Plan No. 7 of 1961, 75 Stat.840; and sec. 10002 of the Foreign ShippingPractices Act of 1988, 46 U.S.C. app. 1710a.

SOURCE: 58 FR 64910, Dec. 10, 1993, unlessotherwise noted.


§ 585.101 Purpose.It is the purpose of the regulations of

this part to declare certain conditionsresulting from governmental actionsby foreign nations or from the competi-tive methods or practices of owners,operators, agents, or masters of vesselsof a foreign country unfavorable toshipping in the foreign trade of theUnited States and to establish proce-dures by which persons who are or canreasonably expect to be adversely af-fected by such conditions may petitionthe Federal Maritime Commission forthe issuance of regulations under theauthority of section 19 of the MerchantMarine Act of 1920. It is the furtherpurpose of the regulations of this partto afford notice of the general cir-cumstances under which the authoritygranted to the Commission under sec-tion 19 may be invoked and the natureof the regulatory actions con-templated.


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46 CFR Ch. IV (10–1–96 Edition)§ 585.102

§ 585.102 Scope.Regulatory actions may be taken

when the Commission finds, on its ownmotion or upon petition, that a foreigngovernment has promulgated and en-forced or intends to enforce laws, de-crees, regulations or the like, or hasengaged in or intends to engage inpractices which presently have or pro-spectively could create conditions un-favorable to shipping in the foreigntrade of the United States, or whenowners, operators, agents or masters offoreign vessels engage in or intend toengage in, competitive methods orpractices which have created or couldcreate such conditions.

§ 585.103 Definitions.When used in this part:(a) Act means the Merchant Marine

Act, 1920, as amended by Public LawNo. 101–595.

(b) Person means individuals, cor-porations, partnerships and associa-tions existing under or authorized bythe laws of the United States or of aforeign country, and includes any com-mon carrier, tramp operator, bulk op-erator, shipper, shippers’ association,importer, exporter, consignee, oceanfreight forwarder, marine terminal op-erator, or any component of the Gov-ernment of the United States.

(c) Voyage means an inbound or out-bound movement between a foreigncountry and the United States by avessel engaged in the United Statesoceanborne trade. Each inbound or out-bound movement constitutes a sepa-rate voyage.

§ 585.104 Confidentiality.Notwithstanding any other law, the

Commission may refuse to disclose tothe public a response or other informa-tion provided under the terms of thispart.

§ 585.105 Consultation.(a) Consultation with other agencies.

The Commission may consult with,seek the cooperation of, or make rec-ommendations to other appropriateagencies prior to taking any actionunder this part.

(b) Request for resolution through dip-lomatic channels. Upon the filing of a

petition, or on its own motion whenthere are indications that conditionsunfavorable to shipping in the foreigntrade of the United States may exist,the Commission may notify the Sec-retary of State that such conditionsapparently exist, and may request thatthe Secretary seek resolution of thematter through diplomatic channels. Ifrequest is made, the Commission willgive every assistance in such efforts,and the Commission may request theSecretary to report the results of suchefforts at a specified time.

Subpart B—Production ofInformation

§ 585.201 Information orders.

In furtherance of the purposes of thispart—

(a) The Commission may, by order,require any person (including any com-mon carrier, tramp operator, bulk op-erator, shipper, shippers’ association,ocean freight forwarder, or marine ter-minal operator, or any officer, re-ceiver, trustee, lessee, agent, or em-ployee thereof, to file with the Com-mission a report, answers to questions,documentary material, or other infor-mation which the Commission consid-ers necessary or appropriate;

(b) The Commission may require a re-port or answers to questions to bemade under oath;

(c) The Commission may prescribethe form and the time for response to areport or answers to questions.

§ 585.202 Type of information.

In order to aid in the determinationof whether conditions unfavorable toshipping in the foreign trade of theUnited States exist, or in order to aidin the formulation of appropriate regu-lations subsequent to a finding thatconditions unfavorable to shipping inthe foreign trade of the United Statesexist, the Commission may, when itdeems necessary or appropriate, andwithout further proceedings, order any:

(a) Owner, operator, or charterer inthe affected trade to furnish any or allof the following information:

(1) Statistics for a representative pe-riod showing passengers or cargo car-ried to and from the United States in


317


the affected trade on vessels owned, op-erated or chartered by it, by type,source, value, and direction;

(2) Information for a representativeperiod on the activities of vesselsowned, operated, or chartered, whichshall include sailings to and from Unit-ed States ports, costs incurred, taxesor other charges paid to authorities,and subsidies or other payments re-ceived from foreign authorities;

(3) Information for a specified futureperiod on the prospective activities ofvessels which it owns, operates or char-ters or plans to own, operate or char-ter, to and from United States ports,which shall include projected sailings,anticipated costs, taxes or othercharges to be paid to authorities, andexpected subsidies or other paymentsto be received from foreign authorities;and

(4) Such other information that theCommission considers relevant to dis-covering or determining the existenceof general or special conditions unfa-vorable to shipping in the foreign tradeof the United States.

(b) Shipper, shippers’ association,ocean freight forwarder, or non-vessel-operating common carrier in the af-fected trade to furnish any or all of thefollowing information:

(1) Information for a representativeperiod showing shipments made, typeof cargo, commodity, carrier and vesselon which shipment was made, includ-ing furnishing copies of bills of ladingand other shipping documents;

(2) Information relating to the appli-cation for, grant of, or securing ofwaivers or other exemption from re-quirements imposed by foreign govern-ments that cargo move on national-flag, conference, or non-conference ves-sels;

(3) Amount of brokerage, freight for-warder compensation or other chargescollected or paid in connection withshipments in the affected trade; and

(4) such other information that theCommission considers relevant to dis-covering or determining the existenceof general or special conditions unfa-vorable to shipping in the foreign tradeof the United States.

