[Federal Register Volume 78, Number 105 (Friday, May 31, 2013)]
[Proposed Rules]
[Pages 32945-32978]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-12429]



[[Page 32945]]

Vol. 78

Friday,

No. 105

May 31, 2013

Part IV





Federal Maritime Commission





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46 CFR Part 515





Amendments to Regulations Governing Ocean Transportation Intermediary 
Licensing and Financial Responsibility Requirements, and General 
Duties; Proposed Rule

Federal Register / Vol. 78 , No. 105 / Friday, May 31, 2013 / 
Proposed Rules

[[Page 32946]]


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FEDERAL MARITIME COMMISSION

46 CFR Part 515

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


Amendments to Regulations Governing Ocean Transportation 
Intermediary Licensing and Financial Responsibility Requirements, and 
General Duties

AGENCY: Federal Maritime Commission.

ACTION: Advanced Notice of Proposed Rulemaking.

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

DATES: Comments are due on or before July 31, 2013.

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

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

SUPPLEMENTARY INFORMATION: 

Submit Comments

    Non-confidential Comments and Information. For non-confidential 
comments submit an original and five (5) paper copies, and if possible, 
send a PDF of the document by email to secretary@fmc.gov. Include in 
the subject line: Docket No. 13-05, Comments on Ocean Transportation 
Intermediary Regulation Revisions.
    Confidential Comments and Information. Confidential filings must be 
submitted in the traditional manner on paper, rather than by email. 
Comments and information that are submitted for confidential treatment 
must be submitted by mail or courier. Confidential filings must be 
accompanied by a transmittal letter that identifies the filing as 
``confidential'' and describes the nature and extent of the 
confidential treatment requested. Responses to this request that 
contain confidential information must consist of (1) the complete 
filing and (2) be marked by the filer as ``Confidential-Restricted,'' 
with the confidential material clearly marked on each page. When a 
confidential filing is submitted, an original and one additional copy 
of the public version of the filing must be submitted. The public 
version of the filing should exclude confidential materials, and be 
clearly marked on each affected page, ``confidential materials 
excluded.'' The Federal Maritime Commission (FMC or Commission) will 
provide confidential treatment to the extent allowed by law for those 
submissions, or parts of submissions, for which the parties request 
confidentiality.
    Questions regarding filing or treatment of confidential responses 
to this Advance Notice of Proposed Rulemaking (ANPR) should be directed 
to the Commission's Secretary, Karen V. Gregory, at the telephone 
number or email provided above.

Background

    In 1998, Congress passed the Ocean Shipping Reform Act (OSRA), 
Public Law 105-258, 112 Stat. 1902, amending the Shipping Act of 1984 
in several respects relating to ocean freight forwarders (OFFs) and 
non-vessel-operating common carriers (NVOCCs), defining both as ocean 
transportation intermediaries (OTIs). The Commission thereafter adopted 
new regulations at 46 CFR part 515 to implement changes effectuated by 
OSRA. Licensing, Financial Responsibility Requirements, and General 
Duties for Ocean Transportation Intermediaries, 28 SRR 629-654 (March 
8, 1999). (Docket No. 98-28 Final Rule).
    The Commission now proposes significant modifications to Part 515 
for a variety of purposes, including addressing changes in industry 
conditions, streamlining internal processes, improving transparency, 
and removing unwarranted regulatory burdens. These changes reflect the 
Commission's experience in implementing the current regulations and 
address issues and questions that have arisen over time. The proposed 
rules also reflect recommendations adopted by the Commission in the 
Final Report for Fact Finding Investigation No. 27, Potentially 
Unlawful, Unfair or Deceptive Ocean Transportation Practices Related to 
the Movement of Household Goods or Personal Property in U.S.-Foreign 
Oceanborne Trades,\1\ (Fact Finding 27 or Fact Finding 27 Final Report) 
and the Commission's grant of the petition for a declaratory order in 
Docket No. 06-08, In the Matter of the Lawfulness of Unlicensed Persons 
Acting as Agents for Licensed Ocean Transportation Intermediaries, 31 
SRR 1058 (2009). Significant proposed changes are discussed below.
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    \1\ http://www.fmc.gov/assets/1/Documents/Fact%20Finding%2027%20Report.pdf.
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Subpart A--General

Section 515.2--Definitions

    The Commission proposes to remove several definitions that are no 
longer relevant to the Commission's regulatory activities, including 
``ocean freight broker'' (Sec.  515.2(n)), ``brokerage'' (Sec.  
515.2(d)) and ``small shipment'' (Sec.  515.2(u)). The definition of 
``Shipping Act'' (Sec.  515.2(u)) is substituted for the definition of 
``Act'' (Sec.  515.2(a)) in light of the provisions of the Ocean 
Shipping Reform Act and the Coast Guard Authorization Act of 1998 
having been superseded by the codification of those statutes into 
positive law.
    In addition, the Commission proposes modifying the definition of 
``person'' (Sec.  515.2(n)). The revised definition not only conforms 
with the definition of ``person'' in 1 U.S.C. 1, but also specifically 
includes ``limited liability companies'' within its ambit while 
retaining the current language that entities covered are those 
``existing under or authorized by the laws of the United States or of a 
foreign country.''
    The definition of ``principal'' (Sec.  515.2(o)) is revised to make 
it more concise and is not intended to change its meaning or scope. 
This definition has been carried forward over the decades substantially 
unchanged but always limited in focus to principals of licensed ocean 
freight forwarders. It was first promulgated pursuant to the Shipping 
Act, 1916, as amended, and carried forward in regulations implementing 
the Shipping Act of 1984 and OSRA.
    It is significant that the type of principal referred to in this 
definition is the person or entity to whom a licensed ocean freight 
forwarder owes a fiduciary duty. In contrast, the use of the word 
``principal'' in these regulations is focused upon an OTI's status 
(whether an NVOCC or a licensed ocean freight forwarder) as the 
principal with respect to the various types of agents that the OTI may 
employ to carry on its business.
    The absence of a definition for ``principal'' where it refers to an 
OTI acting as the principal is consistent with the Commission's 
decision in 1999 not to define the term agent when implementing the 
OSRA amendments. There the Commission reasoned that

[[Page 32947]]

defining ``agent'' was unnecessary ``because the term is used . . . to 
reflect the large body of agency law. The Commission does not want to 
inappropriately alter that definition, thus limiting or conflicting 
with the law relied on by the shipping industry in applying these 
regulations.'' Docket No. 98-28 Final Rule, supra at 28 SRR 651. The 
Commission adheres to its prior view that there is no need to define 
further the term ``principal'' in such contexts.
    The definitions of ``freight forwarding services'' (Sec.  515.2(h)) 
and ``non-vessel-operating common carrier services'' (Sec.  515.2(k)) 
are also revised to better reflect OTIs' current practices and 
terminology. For example, ``freight forwarding services'' are revised 
to include preparation of ``export documents, including required 
`electronic information,''' rather than being limited to preparation of 
paper-based export declarations (Sec.  515.2(h)(2)). OFF and NVOCC 
services are both revised to include preparation of ocean common 
carrier and NVOCC bills of lading ``or other shipping documents'' 
(Sec.  515.2(h)(5) and Sec.  515.2(k)(4)). These definitions currently 
refer to preparation of bills of lading ``or equivalent documents.'' 
The change ensures that the services cover preparation of the documents 
pursuant to which cargo is transported whether or not they are 
``equivalent'' to ``ocean bills of lading,'' as provided in the current 
definition of ``freight forwarding services.'' 46 CFR Sec.  
515.2(h)(5).
    The definition of ``advertisement'' is new along with a related new 
provision in section 515.31(j). Section 515.31(j) provides that OTIs 
and their agents (at the direction of their OTI principals) must 
include the OTI's name, license or registration number on all 
advertisements; are prohibited from including false or misleading 
information in ads and creates a rebuttable presumption that an entity 
that advertises OTI services has performed those services.
    Also new is the definition of ``registered non-vessel-operating 
common carrier,'' which identifies NVOCCs that are located outside of 
the United States and opt to register rather than to obtain a license. 
The term ``qualifying individual'' (QI) is added and defines QI as an 
individual that is an employee of a licensed OTI who is age 21, or 
older, is responsible for general supervision of the licensee's OTI 
operations and meets the Shipping Act's experience and character 
requirements. The definition reflects the intention that a licensee's 
QI cannot be someone that is nominally responsible for OTI operations 
while not actively involved in assuring that OTI functions are properly 
carried out. Hence, the QI must be responsible for ``general 
supervision'' of OTI operations. The QI must have that responsibility 
at the time a license is issued and must thereafter continue to 
exercise that responsibility. The OTI must timely replace the QI, as 
provided by the Commission's rules, when the designated QI ceases to 
exercise such supervision on behalf of the licensee.