(c) Any marine terminal operator tofurnish any or all of the following in-formation:

(1) Marine terminal facilities agree-ments, whether or not on file with theCommission, into which it has enteredwith any ocean carrier in the affectedtrade;

(2) Information for a representativeperiod showing the difference betweenthe rates agreed to for use of its facili-ties by any ocean carrier serving theaffected trade pursuant to an agree-ment authorizing preferential treat-ment or lease terms and those rateswhich would otherwise have applied tosuch services or leases.

§ 585.203 Failure to provide informa-tion.

(a) A person who fails to file a report,answer, documentary material, orother information required under thissubpart shall be liable to the UnitedStates Government for a civil penaltyof not more than $5,000 for each daythat the information is not provided.

(b) The Commission may, when thereis a failure to produce any informationordered produced under § 585.201, makeappropriate findings of fact and infer-ences, including the inference that con-ditions unfavorable to shipping in theforeign trade of the United States doexist.

Subpart C—ConditionsUnfavorable to Shipping

§ 585.301 Findings.For the purposes of this part, condi-

tions created by foreign governmentalaction or competitive methods of own-ers, operators, agents or masters of for-eign vessels are found unfavorable toshipping in the foreign trade of theUnited States, if such conditions:

(a) Impose upon vessels in the foreigntrade of the United States fees,charges, requirements, or restrictionsdifferent from those imposed on othervessels competing in the trade, or pre-clude vessels in the foreign trade of theUnited States from competing in thetrade on the same basis as any othervessel;

(b) Reserve substantial cargoes to thenational flag or other vessels and failto provide, on reasonable terms, for ef-fective and equal access to such cargoby vessels in the foreign trade of theUnited States;


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46 CFR Ch. IV (10–1–96 Edition)§ 585.401

(c) Are discriminatory or unfair asbetween carriers, shippers, exporters,importers, or ports or between export-ers from the United States and theirforeign competitors and which cannotbe justified under generally acceptedinternational agreements or practicesand which operate to the detriment ofthe foreign commerce or the public in-terest of the United States;

(d) Restrict or burden a carrier’sintermodal movements or shore-basedmaritime activities, including terminaloperations and cargo solicitation; for-warding and agency services; non-ves-sel-operating common carrier oper-ations; or other activities and servicesintegral to transportation systems; or

(e) Are otherwise unfavorable to ship-ping in the foreign trade of the UnitedStates.

Subpart D—Petitions for Section 19Relief

§ 585.401 Who may file.

Any person who has been harmed by,or who can reasonably expect harmfrom, existing or impending conditionsunfavorable to shipping in the foreigntrade of the United States, may file apetition for relief under the provisionsof this part.

§ 585.402 Filing of petitions.

All requests for relief from condi-tions unfavorable to shipping in theforeign trade shall be by written peti-tion. An original and fifteen copies of apetition for relief under the provisionsof this part shall be filed with the Sec-retary, Federal Maritime Commission,Washington, DC 20573.

§ 585.403 Contents of petitions.

Petitions for relief from conditionsunfavorable to shipping in the foreigntrade of the United States shall setforth the following:

(a) A concise description and citationof the foreign law, rule, regulation,practice or competitive method com-plained of;

(b) A certified copy of any law, rule,regulation or other document involvedand, if not in English, a certified Eng-lish translation thereof;

(c) Any other evidence of the exist-ence of such practice or competitivemethod;

(d) A clear description, in detail, ofthe harm already caused or which mayreasonably be expected to be caused pe-titioner, including:

(1) Statistics for the representativeperiod showing the type and amount ofrevenue loss or operating cost increasesuffered or projected, such as a presentor prospective cargo loss if harm is al-leged on that basis. Such statisticsshall include figures which permitcomparison or computation of the pro-portional effect of the harm alleged.For example, when the harm alleged isloss of cargo, supporting evidence shallinclude the total cargo carried or pro-jected in the trade for the period;

(2) Statistics or other evidence forthe representative period showing in-creased costs, inferior services or otherharm to cargo or other non-vessel in-terest if injury is claimed on thatbasis; and

(3) A statement as to why the periodis representative.

(e) A recommended regulation, thepromulgation of which will, in the viewof the petitioner, adjust or meet the al-leged conditions unfavorable to ship-ping in the foreign trade of the UnitedStates.

§ 585.404 Amendment or dismissal ofpetitions.

Upon the failure of a petitioner tocomply with the provisions of thispart, the petitioner will be notified bythe Secretary and afforded reasonableopportunity to amend its petition.Failure to timely amend the petitionmay result in its dismissal. For goodcause shown additional time foramendment may be granted.

Subpart E—Proceedings

§ 585.501 Participation of interestedpersons.

In the event that participation of in-terested persons is deemed necessaryby the Commission, notice will be pub-lished in the FEDERAL REGISTER and in-terested persons will then be allowed toparticipate in this proceeding by thesubmission of written data, views or


319


arguments, with or without oppor-tunity to present same orally.

§ 585.502 Discovery.The Commission may authorize a

party to a proceeding to use deposi-tions, written interrogatories, and dis-covery procedures that, to the extentpracticable, are in conformity with therules applicable in civil proceedings inthe district courts of the UnitedStates.

§ 585.503 Subpoenas.In proceedings under this part, the

Commission may by subpoena compelthe attendance of witnesses and theproduction of books, papers, docu-ments, and other evidence.

§ 585.504 Witness fees.In proceedings under this subpart,

witnesses are, unless otherwise prohib-ited by law, entitled to the same feesand mileage as in the courts of theUnited States, subject to funds beingprovided by appropriations Acts.

§ 585.505 Failure to supply informa-tion.

For failure to supply information or-dered to be produced or compelled bysubpoena in proceedings under thispart, the Commission may—

(a) After notice and an opportunityfor hearing, suspend tariffs of a com-mon carrier or that common carrier’sright to use the tariffs of conferencesof which it is a member; or

(b) Assess a civil penalty of not morethan $5,000 for each day that the infor-mation is not provided.