Section 515.3--License; When Required

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

Section 515.4--License; When Not Required

    Section 515.4(b)--Branch Offices. The Commission proposes to 
eliminate the regulatory burden associated with procuring and 
maintaining additional financial responsibility to cover an OTI's 
unincorporated branch offices by deleting the reference to obtaining 
additional financial responsibility. A corresponding change is made to 
section 515.21(a)(4). The rule also proposes to delete section 
515.4(d), which refers to ocean freight brokers, as it is no longer 
needed.

Section 515.5--Forms and Fees

    Section 515.5(b) is modified to provide that all license 
applications and registration forms must be filed electronically unless 
a waiver request to file on paper is granted by the Director of the 
Bureau of Certification and Licensing. Electronic filing anticipates 
the eventual implementation of on-line filing and processing of 
applications and forms. Section 515.5(c)(1) has been added and requires 
OTIs to pay any applicable fees within ten (10) business days of the 
time of submission of such applications and forms. This may be 
modified, however, should the Commission develop the ability to receive 
on-line payments by credit or debit cards. Failure to make timely 
payment will cause an application or registration to be rejected. 
Section 515.5(c)(2) is added and will set out all fees applicable under 
Part 515 (e.g., fees for filing of license applications and 
registrations).

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

Section 515.11--Basic Requirements for Licensing; Eligibility

    The Commission proposes to clarify, in section 515.11(a), that the 
licensing requirements in section 19 of the Shipping Act, 46 U.S.C. 
41107-41109, apply to the applicant as a whole and, for that reason, 
require the Commission to consider the character of the principal 
owners and officers of applicants, as well as that of the QI. This 
reflects the Commission's current practice.
    Section 515.11(a)(1) is modified to require that the licensee's QI 
must have three years of ``relevant and diverse experience'' in 
performing OTI activities. The description of the types of experience 
required is intended to assure that a QI has experience handling 
virtually every aspect of an OTI's operations so that those under the 
QI's direction can be guided through complex shipments and problems as 
they arise. This requirement complements the definition of QI contained 
in section 515.2(p) that provides that the QI is ``responsible for 
general supervision'' of the applicant's OTI operations. This paragraph 
also defines ``principal shareholder'' as one who owns directly, 
indirectly or constructively 5 percent or more of the total combined 
voting power or 5 percent or more of the combined value of all classes 
of the OTI's shares. This threshold does not apply to equity owners 
such as mutual funds and exchange traded funds as it is not likely that 
such shareholders will have a direct role in operation of the OTI.
    The current content of section 515.11(a)(2) is deleted as 
unnecessary in view of Sec.  515.21 and Sec.  515.22. Section 
515.11(a)(2), as proposed, now provides that the three years of OTI 
experience required for a license may not be met by working for an 
unlicensed, unbonded or unregistered OTI. In other words, to qualify, 
relevant and diverse OTI experience must be obtained working for: 
Licensed or registered OTIs; foreign-based OTIs bonded under the 
Commission's current rules; a vessel

[[Page 32948]]

operating common carrier; or, as an employee of a cargo owner.
    The current content of section 515.11(a)(3) is no longer needed, 
and is deleted, as it provided for NVOCCs that had tariffs and 
financial responsibility in place at the time the OSRA licensing 
requirements came into effect to be temporarily grandfathered pending 
promulgation of regulations. The replacement paragraph, as proposed, 
makes clear the Commission may consider all information relevant to the 
determination of whether the applicant has the necessary character to 
render OTI services. Types of information that may be considered 
include, but are not limited to: Violations of any shipping laws, or 
statutes relating to the import, export or transport of merchandise in 
international trade; operating as an OTI without a license or 
registration; state and federal felonies and misdemeanors; voluntary 
and non-voluntary bankruptcies not discharged; tax liens; court and 
administrative judgments and proceedings; non-compliance with 
immigration status requirements; and denial, revocation, or suspension 
of a Transportation Worker Identification Credential or of a customs 
broker's license. It will be noted that the requirements in section 
515.11(a)(2) (prohibiting reliance upon experience acquired with an 
unlicensed, unregistered, or unbonded OTI), along with section 
515.11(a)(3), changes the Commission's current practice, in certain 
circumstances, of allowing use of unlicensed experience to qualify an 
individual to become licensed or become a QI when an applicant has 
sufficient qualifying experience.
    Section 515.11(b)(4) is added to identify the positions within the 
management structure of an LLC that are eligible to be designated as 
QI. An ``officer'' of an LLC may be the QI if the LLC's operating 
agreement so provides.
    Section 515.11(b)(2)-(4) also indicate that the QI for 
partnerships, corporations and LLCs are responsible for the ``general 
supervision'' of the licensee's OTI operations. This reinforces the 
identical requirement in the definition of QI.
    A new section 515.11(e) is added to provide that a foreign-based 
NVOCC that opts to obtain a license rather than register is required to 
establish a presence in the United States by opening an unincorporated 
office that is operated by a bona fide employee and qualifies to do 
business where it becomes resident. This provision reflects the 
Commission's 1999 clarification that in order for a foreign-based NVOCC 
to obtain a license it ``must set up an unincorporated office that is 
resident in the United States.'' Docket No. 98-28, Licensing, Financial 
Responsibility Requirements, and General Duties for Ocean 
Transportation Intermediaries, 28 SRR 667, 668 (FMC 1999). Failure to 
establish and maintain such an office may result in termination or 
revocation of a license pursuant to section 515.16(a)(9).

Section 515.12--Application for License

    Section 515.12(a) is revised to clarify instructions on filing a 
license application, including the payment of fees, and to provide that 
the Commission shall publish notice of filings of applications on its 
Web site, www.fmc.gov. Federal Register publication of applications 
will be discontinued. Section 515.12(b) is revised to provide for 
rejection of applications that are facially incomplete or where the 
applicant fails to meet the requirements of the Shipping Act or the 
Commission's regulations. The application fee is returned to the 
applicant along with a statement of reasons for the rejection. A new 
section 515.12(c) establishes a process pursuant to which the Bureau of 
Certification and Licensing (BCL) shall close applications where 
applicants fail to timely provide information or documents needed for 
review. The date for submission of such information will be provided by 
BCL to the applicant. Applicants whose applications are closed may 
reapply at any time.
    Section 515.12(e) is superseded by the electronic filing 
requirement in section 515.5(b). Section 515.12(e) currently provides 
for an optional method for OTIs to electronically file these forms and 
pay lower fees than for filing paper forms. The fees for a license 
application will be set out in section 515.5(c)(2).