§ 585.506 Enforcement of orders.In proceedings under this part, when

a person violates an order of the Com-mission or fails to comply with a sub-poena, the Commission may seek en-forcement by a United States districtcourt having jurisdiction over the par-ties.

§ 585.507 Postponement, discontinu-ance, or suspension of action.

The Commission may, on its own mo-tion or upon petition, postpone, dis-continue, or suspend any and all ac-tions taken by it under the provisionsof this part. The Commission shall

postpone, discontinue or suspend anyor all such actions if the President in-forms the Commission that postpone-ment, discontinuance or suspension isrequired for reasons of foreign policy ornational security.

§ 585.508 Publication, content, and ef-fective date of regulation.

The Commission shall incorporate inany regulations adopted under therules of this part a concise statementof their basis and purpose. Regulationsshall be published in the FEDERAL REG-ISTER. Except where conditions war-rant and for good cause, regulationspromulgated under the rules of thispart shall not become effective until atleast 30 days after the date of publica-tion.

Subpart F—Corrective Actions

§ 585.601 Actions to correct unfavor-able conditions.

Upon submission of a petition filedunder the rules of this part, or upon itsown motion, the Commission may findthat conditions unfavorable to shippingin the foreign trade of the UnitedStates do exist, and may, without fur-ther proceedings, issue regulationswhich may:

(a) Impose equalizing fees or charges;(b) Limit sailings to and from United

States ports or the amount or type ofcargo carried;

(c) Suspend, in whole or in part, tar-iffs filed with the Commission for car-riage to or from United States ports,including a common carrier’s right touse tariffs of conferences in UnitedStates trades of which it is a memberfor any period the Commission speci-fies;

(d) Suspend, in whole or in part, anocean common carrier’s right to oper-ate under an agreement, including anyagreement authorizing preferentialtreatment at terminals or preferentialterminal leases, whether filed with theCommission or not filed with the Com-mission pursuant to the exemptionsgranted in 46 CFR Part 572; or anyagreement filed with the Commissionauthorizing space chartering, or pool-ing of cargo or revenues with otherocean common carriers;


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46 CFR Ch. IV (10–1–96 Edition)§ 585.602

(e) Impose a fee, not to exceed$1,000,000 per voyage;

(f) Request the collector of customsat the port or place of destination inthe United States to refuse the clear-ance required by section 4197 of the Re-vised Statutes, 46 U.S.C. app. 91, to avessel of a foreign carrier which is orwhose government is identified as con-tributing to the unfavorable conditionsdescribed in subpart C;

(g) Request the collector of customsat the port or place of destination inthe United States to collect any feesimposed by the Commission underparagraph (e) of this section;

(h) Request the Secretary of the de-partment in which the Coast Guard isoperating to deny entry, for purposesof oceanborne trade, of any vessel of aforeign carrier which is or whose gov-ernment is identified as contributingto the unfavorable conditions describedin subpart C, to any port or place inthe United States or the navigable wa-ters of the United States, or to detainany such vessel at the port or place inthe United States from which it isabout to depart for any other port orplace in the United States; or

(i) Take any other action the Com-mission finds necessary and appro-priate to adjust or meet any conditionunfavorable to shipping in the foreigntrade of the United States.

§ 585.602 Penalty.

A common carrier that accepts orhandles cargo for carriage under a tar-iff that has been suspended under§ 585.505 or § 585.601 of this part, or afterits right to use another tariff has beensuspended under those sections, is sub-ject to a civil penalty of not more than$50,000 for each day that it is found tobe operating under a suspended tariff.

PART 586—ACTIONS TO ADJUST ORMEET CONDITIONS UNFAVOR-ABLE TO SHIPPING IN THE U.S.FOREIGN TRADE

Sec.586.1 Actions to adjust or meet conditions

unfavorable to shipping in specifictrades.

586.3 Conditions unfavorable to shipping inthe United States/Ecuador Trade.

AUTHORITY: 46 U.S.C. app. 876(1)(b); 46U.S.C. app. 876(5) through (12); 46 CFR part585; Reorganization Plan No. 7 of 1961, 26 FR7315 (August 12, 1961).

§ 586.1 Actions to adjust or meet condi-tions unfavorable to shipping inspecific trades.

Whenever the Commission deter-mines that conditions unfavorable toshipping exist in the United States for-eign trade with any nation and issuesrules to adjust or meet such condi-tions, pursuant to section 19(1)(b) ofthe Merchant Marine Act, 1920, 46U.S.C. app. 876(1)(b) and 46 CFR part585, such rules shall be published in theFEDERAL REGISTER and added to thispart.

[55 FR 2076, Jan. 22, 1990]

§ 586.3 Conditions unfavorable to ship-ping in the United States/Ecuadortrade.

(a) Conditions unfavorable to shipping.(1) The Federal Maritime Commissionhas determined that the Government ofEcuador (‘‘GOE’’) has created condi-tions unfavorable to shipping in theforeign trade of the United States byenacting, implementing and enforcinglaws, decrees and regulations which un-reasonably restrict non-Ecuadorian-flag carriers from competing in the liq-uid bulk trade from the United Statesto Ecuador on the same basis as Ecua-dorian-flag carriers.

(2) Resolution No. 012/87 unilaterallyreserves export liquid bulk cargoesfrom the United States to Ecuador forcarriage by Ecuadorian-flag carrierswho utilize Ecuadorian-flag vessels orcharter third-flag vessels, or U.S.-flagcarriers who utilize U.S.-flag vessels.The enforcement of this system dis-criminates against U.S. carriers andother maritime companies desirous ofparticipating in this Trade through thecharter of third-flag vessels, and deniesto non-Ecuadorian-flag carriers effec-tive and equal access to liquid bulkcargoes in the Trade. It also discrimi-nates against U.S. shippers and export-ers whose opportunities to select a car-rier of their choice are restricted andwhose ability to compete in inter-national markets is hampered.

(b) Ecuadorian-flag carrier—assessmentof fees. (1) Voyage, for purposes of this


321


section means an outbound movementfrom the United States to a foreigncountry by a vessel engaged in theUnited States trade. Each outboundmovement constitutes a separate voy-age. The transportation of cargo bywater aboard a single outbound vesselbetween ports in the United States andports in Ecuador under one or morebills of lading issued by or on behalf ofthe Ecuadorian-flag carrier MaritimaTransligra, S.A. (‘‘Transligra’’), wheth-er on board vessels owned or operatedby Transligra or in space chartered byTransligra in vessels owned or operatedby others shall be deemed to constitutea voyage.

(2) For each voyage completed afterthe effective date of this section,Transligra shall pay to the FederalMaritime Commission a fee in theamount of $50,000. The fee for each voy-age shall be paid by certified or cash-iers check made payable to the FederalMaritime Commission within 14 cal-endar days of the completion of thevoyage for which it is assessed.

(c) Report. Transligra shall file withthe Federal Maritime Commission a re-port setting forth the names of vesselsoperated by Transligra in the Trade,whether owned or chartered; the namesof vessels on which Transligra haschartered space for the carriage ofcargo in the Trade, and the names andaddresses of the owners of such vessels;the date of each voyage completed inthe Trade; the amount of cargo carried;and the amount of fees assessed pursu-ant to paragraph (b)(2) of this sectionduring the preceding calendar quarter.Each such report shall include a cer-tification that all applicable fees as-sessed pursuant to paragraph (b)(2) ofthis section have been paid, and shallbe executed by the Chief Executive Of-ficer under oath. Each report shall befiled within 15 days of the end of theapplicable calendar quarter.

(d) Refusal of Clearance by the Collec-tor of Customs. If Transligra shall failto pay any fee assessed by paragraph(b)(2) of this section, or fail to file anyquarterly report required by paragraph(c) of this section within the prescribedperiod for filing, the Secretary of theCommission shall request the Chief,Carrier Rulings Branch of the U.S. Cus-toms Service to direct the collectors of

customs at ports in the U.S. Gulf ofMexico to refuse the clearance requiredby section 4197 of the Revised Statutes(46 U.S.C. app. 91) to any vessel ownedor operated by Transligra.

[55 FR 2076, Jan. 22, 1990]

PART 587—ACTIONS TO ADDRESSCONDITIONS UNDULY IMPAIRINGACCESS OF U.S.-FLAG VESSELSTO OCEAN TRADE BETWEEN FOR-EIGN PORTS

Sec.587.1 Purpose; general provisions.587.2 Factors indicating conditions unduly

impairing access.587.3 Petitions for relief.587.4 Proceeding.587.5 Receipt of relevant information.587.6 Notification to Secretary of State.587.7 Decision; sanctions; effective date.587.8 Submission of decision to the Presi-

dent.587.9 Postponement, discontinuance, or sus-

pension of action.

AUTHORITY: 5 U.S.C. 553; secs. 13(b)(5), 15and 17 of the Shipping Act of 1984, 46 U.S.C.app. 1712(b)(5), 1714, and 1716; sec. 10002 of theForeign Shipping Practices Act of 1988 (46U.S.C. app. 1710a).


NOTE: In accordance with 44 U.S.C.3518(c)(1)(B), and except for investigationsundertaken with reference to a category ofindividuals or entities (e.g., an entire indus-try), any information request or requirementin this part is not subject to the require-ments of section 3507(f) of the Paperwork Re-duction Act because such collection of infor-mation is pursuant to a civil, administrativeaction or investigation by an agency of theUnited States against specific individuals orentities.

§ 587.1 Purpose; general provisions.(a)(1) It is the purpose of this part to

enumerate certain conditions resultingfrom the action of a common carrier,acting alone or in concert with anyperson, or a foreign government, whichunduly impair the access of a vesseldocumented under the laws of the Unit-ed States whether liner, bulk, tramp orother vessel, (hereinafter U.S. flag ves-sel) to ocean trade between foreignports, which includes intermodal move-ments, and to establish procedures bywhich the owner or operator of a U.S.flag vessel hereinafter U.S. flag carrier)


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46 CFR Ch. IV (10–1–96 Edition)§ 587.2

may petition the Federal MaritimeCommission for relief under the au-thority of section 13(b)(5) of the Ship-ping Act of 1984 (the Act) (46 U.S.C. app.1712(b)(5)).

(2) It is the further purpose of thispart to indicate the general cir-cumstances under which the authoritygranted to the Commission under sec-tion 13(b)(5) may be invoked, and thenature of the subsequent actions con-templated by the Commission.

(3) This part also furthers the goalsof the Act with respect to encouragingthe development of an economicallysound and efficient U.S. flag liner fleetas stated in section 2 of the Act (46U.S.C. app. 1701).

(b)(1) This part implements the stat-utory notice and hearing requirementand ensures that due process is af-forded to all affected parties. At thesame time, it allows for flexibility instructuring proceedings so that theCommission may act expeditiouslywhenever harm to a U.S. flag carrierresulting from impaired access to crosstrades has been demonstrated or is im-minent.

(2) The provisions of part 502 of thischapter (Rules of Practice and Proce-dure) shall not apply to this part ex-cept for those provisions governing exparte contacts (§ 502.11 of this chapter)and service of documents and copies ofdocuments (§§ 502.114(b) and 502.118 ofthis chapter, and except as the Com-mission may otherwise determine byorder.

(c) The condition of unduly impairedaccess will be found only where a U.S.flag carrier is commercially able toenter a trade in which its access isbeing unduly impaired, or is reasonablyexpected to be impaired, or where ac-tual participation in a trade by a U.S.flag carrier is being restricted for rea-sons other than its commercial abilityor competitiveness.

(d) In examining conditions in atrade between foreign ports, and inconsidering appropriate action, theCommission will give due regard toU.S. maritime policy and U.S. Govern-ment shipping arrangements withother nations, as well as the degree ofreciprocal access afforded in U.S. for-eign trades to the carriers of the coun-

tries against whom Commission actionis contemplated.