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

    Section 515.14(c) is new. It requires that OTI licenses be issued 
for an initial two year period and renewed every two (2) years. Section 
515.4(d) is also new and requires licensees to submit a license renewal 
application form 60 days prior to the expiration date of their license. 
This paragraph also provides that a new license bear an expiration date 
on the same day and month as the date on which the license is 
originally issued, with the expiration day and month remaining the same 
for successive renewals regardless of the date a renewal form is 
submitted or the date a renewed license is issued. This feature 
provides ongoing certainty to the licensee as to its status.
    The proposed renewal process for OTIs is straightforward as their 
license will be issued with expiration dates by which renewal must be 
completed. The license renewal requirement is intended to ensure that 
information essential to the Commission's oversight of OTIs is verified 
periodically. Renewal will require licensed OTIs to update their QIs' 
identification and contact information, changes in business or 
organization, trade names, tariff publication information, physical 
address, and electronic contact data.
    In proposing this change, the Commission is mindful that no 
expiration dates are included on the licenses of the approximately 
4,500 OTIs that are currently licensed. Accordingly, a process is 
needed to allow these OTIs to renew their licenses without unreasonable 
burden or processing delays that may occur if large numbers of renewal 
applications are submitted all at once. The Commission seeks comments 
from the public as to the process they consider would best achieve this 
goal. For example, would email notification by BCL to each such 
licensee of the expiration date assigned by BCL enable these OTIs to 
renew their licenses without confusion?
    Failure to renew a license by providing the required information 
and fee may result in revocation or suspension of the license pursuant 
to section 515.16. This renewal process, however, will not trigger a 
detailed Commission review or consideration of the character and 
eligibility of existing licensed OTIs except when an OTI supplies 
information that requires such review or approval pursuant to section 
515.20. A copy of the license renewal form is included at the end of 
this Supplementary Information. Public comments on this form are also 
requested.

Section 515.15--Denial of License

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

Section 515.16--Revocation or Suspension of License

    Section 515.16(a) is revised to also refer to the new hearing 
procedures set forth in section 515.17. The grounds for revocation or 
suspension of a license listed in this paragraph are reordered and 
section 515.16(a)(2) is revised to provide for a license revocation or 
suspension when an OTI fails to respond to a lawful order or request of

[[Page 32949]]

the Commission or an authorized Commission representative. Section 
515.16(a)(3) provides that a license may be revoked or suspended when 
an OTI makes a materially false or misleading statement to the 
Commission in connection with an application for, amendment to, or 
renewal of, a license. Section 515.16(a)(6) is added to provide for 
revocation or suspension of an NVOCC's license for failure to (1) file 
a Form FMC-1 within 120 days of being notified that its license 
application had been approved or (2) maintain a Form FMC-1 and a 
published tariff. Section 515.16(a)(10) is added to provide that a 
license may be revoked or suspended for any act, omission or matter 
upon which a new license application may be denied pursuant to section 
515.15.
    A new Sec.  515.16(a)(7) provides that an NVOCC's license may be 
revoked or suspended if it knowingly and willfully accepts cargo from, 
processes, books, or transports cargo for an OTI that does not have an 
OTI license or has not registered, or fails to provide proof of 
financial responsibility. 46 U.S.C. 41104(11). Section 515.16(a)(9) is 
added to provide that a foreign-based NVOCC that elects to become 
licensed may have that license terminated or suspended for failure to 
establish or maintain an unincorporated office operated as required by 
section 515.11(e).
    Section 515.16(b) is revised to provide for publication of notices 
of revocation and suspension on the Commission's Web site.

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

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

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

    This section establishes new requirements applicable to NVOCCs 
located outside the United States that wish to provide NVOCC services 
in the U.S. foreign trade. Foreign-based NVOCCs that choose to operate 
as registered NVOCCs, rather than obtaining a license, must submit a 
registration form, the required fee and evidence of financial 
responsibility pursuant to section 515.21(a)(3). New and renewal 
registrations will be issued for periods of two years. Registrations 
will be renewed by submission of an updated registration form and 
required fee.
    There are currently approximately 1,200 NVOCCs not located in the 
U.S. that have provided proof of financial responsibility and published 
a tariff covering their services in the U.S. trades. The Commission 
currently has no formal process for identifying these foreign-based 
NVOCCs. The Commission intends that they be registered in a methodical, 
but expeditious, manner. The Commission requests the public to comment 
on a process to be used by the Commission to best accomplish the goal 
of registering such foreign-based NVOCCs with a minimum of burden or 
processing delays.
    This registration is not an OTI license. In addition to the current 
requirements to provide proof of financial responsibility, publish a 
tariff, and file a Form FMC-1, registrants would be required to submit 
limited additional information on a registration form. No inquiry by 
the Commission is made into the experience or character of these 
registrants. Completed registrations become effective upon receipt by 
the Commission, provided they meet the other requirements for foreign-
based NVOCCs.
    The registration form submitted by foreign-based NVOCCs will 
provide a concise source of information, including the registrant's 
legal name, trade names under which it operates, principal business 
address, telephone and fax numbers, contact person with email address, 
and U.S. resident legal agent contact and address information. A copy 
of the new registration form is included at the end of this 
Supplementary Information. Public comment is also requested on this 
form.
    The registration form will allow the Commission to become better 
informed about the identity of foreign-based NVOCCs operating in the 
U.S. trades without a license and, consequently, to better protect the 
public under the Shipping Act. The increased transparency provided by 
this section is furthered by the provision in section 515.3 clarifying 
that foreign-based NVOCCs must use only licensed OTIs as agents to 
perform NVOCC services in the United States. This provision is in 
furtherance of section 10(b)(11) of the Shipping Act, 46 U.S.C. 
41104(11), which prohibits common carriers from knowingly or willfully 
accepting cargo from or transporting cargo for NVOCCs that do not have 
financial responsibility in place or have not published a tariff. 
Moreover, the Commission has strongly signaled that it desires the 
shipping public, vessel operating common carriers, and NVOCCs to deal 
only with licensed or registered NVOCCs. Docket No. 06-01, Worldwide 
Relocations, Inc., et. al., Possible Violations of Sections 8, 10, and 
19 of the Shipping Act of 1984 as Well as the Commission's Regulations 
at 46 CFR 515.13, 515.21, and 520.3, 32 SRR 495, 505 (2012). (Worldwide 
Relocations). Section 515.19(f) requires registered NVOCCs to report 
changes to their legal and trade names, address and contact information 
for their principal place of business and contact person. Section 
515.19(g) informs registered NVOCCs of grounds upon which the 
Commission may base terminations or suspensions of the effectiveness of 
a registration. Section 515.19(g) also provides that a registrant may 
request a hearing using the procedural steps set out in Sec.  515.17 
governing hearing requests.

[[Page 32950]]

Section 515.20--Changes in Organization

    The content in this section (moved from Sec.  515.18) removes, as 
unneeded, the provision that specifically requires separately 
incorporated branch offices to obtain their own licenses. All 
separately incorporated entities that provide OTI services in their own 
right are required to be licensed, irrespective of whether they are 
related to another incorporated OTI.
    Section 515.20(c) is modified to provide that OTIs operating as 
partnerships, corporations or LLCs must submit a report within 15 
business days when their QI ceases to serve as a full-time employee of 
the OTI or when the QI is no longer responsible for the general 
supervision of the licensee's OTI activities. New content is added to 
section 515.20(e) identifying changes to a licensee's organization that 
must also be reported to the Commission on an ongoing basis, such as 
changes in business address, criminal conviction or indictment of the 
licensee, QI or its officers and changes of 5 percent or more in the 
common equity ownership or voting securities of the OTI. No fee will be 
charged for filings pursuant to section 515.20(e).