§ 587.2 Factors indicating conditionsunduly impairing access.

For the purpose of this part, factorswhich would indicate the existence ofconditions created by foreign govern-ment action or action of a commoncarrier acting alone or in concert withany person, which unduly impair ac-cess of a U.S. flag vessel engaged in orseeking access to ocean trade betweenforeign ports, include, but are not lim-ited to:

(a) Imposition upon U.S. flag vesselsor upon shippers or consignees usingsuch vessels, of fees, charges, require-ments, or restrictions different fromthose imposed on national-flag or othervessels, or which preclude or tend topreclude U.S. flag vessels from compet-ing in the trade on the same basis asany other vessel.

(b) Reservation of a substantial por-tion of the total cargo in the trade tonational-flag or other vessels which re-sults in failure to provide reasonablecompetitive access to cargoes by U.S.flag vessels.

(c) Use of predatory practices, pos-sibly including but not limited toclosed conferences employing fightingships or deferred rebates, which undulyimpair access of a U.S. flag vessel tothe trade.

(d) Any government or commercialpractice that results in, or may resultin, unequal and unfair opportunity forU.S. flag vessel access to port or inter-modal facilities or services related tothe carriage of cargo inland to or fromports in the trade.

(e) Any other practice which undulyimpairs access of a U.S. flag vessel totrade between foreign ports.

§ 587.3 Petitions for relief.

(a) Filing. (1) Any owner or operatorof a liner, bulk, tramp or other vesseldocumented under the laws of the Unit-ed States who believes that its accessto ocean trade between foreign portshas been, or will be, unduly impairedmay file a written petition for reliefunder the provisions of this part.


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(2) An original and fifteen copies ofsuch a petition including any support-ing documents shall be filed with theSecretary, Federal Maritime Commis-sion, Washington, DC 20573.

(b) Contents. Petitions for relief shallinclude the following and shall also in-clude an affidavit attesting to thetruth and accuracy of the informationsubmitted:

(1) The name and address of the peti-tioner;

(2) The name and address of eachparty (foreign government, agency orinstrumentality thereof, carrier, orother person) against whom the peti-tion is made and a statement as towhether the party is a foreign govern-ment, agency or instrumentality there-of;

(3) A concise description and citationof the foreign law, rule or governmentor commercial practice complained of;

(4) A certified copy of any law, rule,regulation or other document con-cerned, when available and, if not inEnglish, a certified English translationthereof;

(5) Any other information relating toany law, rule or regulation, or indicat-ing the existence of any government orcommerical practice;

(6) A description of the service of-fered or proposed, as a result of whichpetitioner is alleging harm, includinginformation which indicates the abilityof the petitioner to otherwise partici-pate in the trade;

(7) A clear description, in detail, ofthe harm already caused, or which mayreasonably be expected to be caused, tothe petitioner for a representative pe-riod, including:

(i) Statistics documenting present orprospective cargo loss due to discrimi-natory government or commercialpractices if harm is alleged on thatbasis; such statistics shall include fig-ures for the total cargo carried or pro-jected to be carried by petitioner in thetrade for the period, and the sources ofthe statistics;

(ii) Information documenting howthe petitioner is being prevented fromentering a trade, if injury is claimed onthat basis;

(iii) Statistics or other informationdocumenting the impact of discrimina-tory government or commercial prac-

tices resulting in an increase in costs,service restrictions, or other harm onthe basis of which injury is claimed,and the sources of the statistics; and

(iv) A statement as to why the periodis representative.

(8) A separate memorandum of law ora discussion of the relevant legal is-sues.

(9) A recommended action, rule orregulation, the result of which will, inthe view of the petitioner, address thealleged conditions unduly impairingthe access of petitioner to the affectedtrade.

(c) Deficient petition. A petition whichsubstantially fails to comply with therequirements of paragraph (b) of thissection shall be rejected and the personfiling the petition shall be notified ofthe reasons for such rejection. Rejec-tion is without prejudice to filing of anamended petition.

§ 587.4 Proceeding.

(a) Upon the Commission’s own mo-tion or upon the filing of a petitionwhich meets the requirements of § 587.3,when there are indications that condi-tions unduly imparing the access of aU.S. flag vessel to trade between for-eign ports may exist, the Commissionwill institute a proceeding pursuant tothis part.

(b)(1) Notice of the institution of anysuch proceeding will be published inthe FEDERAL REGISTER, and that noticeand petition, if any, will be served onthe parties.

(2) Interested or adversely affectedpersons will be allowed a period of timeto reply to the petition by the submis-sion of written data, views or legal ar-guments pursuant to § 587.5 of this part.Factual submissions shall be in affida-vit form.

(3) An original and 15 copies of suchsubmissions will be filed with the Sec-retary, Federal Maritime Commission,Washington, DC 20573.

(c) Following the close of the initialresponse period, the Commission mayissue a decision or order further hear-ings if warranted. If further hearingsare ordered, they will be conductedpursuant to procedures to be outlinedby the Commission in its order.


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46 CFR Ch. IV (10–1–96 Edition)§ 587.5

§ 587.5 Receipt of relevant informa-tion.

(a) In making its decision on mattersarising under section 13(b)(5) of theAct, the Commission may receive andconsider relevant information from anyowner, operator, or conference in an af-fected trade, or from any foreign gov-ernment, either directly or through theDepartment of State or from any otherreliable source. All such submissionsshould be supported by affidavits offact and memorandum of law. Relevantinformation may include, but is notlimited to:

(1) Statistics, with sources, or, if un-available, the best estimates pertain-ing to:

(i) The total cargo carried in the af-fected liner or bulk trade by type,source, value, tonnage and direction.

(ii) Cargo carried in the affectedtrade on vessels owned or operated byany person or conference, by type,source, value, tonnage and direction.

(iii) The percentage such cargo car-ried is of the total affected liner orbulk trade, on a tonnage and valuebasis.