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

Section 515.21--Financial Responsibility Requirements

    The Commission proposes increasing OTI financial responsibility 
levels in section 515.21 to reflect inflation and the fact that, in 
recent years, these levels have proven inadequate to provide security 
sufficient to cover claims against OTI bonds. For example, the bonds of 
Global Ocean Freight, Inc. (Organization No. 018485) (license revoked 
April 4, 2009) and Pacific Atlantic Lines, Inc. (Organization No. 
018407) (license revoked November 19, 2011) proved inadequate to cover 
claims of shippers and others.
    With respect to Global Ocean Freight, Inc., the OTI's surety 
received and paid a single shipper claim for $36,170.12 before it had 
knowledge of any of the numerous other claims. As a result, only 
$38,829.88 of the $75,000 bond then remained available to divide among 
sixty-nine (69) subsequent claimants. Those 69 claims totaled 
$636,203.46. Hence, as a group those claimants received 6.1 percent of 
the total amount claimed. With respect to Pacific Atlantic Lines, Inc., 
the claims made against the bond totaled $549,192.59 by nineteen 
claimants. Hence, the $75,000 bond covered approximately 13.7 percent 
of the total claimed. Two vessel operating common carrier claimants 
received almost $52,000 of the $75,000 bond.
    The adequacy of bonds or other forms of financial responsibility to 
compensate those injured by OTIs is specifically addressed by the 
requirements of the Shipping Act (46 U.S.C. 40902). In light of its 
experience, the Commission is concerned that the current financial 
responsibility levels are inadequate. Accordingly, to improve 
protection to claimants, the Commission proposes to increase the ocean 
freight forwarder financial responsibility amount from $50,000 to 
$75,000; the NVOCC amount from $75,000 to $100,000; and $200,000 for 
registered NVOCCs (an increase from $150,000, which is currently 
applicable pursuant to section 515.21(a)(3) to ``unlicensed foreign-
based entities'' providing NVOCC services). Section 515.21(a)(3) is 
also revised to clarify that registered OTIs are strictly responsible 
for the acts or omissions of their employees and agents, wherever they 
are located. Proposed section 515.21(b) requires group financial 
responsibility to be increased from $3,000,000 to $4,000,000 in 
aggregate.
    In addition, the Commission proposes, in section 515.21(a)(4), to 
require OTIs to restore their bond, insurance or surety to the required 
amounts when claims have been paid. OTIs must restore the applicable 
financial responsibility amount within 60 days of a claim being paid. 
It is estimated that 60 days is sufficient time for financial 
responsibility to be restored to the required amount or, if a financial 
responsibility provider is inclined to terminate the financial 
responsibility, for the instrument to be terminated. The proposal would 
prohibit OTIs from accepting new business until the OTI furnishes proof 
that the financial responsibility amount has been restored to the 
amount required by the Commission's regulations. Failure to restore the 
financial responsibility will result in immediate license or 
registration revocation.
    The Commission understands that a requirement that financial 
responsibility amount be replenished would not result in increased cost 
to OTIs at the time the financial responsibility is first issued. The 
replenishment requirement thus does not appear to be a barrier to entry 
by small OTIs. However, the Commission also understands that where 
substantial claims are later made against a bond, the surety may 
question the credit worthiness of the OTI and may demand a higher 
premium or increased collateral before it will replenish the bond or, 
as they may do now, the provider may decide to terminate the OTI's 
bond. Because this is a new element that changes how financial 
responsibility instruments operate, comments from surety companies, 
financial responsibility providers or other interested parties, as well 
as the affected OTIs, are especially requested.
    Because the approximately 5,900 licensed OTIs and foreign-based 
NVOCCs that have existing financial responsibility in place will need 
to conform to the increased amounts, the Commission includes a new 
section 515.21(e) permitting individual OTIs, groups or associations to 
increase their financial responsibility by bond rider or by arranging 
for a new instrument of financial responsibility. OTIs that implement 
the increase by rider must assure that any instrument of financial 
responsibility that supersedes the one amended by rider meets the 
increased levels. This approach closely tracks the process previously 
adopted by the Commission. Docket No. 98-28 Final Rule, supra at 28 SRR 
646.

Section 515.23--Claims Against an Ocean Transportation Intermediary

    The Commission proposes to amend this section by establishing 
priorities for claims made against OTI bonds whereby claims of shippers 
and consignees are given precedence over common carriers and commercial 
creditors. The Commission understands that financial responsibility 
providers currently do not prioritize among claims against an OTI bond. 
In one instance, a claimant was paid in full because its claim preceded 
other claims by a number of months. The remainder of the bond was 
shared among a large number of claimants proportionate to their claimed 
losses. The Commission has also observed that carriers may continue to 
extend credit to NVOCCs until the amounts owed them are excessively 
high, notwithstanding that they are in a much better position than 
others to limit their losses to such NVOCCs. It is in this context that 
the Commission considers it necessary to establish a priority system to 
provide more protection for shippers. In order to provide better and 
more accurate information as to claims being made on OTIs' financial 
responsibility, additional reporting has been incorporated into the 
financial responsibility forms required by the Commission's regulations 
and which are included at the end of the draft rule.
    Section 515.23(c) and (d) create three tiers of payment priorities 
for claims the financial responsibility provider finds valid: (1) 
Shipper and consignee claims;

[[Page 32951]]

(2) claims by common carriers, ports, terminals, and other third party 
creditors with respect to claims arising out of OTI activities; and (3) 
claims by the Commission under the Shipping Act. Claims in tier (1) 
must be satisfied before claims in tier (2) are paid, with tier (3) 
being paid only after claims in tiers (1) and (2) are satisfied.
    Section 515.23(e) establishes requirements for common carriers, 
marine terminal operators and financial responsibility providers 
(pursuant to the terms of the financial instrument forms contained in 
the ANPR) to submit notice to BCL of court actions or claims filed or 
claims received (in the case of the providers). Those notices of court 
actions and claims will be published on the Commission's Web site for 
information purposes only. The notices would not be intended to 
indicate the merits or outcome of such actions or to indicate 
violations of the Shipping Act, the Commission's regulations or any 
other statute or regulation. For example, the general notices will 
provide shippers with timely information relevant to other parties' 
commercial experience with a particular OTI, whether or not a shipper 
pursues a claim of its own in court or with the financial 
responsibility provider.
    Section 515.23(f) sets forth a mechanism for engaging the priority 
system established in sections 515.23(c) and (d). Financial 
responsibility providers must consult the notices of court actions and 
claims published on the Commission's Web site when they receive a 
claim. See, section 515.23(f)(1). If the provider finds a notice on the 
Web site involving the same OTI, section 515.23(f)(2) provides that the 
provider must defer payment of claims for a period of 5 months in order 
to allow any other claimants to file. Section 515.23(f)(3) provides 
that payment of a claim for an amount that is more than 20 percent of 
the face amount of the instrument of financial responsibility must not 
be made for 5 months after the date the claim is received. This section 
addresses the situation presented by Global Ocean Freight, Inc., where 
the priority system would be undermined if such a large claim was paid 
without a delay to allow other shipper claimants, if any, to file 
claims and obtain the benefit of the priority system.
    All common carriers, marine terminal operators and financial 
responsibility providers are requested to provide comments on all 
aspects of the priority system established in section 515.23(c)-(f).
    The process provided in section 515.23(b)(2) to address situations 
where the OTI and the person seeking payment from the available 
financial responsibility are unable to agree on the amount of a claim, 
is shortened overall by thirty days in order to speed resolution of 
claims that do not involve the filing of a complaint with the 
Commission.
    Financial responsibility providers are also requested to respond as 
to their company's experience to the following questions, but without 
disclosing the identities of OTIs:
    (1) How many claims and their total dollar amount were made during 
the period 2009 through 2012 against OTI financial responsibility 
instruments provided by you?
    (2) How many claims (and their total dollar amount) did you pay?
    (3) How many individual claims were paid that exhausted the entire 
financial responsibility amount for the instrument; and as to these 
claims, what was the total amount of the claims sought by claimants (as 
opposed to the amount that you paid out)?
    (4) How many claims received only a fraction of the amount sought 
due to other claims exhausting the bond's value?