(iv) The amount of cargo reserved bya foreign government for national-flagor other vessels in the affected trade,on a tonnage and value basis, and alisting of the types of cargo and spe-cific commodities which are reservedfor national-flag or other vessels.

(2) Information on the operations ofvessels of any party serving the af-fected trade, including sailings to andfrom ports in the trade, taxes or othercharges paid to foreign authorities, andsubsidies or other payments receivedfrom foreign authorities.

(3) Information clarifiying the mean-ing of the foreign law, rule, regulationor practice complained of, and a de-scription of its implementation.

(4) Complete copies of all conferenceand other agreements, includingamendments and related documents,which apply in the trade.

(b) Once introduced or adduced, infor-mation of the character described inparagraph (a) of this section, and peti-tions and responses thereto, shall bemade part of the record for decisionand may provide the basis for Commis-sion findings of fact and conclusions of

law, and for the imposition of sanc-tions under the Act and this part.

§ 587.6 Notification to Secretary ofState.

When there are indications that con-ditions unduly impairing the access ofa U.S. flag vessel to trade between for-eign ports may exist, the Commissionshall so notify the Secretary of Stateand may request that the Secretary ofState seek resolution of the matterthrough diplomatic channels. If requestis made, the Commission will giveevery assistance in such efforts, andthe Commission may request the Sec-retary to report the results of such ef-forts within a specified time period.

§ 587.7 Decision; sanctions; effectivedate.

(a) Upon completion of any proceed-ing conducted under this part, theCommission will issue and serve a deci-sion on all parties.

(b) If the Commission finds that con-ditions unduly impairing access of aU.S. flag vessel to ocean trade betweenforeign ports exist, any of the followingactions may be taken:

(1) Imposition of equalizing fees orcharges applied in the foreign trade ofthe United States;

(2) Limitations on sailings to andfrom United States ports or on theamount or type of cargo carried;

(3)(i) Suspension, in whole or in part,of any or all tariffs filed with the Com-mission for carriage to or from UnitedStates ports, including the carrier’sright to use any or all tariffs of con-ferences in U.S. trades of which it is amember for any period the Commissionspecifies, or until such time asunimpaired access is secured for U.S.flag carriers in the affected trade.

(ii) Acceptance or handling of cargofor carriage under a tariff that hasbeen suspended, or after a common car-rier’s right to utilize that tariff hasbeen suspended pursuant to this part,will subject a carrier to the impositionof a civil penalty as provided under theAct (46 U.S.C. app. 1712(b)(3)) of notmore than $50,000 per shipment; and

(4) Suspension, in whole or in part, ofthe right of an ocean common carrierto operate under any agreement filed


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with the Commission, including agree-ments authorizing preferential treat-ment at terminals, preferential termi-nal leases, space chartering, or poolingof cargo or revenues with other oceancommon carriers;

(5) Imposition of a charge not to ex-ceed $1,000,000 per inbound or outboundmovement between a foreign countryand the United States by a vessel en-gaged in the United States oceanbornetrade;

(6) A request to the collector of cus-toms at any port or place of destina-tion in the United States to refuse theclearance required by section 4197 ofthe Revised Statutes, 46 U.S.C. app. 91,to any vessel of a foreign carrier whichis or whose government is identified ascontributing to the conditions de-scribed in § 587.2 of this part;

(7) A request to the Secretary of thedepartment in which the Coast Guardis operating to deny entry, for purposesof oceanborne trade, of any vessel of aforeign carrier which is or whose gov-ernment is identified as contributingto the conditions described in § 587.2 ofthis part to any port or place in theUnited States or the navigable watersof the United States, or to detain anysuch vessel at the port or place in theUnited States from which it is about todepart for any other port or place inthe United States; and

(8) Any other action the Commissionfinds necessary and appropriate to ad-dress conditions unduly impairing ac-cess of a U.S.-flag vessel to trade be-tween foreign ports.

(c) If the Commission finds that con-ditions impairing access of a U.S. flagvessel to ocean trade between foreignports has not yet occurred, and puni-tive sanctions are warranted, suchsanctions will be imposed to become ef-fective simultaneously with the imple-mentation of the action that would un-duly impair the access of a U.S. flagvessel.

(d)(1) All decisions will be publishedin the FEDERAL REGISTER.

(2) Decisions imposing sanctions, ex-cept where conditions warrant and forgood cause, will become effective 30days after the date of publication.

(e) Any party may file a petition toreconsider any decision under thispart. Such a petition shall be served on

all other parties to the proceeding andshall not, in and of itself, stay the ef-fective date of the Commission action.


§ 587.8 Submission of decision to thePresident.

Concurrently with the submission ofany decision imposing sanctions to theFEDERAL REGISTER pursuant to§ 587.7(d)(1), the Commission shalltransmit that decision to the Presidentof the United States who may, withinten days after receiving the decision,disapprove it if the President finds thatdisapproval is required for reasons ofthe national defense or the foreign pol-icy of the United States.

§ 587.9 Postponement, discontinuance,or suspension of action.

(a) The Commission may, on its ownmotion or upon a petition, postpone,discontinue, or suspend any actiontaken by it under the provisions of thispart. Such a petition will be served onall other parties and will not, in and ofitself, stay the effective date of Com-mission action.

(b) The Commission shall postpone,discontinue or suspend any action pro-vided for in its final decision if so di-rected by the President for reasons ofnational defense or foreign policy ofthe United States as provided in § 587.8.

PART 588—ACTIONS TO ADDRESSADVERSE CONDITIONS AFFECT-ING U.S.–FLAG CARRIERS THATDO NOT EXIST FOR FOREIGNCARRIERS IN THE UNITED STATES

Sec.588.1 Purpose.588.2 Definitions.588.3 Scope.588.4 Petitions.588.5 Investigations.588.6 Information demands and subpoenas.588.7 Notification to Secretary of State.588.8 Action against foreign carriers.

AUTHORITY: 5 U.S.C. 553; sec. 10002 of theForeign Shipping Practices Act of 1988 (46U.S.C. app. 1710a).