Section 515.24--Agent for Service of Process

    Section 515.24(b) is revised to provide for service of process by 
regular mail or courier service on the legal agents of NVOCCs that are 
not ``in the United States.'' See, 46 U.S.C. 40901. The current rule 
requires such service to be made using certified mail, return receipt 
requested.
    As a general matter, section 515.24(c) in the draft rule is revised 
to help ensure that consumers and other claimants can perfect service 
of process on such NVOCCs for as long as such NVOCC's financial 
responsibility remains available to cover valid claims. Strict 
interpretations of section 515.24 may lead to situations where no 
service can be made on such a foreign-based NVOCC via a legal agent in 
the United States and the Commission's Secretary likewise would not be 
authorized to act as the alternate legal agent for the NVOCC because 
the agent was not dead, disabled or unavailable as required by the 
current rule.
    In at least one instance known to the Commission, a licensed 
foreign-based NVOCC surrendered its license and terminated its tariff 
(and, hence, becoming an NVOCC not in the U.S.) thereby frustrating all 
efforts for it to be served under the current rules. This result 
appears to defeat Congress' intent behind the resident agent 
requirement when, in 1990, it first required NVOCCs to provide 
financial responsibility:

    The requirement that foreign NVOCCs designate a resident agent 
in the United States for receipt of judicial or administrative 
process will permit the FMC and private parties to initiate and 
conduct proceedings against foreign-based NVOCCs without the 
difficulties inherent in effecting service of process overseas. This 
should significantly assist the FMC in its regulation of the NVOCC 
industry and its enforcement of the 1984 Act.

H.R. Rep. No. 101-785, at 3 (1990).

    Section 515.24(c) is revised to clarify that the Commission's 
Secretary shall be deemed to be the legal agent for service of process 
when U.S. legal agents of NVOCCs that are not ``in the United States'' 
are unable to be served because of death, disability, or unavailability 
but also in situations where such designations are terminated or 
expired. Also, authority is added for the Secretary to act as legal 
agent where such an NVOCC does not publish its legal agent's name and 
contact information in its tariff as required by the Commission's 
regulations. These changes help ensure that the Secretary can serve as 
alternate legal agent in circumstances that do not fit within the 
current rule's reasons triggering the Secretary's authority.
    A complementary addition is made to section 515.24(c) to provide 
that the designation of the Secretary as legal agent shall survive the 
entire period during which claims may be made against the financial 
responsibility instrument, including when a foreign-based NVOCC's 
license (i.e., where such foreign-based NVOCC elected to become 
licensed) or tariff are surrendered, cancelled or terminated. This 
addition also makes it clear that the continuation of the designation 
is unaffected by the ineffectiveness of such NVOCC's license or tariff. 
Taken together, these changes will help protect consumers and other 
claimants from actions to avoid service.

Section 515.25--Filing of Proof of Financial Responsibility

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

[[Page 32952]]

Section 515.26--Termination of Financial Responsibility

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

Section 515.27--Proof of Compliance--NVOCC

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

Subpart C Appendices

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

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

Section 515.31--General Duties

    As referenced above, this section reflects the Commission grant of 
the petition for a declaratory order in Docket No. 06-08, In the Matter 
of the Lawfulness of Unlicensed Persons Acting as Agents for Licensed 
Ocean Transportation Intermediaries, 31 SRR 1058 (2009),\2\ by ensuring 
that the agency relationship is disclosed in all documents that are 
related to the transportation provided by the OTI principal or on its 
behalf. In its order granting the petition, the Commission ordered 
``that it is lawful for a licensed OTI to engage an unlicensed person 
to act as its agent to perform OTI services on behalf of the disclosed 
licensed OTI.'' In keeping with the court's decision in Landstar 
Express, this section imposes requirements on OTI principals.
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    \2\ The Commission granted the petition to the extent consistent 
with the court's decision in Landstar Express America, Inc. v. 
Federal Maritime Commission, 569 F.3d 493 (D.C. Cir. 2009) (Landstar 
Express).
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    Section 515.31(a) and (b) are amended to clarify that OTIs must 
include their names and license or registration numbers on all shipping 
documents and communications (including written, printed and electronic 
communications), and require their agents to include the OTI 
principal's name, license or registration number on all shipping 
documents issued on behalf of the OTI. Consistent with the common law 
of agency, this section is also amended to provide that an entity that 
issues shipping documents in its own name is presumed to be operating 
in its own name and not on behalf of a licensed or registered OTI. 
Restatement Third, Agency Sec. Sec.  1.02 and 1.04 (2006).
    Section 515.31(c) is revised to provide that an OTI is not 
permitted to allow its name, license, license number, or registration 
number to be used by anyone that is not its employee or agent. This 
paragraph clarifies that an OTI that provides OTI services in its own 
name, in addition to acting as an agent for another licensed OTI, must 
itself be licensed as an OTI. OTIs are prohibited from using an agent 
to provide OTI services in the United States unless the agent includes 
the required information regarding its OTI principal in all shipping 
documents issued on its principal's behalf.
    In addition to placing an obligation on all OTIs to promptly 
respond to requests for all records and books of accounts made by 
authorized Commission representatives, section 515.31(g) now clarifies 
that OTI principals are responsible for requiring that their agents 
promptly respond to requests directed to such agents.
    Section 515.31(j) is added and requires OTIs to include the OTI's 
name, license or registration number in all advertisements. OTIs are 
also prohibited from including false or misleading information in such 
advertisements. Additionally, OTIs must require (1) that their agents 
include this information (the OTI principal's name, license or 
registration number) on shipping documents covering the principal's 
shipments and (2) that agents do not include false or misleading 
information in advertisements.
    These advertisement provisions incorporate the core of two 
recommendations adopted by the Commission in Fact Finding 27. One 
recommendation calls for a rulemaking ``to develop a more general and 
comprehensive definition of the matters, items and actions'' which give 
rise to acting as an OTI in the household goods area.\3\ The Fact 
Finding 27 (``FF 27'') report elucidated:
---------------------------------------------------------------------------

    \3\ Fact Finding 27 Final Report, Attachment: Motions for 
Commission Meeting May 11, 2011, Motion 19 at 4.

    The record developed in FF 27 demonstrates that unlicensed OTIs, 
operating without the protection of a bond or other surety, and 
without publishing a tariff, routinely advertise their ocean 
transportation intermediary services in the electronic and print 
media. Further, many unlicensed OTIs advertise and promote their 
services on their own Web sites and through industry data bases and 
Web sites targeting household goods shippers. It is common for these 
unlicensed operators to advertise that they are ``FMC Approved.'' 
Consumers, particularly inexperienced international shippers, are 
easily deceived by these advertisements into using the services of 
---------------------------------------------------------------------------
unlicensed, unbonded operators.

Fact Finding 27 Final Report at 37.

    The second recommendation in Fact Finding 27 advocates a rulemaking 
to require that OTIs ensure that ``their bona fide agents to include 
the OTI/principal's name and license number on all stationery, billing 
forms, and all papers and invoices. . . .'' \4\ Though these 
recommendations addressed problems with respect to the manner in which 
household goods OTIs hold out their services to the public, these 
problems are common with respect to OTIs transporting general cargo and 
consolidated shipments that may include household goods. Therefore, the 
proposed rule would apply this requirement to all OTIs.
---------------------------------------------------------------------------

    \4\ Fact Finding 27 Final Report, Attachment: Motions for 
Commission Meeting May 11, 2011, Motion 20 at 4.
---------------------------------------------------------------------------

    Section 515.31(j)(3) further provides that where an entity 
advertises OTI services, with no indication that it is acting as an 
agent for its OTI principal, a presumption arises that the entity has 
performed the services offered in the advertisement as a principal. 
Fact Finding 27 Final Report urged such a presumption be adopted:

    The Commission should also adopt a legal presumption that the 
failure to disclose the agent/principal relationship and the 
principal's FMC license number on the shipping document will give 
rise to a presumption that the issuer of the document is engaged in 
unlicensed OTI activity, unless otherwise licensed and bonded.