SOURCE: 54 FR 11533, Mar. 21, 1989, unlessotherwise noted.


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46 CFR Ch. IV (10–1–96 Edition)§ 588.1

§ 588.1 Purpose.It is the purpose of the regulations of

this part to establish procedures to im-plement the Foreign Shipping Prac-tices Act of 1988, which authorizes theCommission to take action against for-eign carriers, whose practices or whosegovernment’s practices result in ad-verse conditions affecting the oper-ations of United States carriers, whichadverse conditions do not exist forthose foreign carriers in the UnitedStates. The regulations of this partprovide procedures for investigatingsuch practices and for obtaining infor-mation relevant to the investigations,and also afford notice of the types ofactions included among those that theCommission is authorized to take.

§ 588.2 Definitions.For the purposes of this part:(a) Common carrier, marine terminal op-

erator, non-vessel-operating common car-rier, ocean common carrier, person, ship-per, shippers’ association, and UnitedStates have the meanings given eachsuch term, respectively, in section 3 ofthe Shipping Act of 1984 (46 U.S.C. app.1702);

(b) Foreign carrier means an oceancommon carrier a majority of whosevessels are documented under the lawsof a country other than the UnitedStates;

(c) Maritime services means port-to-port carrier of cargo by the vessels op-erated by ocean common carriers;

(d) Maritime-related services meansintermodal operations, terminal oper-ations, cargo solicitation, forwardingand agency services, non-vessel-operat-ing common carrier operations, and allother activities and services integral tototal transportation systems of oceancommon carriers and their foreigndomiciled affiliates on their own andothers’ behalf;

(e) United States carrier means anocean common carrier which operatesvessels documented under the laws ofthe United States;

(f) United States oceanborne trademeans the carriage of cargo betweenthe United States and a foreign coun-try, whether direct or indirect, by anocean common carrier;

(g) Voyage means an inbound or out-bound movement between a foreign

country and the United States by avessel engaged in the United Statesoceanborne trade. Each inbound or out-bound movement constitutes a sepa-rate voyage.

§ 588.3 Scope.The Commission shall take such ac-

tion under this part as it considers nec-essary and appropriate when it deter-mines that any laws, rules, regula-tions, policies, or practices of foreigngovernments, or any practices of for-eign carriers or other persons providingmaritime or maritime-related servicesin a foreign country, result in condi-tions that adversely affect the oper-ations of United States carriers inUnited States oceanborne trade, and donot exist for foreign carriers of thatcountry in the United States under thelaws of the United States or as a resultof acts of United States carriers orother persons providing maritime ormaritime-related services in the Unit-ed States.

§ 588.4 Petitions.(a) A petition for investigation to de-

termine the existence of adverse condi-tions as described in § 588.3 may be sub-mitted by any person, including anycommon carrier, shipper, shippers’ as-sociation, ocean freight forwarder, ormarine terminal operator, or anybranch, department, agency, or othercomponent of the Government of theUnited States. Petitions for reliefunder this part shall be in writing, andfiled in the form of an original and fif-teen copies with the Secretary, FederalMaritime Commission, Washington, DC20573.

(b) Petitions shall set forth the fol-lowing:

(1) The name and address of the peti-tioner;

(2) The name and address of eachparty (foreign government, agency orinstrumentality thereof, carrier, orother person) against whom the peti-tion is made, a statement as to wheth-er the party is a foreign government,agency or instrumentality thereof, anda brief statement describing the par-ty’s function, business or operation;

(3) The name and address of eachUnited States carrier alleged to be ad-versely affected, and a description, and


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if possible, documentation, of why eachis considered by petitioner to be aUnited States carrier;

(4) A precise description and, if appli-cable, citation of any law, rule, regula-tion, policy or practice of a foreigngovernment or practice of a foreigncarrier or other person causing theconditions complained of;

(5) A certified copy of any law, rule,regulation or other document involvedand, if not in English, a certified Eng-lish translation thereof;

(6) Any other evidence of the exist-ence of such laws and practices, evi-dence of the alleged adverse effects onthe operations of United States car-riers in United States oceanbornetrade, and evidence that foreign car-riers of the country involved are notsubjected to similar adverse conditionsin the United States.

(7) With respect to the harm alreadycaused, or which may reasonably be ex-pected to be caused, the following in-formation, if available to petitioner:

(i) Statistical data documentingpresent or prospective cargo loss byUnited States carriers due to foreigngovernment or commercial practicesfor a representative period, if harm isalleged on that basis, and the sourcesof the statistical data;

(ii) Statistical data or other informa-tion documenting the impact of theforeign government or commercialpractices causing the conditions com-plained of, and the sources of thosedata; and

(iii) A statement as to why the periodused is representative.

(8) A separate memorandum of law ora discussion of the relevant legal is-sues; and

(9) A recommended action, includingany of those enumerated in § 588.8, theresult of which will, in the view of thepetitioner, address the conditions com-plained of.

(c) A petition which the Commissiondetermines fails to comply substan-tially with the requirements of para-graph (b) of this section shall be re-jected promptly and the person filingthe petition shall be notified of thereasons for such rejection. Rejection iswithout prejudice to filing of anamended petition.

§ 588.5 Investigations.

(a) An investigation to determine theexistence of adverse conditions as de-scribed in § 588.3 may be initiated bythe Commission on its own motion oron the petition of any person pursuantto § 588.4. An investigation shall be con-sidered to have been initiated for thepurpose of the time limits imposed bythe Foreign Shipping Practices Act of1988 upon the publication in the FED-ERAL REGISTER of the Commission’s no-tice of investigation, which shall an-nounce the initiation of the proceedingupon either the Commission’s own mo-tion or the filing of a petition.