Fact Finding 27 Report at 38. In adopting Motion 20 in Fact 
Finding 27, the Commission approved ``appropriate presumptions that 
would apply where such disclosure is not made.'' Final Report, 
Attachment: Motions for Commission Meeting May 11, 2011, Motion 
20 at page 4.
    The presumptions in proposed section 515.31(a) (that an entity is

[[Page 32953]]

presumed to be operating in its own name when it issues shipping 
documents without including the name and license or registration number 
of an OTI), and in 515.31(j)(3) (the entity advertising OTI services is 
presumed to have actually performed them) also follow the Commission's 
recent decision in Worldwide Relocations. Relevant to the presumption 
in section 515.31(a), the Commission affirmed its own case law in 
Activities, Tariff Filing Practices and Carrier Status of 
Containerships, Inc., 9 F.M.C. 56, 62 n.7 (1965) (Containerships), 
stating ``that advertising and solicitations to the public are 
important factors in determining the issue of `holding out' by an 
entity.'' Worldwide Relocations, supra at 503. Further, in 
Containerships, the Commission stated that a presumption of holding out 
as a common carrier can arise by course of conduct, including issuing 
shipping documents that indicate an entity is acting on its own behalf. 
Containerships, supra at 9 F.M.C. 63. As to the presumption in section 
515.31(j)(3), the Commission stated in Worldwide Relocations: ``[W]hen 
it is proven an entity has advertised something to the shipping public, 
it is permissible to infer or presume that the entity does what it 
advertises.'' Worldwide Relocations, supra at 505.
    Section 515.31(k) is added and would provide that the agency 
agreements between an OTI and its agents must be in writing, signed by 
the parties and made available to the Commission. Also, a new Sec.  
515.31(l) would provide that no person may advertise or hold out to 
provide OTI services without first being licensed or registered and 
providing proof of financial responsibility.

Section 515.33--Records Required to be Kept

    The introductory paragraph of Section 515.33 is revised to clarify 
that all OTIs shall maintain records pertaining to their OTI business 
and that the records must be maintained in useable form and readily 
available to the Commission. This records retention requirement applies 
whether the records are kept in the United States or in foreign 
locations. The requirement to keep such records solely in the United 
States is deleted.

Subpart E--Freight Forwarding Fees and Compensation

Section 515.41--Forwarder and Principal; Fees

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

Section 515.42--Forwarder and Carrier; Compensation

    Section 515.42(c) is revised to specifically permit electronic 
certifications by forwarders to carriers that forwarding services have 
been provided. Such electronic certifications (e.g., exchanges of 
emails) must identify the shipments for which compensation is made and 
contain confirmations between the forwarder and the common carrier that 
the services for which forwarder compensation is to be paid have been 
provided. This provision will ensure, for example, that the forwarder 
will confirm the carrier's list of shipments is correct, and, if not, 
the forwarder will advise the carrier of shipments that should be added 
or deleted. Certifications must be retained for a period of 5 years by 
the common carrier.

Request for Comments Relating Particularly to Fact Finding No. 27 
Recommendation To Establish a New ``Small Package/Barrel'' NVOCC 
License

    On May 11, 2011, the Federal Maritime Commission unanimously 
approved for action a series of recommendations contained in the Final 
Report for Fact Finding Investigation No. 27, Potentially Unlawful, 
Unfair or Deceptive Ocean Transportation Practices Related to the 
Movement of Household Goods or Personal Property in U.S.-Foreign 
Oceanborne Trades. The Fact Finding 27 Final Report was the culmination 
of a non-adjudicatory investigation initiated on June 23, 2010, to 
develop a record on the nature, scope, and frequency of potentially 
unfair, unlawful, or deceptive practices in the shipping of household 
goods or personal property within the Commission's jurisdiction.
    One of the recommendations adopted was that the Commission initiate 
a rulemaking to establish a new NVOCC license category for those 
operating only in the so called ``barrel trade.'' Significant features 
of such a license category would be a lower financial responsibility 
requirement, tailored standards for such OTIs and the development of 
guidelines for such a separate license category. See, Fact Finding 27 
Final Report, Attachment: Motions for Commission Meeting May 11, 2011, 
Motion 17 at 4.
    The Fact Finding 27 Final Report described the ``barrel trade'' as 
one ``where individuals--primarily from various local ethnic/immigrant 
communities--send small shipments of personal goods to relatives or 
friends in their home countries [such as] in the Philippines, Latin 
America and the Caribbean Basin on a semi-regular basis.'' Fact Finding 
27 Final Report, at 4. The Report also observes that the cost of 
complying with the Commission's OTI regulations appears to discourage 
these small unlicensed OTIs from obtaining an OTI license, publishing a 
tariff, and securing an appropriate OTI bond for the protection of the 
public. The Fact Finding 27 Final Report listed a number of standards 
that could be applied to a small package/barrel trade license category:
     A minimum of one year of OTI experience with household 
goods;
     ``Character'' standards the same as a regular licensee;
     Interview by an Area Representative;
     A detailed reference statement to accompany application 
that is signed ``under penalty of perjury;''
     CADRS to be used for consumer disputes as first mediation 
option;
     A lower bond amount for this type of license;
     Surety company pre-approval of a bond to accompany 
application; and
     All other conditions that apply to a regular NVOCC 
license.
    The Commission requests the public to provide comments and 
suggestions as to the usefulness of applying all, or some, of these 
standards in creating a new category of OTI license.
    The Commission also requests the public to address the following 
questions that relate to how to differentiate between OTIs that should 
qualify for a small package/barrel trade license and those that should 
not; what cargo types and volumes fall within or limit the license; and 
the contours and effects of a lower financial responsibility 
requirement. The Commission understands that some information requested 
may be business confidential in nature and will treat responses 
confidentially to the extent requested and allowed by law. Such 
confidential information, however, must be submitted in the manner 
described above at the beginning of this Supplementary Information. The 
questions are as follows:
    1. Are you currently a licensed OTI?
    2. What was your volume of household goods and personal automobiles 
transported in the U.S. oceanborne commerce, for calendar year 2012? 
Please provide the volume of household goods in TEUs and the number of 
personal autos carried.
    3. What was your total volume of cargo, including household goods, 
if

[[Page 32954]]

any, in the U.S. oceanborne commerce for calendar year 2012? What types 
of cargo (e.g., electrical goods, automobiles), other than household 
goods, did you carry during calendar year 2012?
    4. Does your company transport cargo in the barrel trade, as 
described above, between the United States and the Philippines, Latin 
America or the Caribbean Basin? If so, what was your barrel cargo 
volume for calendar year 2012?
    5. If you transported cargo in the barrel trade in calendar year 
2012, what types of cargo, other than barrel cargo, did you carry 
(e.g., electrical goods, automobiles)?
    6. Does your company transport ``balikbayan'' box cargo by water in 
the trade between the U.S. and the Philippines? If so, what was your 
balikbayan box volume for calendar year 2012?
    7. With reference to the description of the barrel trades above, 
would this description also accurately describe transportation of 
balikbayan boxes? If not, describe the balikbayan trade.
    8. If you transport balikbayan boxes or barrel trade cargo, are 
such shipments consolidated in containers with general cargo that is 
not household goods cargo?
    9. Are there other types of small package or household goods 
transported in the U.S. ocean-borne trades that should be included 
within the coverage of a new OTI license? What types of cargo should be 
excluded?
    10. Should there be annual cargo volume limits for OTIs to operate 
under a small package/barrel trade license? If so, what volume cap 
would be appropriate?
    11. In the event that a small package/barrel trade licensed OTI 
exceeds the limits of its license (e.g., an annual cargo volume limit 
or cargo type limitation), what rules might be promulgated to ensure 
that licensees operate within the authority of the license?
    12. What dollar amount would be appropriate as the financial 
responsibility requirement for a small package/barrel trade OTI 
license? Explain why this amount is adequate.
    13. Would your company pursue a small package/barrel trade license 
if the Commission creates such a category? If so, please identify what 
you anticipate would be the most important benefits to your firm/
business. Also identify benefits to your customers.
    14. If your firm/business would not likely pursue a small package/
barrel trade license, in your estimation would OTIs with such a license 
gain competitive advantage over your firm/business? Please explain.
    15. Does your firm/business favor a small package/barrel license 
that requires a lower financial responsibility amount than that for 
other OTIs?
    16. If you are a licensed OTI and would pursue a small package/
barrel trade license, do you anticipate changing the type of financial 
responsibility you currently have?
    17. If you are a financial responsibility provider (e.g., insurance 
company, surety bond provider), do you have suggestions or concerns 
with respect to providing pre-approval of financial responsibility to 
small package/barrel trade OTIs?
    18. If you are a financial responsibility provider, do you 
anticipate that a bond for a small package/barrel trade licensed OTI 
would nonetheless cover claims for the transportation of cargo that 
fits neither the description of small package or barrel trade?