(b) The provisions of part 502 of thischapter (Rules of Practice and Proce-dure) shall not apply to this part ex-cept for those provisions governing exparte contacts (§ 502.11 of this chapter)and except as the Commission mayotherwise determine by order. The pre-cise procedures and timetables for par-ticipation in investigations initiatedunder this part will be established onan ad hoc basis as appropriate and setforth in the notice. Proceedings mayinclude oral evidentiary hearings, butonly when the Commission determinesthat there are likely to be genuine is-sues of material fact that cannot be re-solved on the basis of written submis-sions, or that the nature of the matterin issue is such that an oral hearingand cross-examination are necessaryfor the development of an adequaterecord. In any event, investigationsinitiated under this part shall proceedexpeditiously, consistent with dueprocess, to conform with the time lim-its specified in the Foreign ShippingPractices Act and to identify promptlythe conditions described in § 588.3 ofthis part.

(c) Upon initiation of an investiga-tion, interested persons will be giventhe opportunity to participate in theproceeding pursuant to the proceduresset forth in the notice. Submissionsfiled in response to a notice of inves-tigation may include written data andstatistics, views, and legal arguments.Factual information submitted shall becertified under oath. An original and 15copies of such submissions will be filedwith the Secretary, Federal MaritimeCommission, Washington, DC 20573.


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46 CFR Ch. IV (10–1–96 Edition)§ 588.6

Persons who receive information re-quests from the Commission pursuantto § 588.6 of this part are not precludedfrom filing additional voluntary sub-missions in accordance with this para-graph.

(d) An investigation shall be com-pleted and a decision rendered within120 days after it has commenced as de-fined in paragraph (a) of this section,unless the Commission determines thatan additional 90-day period is necessaryin order to obtain sufficient informa-tion on which to render a decision.When the Commission determines toextend the investigation period for anadditional 90 days, it shall issue a no-tice clearly stating the reasons there-for.

§ 588.6 Information demands and sub-poenas.

(a) In furtherance of this part, theCommission may, by order, require anyperson (including any common carrier,shipper, shipper’s association, oceanfreight forwarder, or marine terminaloperator, or any officer, receiver, trust-ee, lessee, agent or employee thereof)to file with the Commission any peri-odic or special report, answers to ques-tions, documentary material, or otherinformation which the Commissionconsiders necessary or appropriate, andin the form and within the time pre-scribed by the Commission. Responsesto such orders may be required by theCommission to be made under oath.

(b) The Commission may issue sub-poenas to compel the attendance andtestimony of witnesses and the produc-tion of records or other evidence as itdeems necessary and appropriate inconducting an investigation under§ 588.5 of this part.

(c) The Commission may, in its dis-cretion, determine that any informa-tion submitted to it in response to a re-quest (including a subpoena) under thissection, or accompanying a petitionunder § 588.4, or voluntarily submittedby any person pursuant to § 588.5(c),shall not be disclosed to the public. Tothis end, persons submitting informa-tion for consideration in a proceedingor investigation under this part mayindicate in writing any factors theywish the Commission to consider rel-evant to a decision on confidentiality

under this section; however, such infor-mation will be advisory only, and theactual determination will be made bythe Commission. In the event that a re-quest for confidentiality is not accom-modated, the person making the re-quest will be so advised before any dis-closure occurs.

§ 588.7 Notification to Secretary ofState.

Upon the publication of a petition inthe FEDERAL REGISTER, or on its ownmotion should it determine to initiatean investigation pursuant to § 588.5, theCommission will notify the Secretaryof State of same, and may request ac-tion to seek resolution of the matterthrough diplomatic channels. The Com-mission may request the Secretary toreport the results of such efforts at aspecified time.

§ 588.8 Action against foreign carriers.

(a) Whenever, after notice and oppor-tunity for comment or hearing, theCommssion determines that the condi-tions specified in § 588.3 of this partexist, the Commission shall take suchaction as it considers necessary and ap-propriate against any foreign carrierwhich it identifies as a contributingcause to, or whose government is acontributing cause to, such conditions,in order to offset such conditions. Suchaction may include, but is not limitedto:

(1) Limitations on sailings to andfrom United States ports or on theamount or type of cargo carried;

(2) Suspension, in whole or in part, ofany or all tariffs filed with the Com-mission, including the right of anocean common carrier to use any or alltariffs of conferences in United Statestrades of which it is a member for suchperiod as the Commission specifies;

(3) Suspension, in whole or in part, ofthe right of an ocean common carrierto operate under any agreement filedwith the Commission, including agree-ments authorizing preferential treat-ment at terminals, preferential termi-nal leases, space chartering, or poolingof cargo or revenues with other oceancommon carriers;

(4) Imposition of a charge, not to ex-ceed $1,000,000 per voyage;


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(5) A request to the collector of cus-toms at any port or place of destina-tion in the United States to refuse theclearance required by section 4197 ofthe Revised Statutes, 46 U.S.C. app. 91,to any vessel of a foreign carrier thatis identified by the Commission underthis section;

(6) A request to the Secretary of thedepartment in which the Coast Guardis operating to deny entry, for purposesof oceanborne trade, of any vessel of aforeign carrier that is identified by theCommission under this section to anyport or place in the United States orthe navigable waters of the UnitedStates, or to detain any such vessel atthe port or place in the United Statesfrom which it is about to depart forany other port or place in the UnitedStates; and

(7) Any other action the Commissionfinds necessary and appropriate to ad-

dress adverse foreign shipping prac-tices as described in § 588.3 of this part.

(b) The Commission may consultwith, seek the cooperation of, or makerecommendations to other appropriateU.S. Government agencies prior to tak-ing any action under this action.

(c) Before any action against foreigncarriers under this section becomes ef-fective or a request under this sectionis made, the Commission’s determina-tion as to adverse conditions and itsproposed actions and/or requests shallbe submitted immediately to the Presi-dent. Such actions will not become ef-fective nor requests made if, within 10days of receipt of the Commission’s de-termination and proposal, the Presi-dent disapproves it in writing, settingforth the reasons for the disapproval, ifthe President finds that disapproval isrequired for reasons of the national de-fense or the foreign policy of the Unit-ed States.