Regulatory Flexibility Act--Information Request Regarding Impact on 
Small Entities

    The Commission requests public comment on this Advance Notice of 
Proposed Rulemaking regarding the economic impacts of such a proposed 
rule on small entities as required by the Regulatory Flexibility Act 
(RFA),\5\ as amended by the Small Business Regulatory Enforcement 
Fairness Act (SBREFA).\6\ The RFA requires Federal agencies to consider 
the impact of regulatory proposals on small entities and determine, in 
good faith, whether there were equally effective alternatives that 
would make the regulatory burden on small business more equitable.\7\
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    \5\ Regulatory Flexibility Act, Public Law 96-354, 94 Stat. 1164 
(codified at 5 U.S.C. 601 et seq.).
    \6\ Small Business Regulatory Enforcement Fairness Act of 1996, 
Public Law 104-121, 110 Stat. 857.
    \7\ The term ``small entities'' comprises small business and 
not-for-profit organizations that are independently owned and 
operated and are not dominant in their field, and governmental 
jurisdictions with populations of less than 50,000.
---------------------------------------------------------------------------

    The industry regulated under Part 515 of the CFR consists of 
``persons'' operating as ocean transportation intermediaries.\8\ An 
ocean transportation intermediary means an ocean freight forwarder or a 
non-vessel-operating common carrier. For the purposes of FMC 
regulations, ocean freight forwarder means a person that--(i) in the 
United States, dispatches shipments from the United States via a common 
carrier and books or otherwise arranges space for those shipments on 
behalf of shippers; and (ii) processes the documentation or performs 
related activities incident to those shipments. A non-vessel-operating 
common carrier (NVOCC) means a common carrier that does not operate the 
vessels by which the ocean transportation is provided, and is a shipper 
in its relationship with an ocean common carrier.
---------------------------------------------------------------------------

    \8\ The FMC OTI rules define ``person'' to include individuals, 
corporations, partnerships, and associations existing under or 
authorized by the laws of the United States or of a foreign country. 
(See 46 CFR 515.2 (p)).
---------------------------------------------------------------------------

    The North American Industry Classification System (NAICS) code 
applicable to the OTI industry is 488510--Freight Transportation 
Arrangement. Using this code, the Small Business Administration (SBA) 
size standard for a small business in the OTI industry is average 
annual receipts \9\ of $14 million or less. However, there is an 
exception for NVOCCs and Household Goods Forwarders. For those 
entities, the size standard is $25.5 million or less in annual revenue.
---------------------------------------------------------------------------

    \9\ As measured by total revenues, but excluding funds received 
in trust for an unaffiliated third party, such as bookings or sales 
subject to commissions. The commissions received are included as 
revenue. Source: SBA's Table of Small Business Standards matched to 
the North American Industry Classification System Codes. http://www.sba.gov/sites/default/files/files/Size_Standards_Table(1).pdf
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    The questions below seek information related to each OTI's type of 
business, firm size, and estimated cost of compliance with the proposed 
rule. Responses to these questions may be submitted confidentially.

Questions Regarding the Proposed Rule's Economic Impact on Regulated 
Entities

    In responding to the questions below, OTIs are asked to provide the 
data requested in terms of all of its domestic and foreign affiliates. 
If, as an OTI, you are separately incorporated as an NVOCC and an OFF, 
you are requested to provide information for both parties combined.
    1. What is your line of business? Check all that apply: OFF, NVOCC, 
or other (please specify)?
    2. What was your company's total revenue in 2012? These figures 
should reflect revenues from all sources, including affiliated 
companies and business obtained through agency relationships.
    3. How much do you currently pay annually for your financial 
responsibility coverage? What are your current annual premiums and/or 
collateral requirements required by your financial responsibility 
provider? What other costs are associated with your financial 
responsibility coverage?

[[Page 32955]]

    4. Estimate the number of staff hours required to comply with the 
existing rule's financial responsibility requirements.
    5. Estimate the number of staff hours that would be required to 
comply with the proposed rule.
    6. How much do you estimate you will have to pay for your new 
financial responsibility coverage as required in the proposed rule? 
Please provide other costs associated with such coverage.
    7. Will the requirements in the proposed rule change your type of 
coverage? If so, explain how.
    8. Please detail your estimated annual cost of compliance with the 
proposed rule's new financial responsibility requirements.
    9. How will the proposed rules affect your continuing operations?
    As some of the information requested may be business confidential 
in nature, the Commission will treat such responses confidentially, if 
requested, to the extent provided by law. Such confidential 
information, however, must be submitted in the manner described above 
at the beginning of this SUPPLEMENTARY INFORMATION.
BILLING CODE 6730-01-P

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BILLING CODE 6730-01-C
    This rule is not a ``major rule'' under 5 U.S.C. 804(2).

List of Subjects in 46 CFR Part 515

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

    For the reasons stated in the preamble, the Federal Maritime 
Commission proposes to amend 46 CFR part 515 as follows:

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

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

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

0
2. Revise the section contents of Part 515 to read as follows:

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

Subpart A--General
Sec.
515.1 Scope.
515.2 Definitions.
515.3 License; when required.
515.4 License; when not required.
515.5 Forms and fees.
Subpart B--Eligibility and Procedure for Licensing and Registration
515.11 Basic requirements for licensing; eligibility.
515.12 Application for license.
515.13 Investigation of applicants.
515.14 Issuance, renewal, and use of license.
515.15 Denial of license.
515.16 Revocation or suspension of license or registration.
515.17 Hearing procedures governing denial and revocation or 
suspension of OTI license or registration.
515.18 Application after revocation or denial.
515.19 Registration of foreign-based non-vessel-operating common 
carriers.
515.20 Changes in organization.
Subpart C--Financial Responsibility Requirements; Claims Against Ocean 
Transportation Intermediaries
515.21 Financial responsibility requirements.
515.22 Proof of financial responsibility.
515.23 Claims against an ocean transportation intermediary.
515.24 Agent for service of process.
515.25 Filing of proof of financial responsibility.
515.26 Termination of financial responsibility.
515.27 Proof of compliance--NVOCC.
Subpart D--Duties and Responsibilities of Ocean Transportation 
Intermediaries; Reports to Commission
515.31 General duties.
515.32 Freight forwarder duties.
515.33 Records required to be kept.
515.34 Regulated Persons Index.
Subpart E--Freight Forwarding Fees and Compensation
515.41 Forwarder and principal; fees.
515.42 Forwarder and carrier; compensation.
515.91 OMB control number assigned pursuant to the Paperwork 
Reduction Act.
Appendix A to Part 515--Ocean Transportation Intermediary (OTI) Bond 
Form [Form-48]
Appendix B to Part 515--Ocean Transportation Intermediary (OTI) 
Insurance Form [Form-67]
Appendix C to Part 515--Ocean Transportation Intermediary (OTI) 
Guaranty Form [Form-68]
Appendix D to Part 515--Ocean Transportation Intermediary (OTI) 
Group Bond Form [FMC-69]
Appendix E to Part 515--Optional Rider for Additional NVOCC 
Financial Responsibility (Optional Rider to Form FMC-48] [FORM 48A]
Appendix F to Part 515--Optional Rider for Additional NVOCC 
Financial Responsibility for Group Bonds (Optional Rider to Form 
FMC-69]

Subpart A--General

0
3. Revise Sec.  515.1(b) to read as follows:


Sec.  515.1  Scope.

* * * * *
    (b) Information obtained under this part is used to determine the 
qualifications of ocean transportation intermediaries and their 
compliance with shipping statutes and regulations. Failure to follow 
the provisions of this part may result in denial, revocation or 
suspension of an ocean transportation intermediary license or 
registration. Persons operating without the proper license or 
registration may be subject to civil penalties not to exceed $8,000 for 
each such violation unless the violation is willfully and knowingly 
committed, in which case the amount of the civil penalty may not exceed 
$40,000 for each violation; for other violations of the provisions of 
this part, the civil penalties range from $8,000 to $40,000 for each 
violation (46 U.S.C. 41107-41109). Each day of a continuing violation 
shall constitute a separate violation.
0
4. Revise Sec.  515.2 to read as follows:


Sec.  515.2  Definitions.

    The terms used in this part are defined as follows:
    (a) Advertisement means any written or electronic communication to 
the public, or a portion thereof, to provide, perform or conduct ocean 
transportation services in connection with a direct or indirect offer 
or sale of ocean transportation intermediary services. Advertisement 
includes publication of a Web site, posting on the Internet or listing 
in an electronic database.
    (b) Beneficial interest includes a lien or interest in or right to 
use, enjoy, profit, benefit, or receive any advantage, either 
proprietary or financial, from the whole or any part of a shipment of 
cargo where such interest arises from the financing of the shipment or 
by operation of law, or by agreement, express or implied. The term 
``beneficial interest'' shall not include any obligation in favor of an 
ocean transportation intermediary arising solely by reason of the 
advance of out-of-pocket expenses incurred in dispatching a shipment.
    (c) Branch office means any office in the United States established 
by or maintained by or under the control of a licensee for the purpose 
of rendering intermediary services, which office is located at an 
address different from that of the licensee's designated home office.
    (d) Commission means the Federal Maritime Commission.
    (e) Common carrier means any person holding itself out to the 
general public to provide transportation by water of passengers or 
cargo between the United States and a foreign country for compensation 
that:
    (1) Assumes responsibility for the transportation from the port or 
point of receipt to the port or point of destination, and
    (2) Utilizes, for all or part of that transportation, a vessel 
operating on the high seas or the Great Lakes between a port in the 
United States and a port in a foreign country, except that the term 
does not include a common carrier engaged in ocean transportation by 
ferry boat, ocean tramp, chemical parcel tanker, or by a vessel when 
primarily engaged in the carriage of perishable agricultural 
commodities
    (i) If the common carrier and the owner of those commodities are 
wholly-owned, directly or indirectly, by a person primarily engaged in 
the marketing and distribution of those commodities, and
    (ii) Only with respect to those commodities.
    (f) Compensation means payment by a common carrier to a freight 
forwarder for the performance of services as specified in Sec.  
515.2(h).
    (g) Freight forwarding fee means charges billed by an ocean freight

[[Page 32965]]

forwarder to a shipper, consignee, seller, purchaser, or any agent 
thereof, for the performance of freight forwarding services.
    (h) Freight forwarding services refers to the dispatching of 
shipments on behalf of others, in order to facilitate shipment by a 
common carrier, which may include, but are not limited to, the 
following:
    (1) Ordering cargo to port;
    (2) Preparing and/or processing export documents, including the 
required `electronic export information';
    (3) Booking, arranging for or confirming cargo space;
    (4) Preparing or processing delivery orders or dock receipts;
    (5) Preparing and/or processing common carrier bills of lading or 
other shipping documents;
    (6) Preparing or processing consular documents or arranging for 
their certification;
    (7) Arranging for warehouse storage;
    (8) Arranging for cargo insurance;
    (9) Assisting with clearing shipments in accordance with United 
States Government export regulations;
    (10) Preparing and/or sending advance notifications of shipments or 
other documents to banks, shippers, or consignees, as required;
    (11) Handling freight or other monies advanced by shippers, or 
remitting or advancing freight or other monies or credit in connection 
with the dispatching of shipments;
    (12) Coordinating the movement of shipments from origin to vessel; 
and
    (13) Giving expert advice to exporters concerning letters of 
credit, other documents, licenses or inspections, or on problems 
germane to the cargoes' dispatch.
    (i) From the United States means oceanborne export commerce from 
the United States, its territories, or possessions, to foreign 
countries.
    (j) Licensee is any person licensed by the Federal Maritime 
Commission as an ocean transportation intermediary.
    (k) Non-vessel-operating common carrier services refers to the 
provision of transportation by water of cargo between the United States 
and a foreign country for compensation without operating the vessels by 
which the transportation is provided, and may include, but are not 
limited to, the following:
    (1) Purchasing transportation services from a common carrier and 
offering such services for resale to other persons;
    (2) Payment of port-to-port or multimodal transportation charges;
    (3) Entering into affreightment agreements with underlying 
shippers;
    (4) Issuing bills of lading or other shipping documents;
    (5) Assisting with clearing shipments in accordance with U.S. 
government regulations;
    (6) Arranging for inland transportation and paying for inland 
freight charges on through transportation movements;
    (7) Paying lawful compensation to ocean freight forwarders;
    (8) Coordinating the movement of shipments between origin or 
destination and vessel;
    (9) Leasing containers;
    (10) Entering into arrangements with origin or destination agents;
    (11) Collecting freight monies from shippers and paying common 
carriers as a shipper on NVOCC's own behalf.
    (l) Ocean common carrier means a common carrier that operates, for 
all or part of its common carrier service, a vessel on the high seas or 
the Great Lakes between a port in the United States and a port in a 
foreign country, except that the term does not include a common carrier 
engaged in ocean transportation by ferry boat, ocean tramp, or chemical 
parcel-tanker.
    (m) Ocean transportation intermediary (OTI) means an ocean freight 
forwarder or a non-vessel-operating common carrier. For the purposes of 
this part, the term
    (1) Ocean freight forwarder (OFF) means a person that--
    (i) In the United States, dispatches shipments from the United 
States via a common carrier and books or otherwise arranges space for 
those shipments on behalf of shippers; and
    (ii) Processes the documentation or performs related activities 
incident to those shipments; and
    (2) Non-vessel-operating common carrier (NVOCC) means a common 
carrier that does not operate the vessels by which the ocean 
transportation is provided, and is a shipper in its relationship with 
an ocean common carrier.
    (n) Person means individuals, corporations, companies, including 
limited liability companies, associations, firms, partnerships, 
societies and joint stock companies existing under or authorized by the 
laws of the United States or of a foreign country.
    (o) Principal, with respect to a licensed ocean freight forwarder 
employed to facilitate ocean transportation of property, refers to the 
shipper, consignee, seller or purchaser of such property, and to anyone 
acting on behalf of such shipper, consignee, seller or purchaser.
    (p) Qualifying individual (QI) means an individual who (1) is an 
employee of a licensed OTI, (2) is at least twenty-one (21) years of 
age, (3) is responsible for general supervision of the licensee's OTI 
operations, and (4) meets the experience and character requirements of 
section 19 of the Shipping Act (46 U.S.C. 40901-40904) and this Part.
    (q) Reduced forwarding fees means charges to a principal for 
forwarding services that are below the licensed ocean freight 
forwarder's usual charges for such services.
    (r) Registered non-vessel-operating common carrier (registered 
NVOCC) means an NVOCC whose primary place of business is located 
outside the United States and who elects not to become licensed as an 
NVOCC, but to register with the Commission as provided in Sec.  515.19, 
post a bond or other surety in the required amount and publish a tariff 
as required by 46 CFR Part 520.
    (s) Shipment means all of the cargo carried under the terms of a 
single bill of lading.
    (t) Shipper means:
    (1) A cargo owner;
    (2) The person for whose account the ocean transportation is 
provided;
    (3) The person to whom delivery is to be made;
    (4) A shippers' association; or
    (5) A non-vessel-operating common carrier that accepts 
responsibility for payment of all charges applicable under the tariff 
or service contract.
    (u) Shipping Act means the Shipping Act of 1984, as amended. 46 
U.S.C. 40101-41309.
    (v) Special contract is a contract for ocean freight forwarding 
services which provides for a periodic lump sum fee.
    (w) Transportation-related activities which are covered by the 
financial responsibility obtained pursuant to this part include, to the 
extent involved in the foreign commerce of the United States, any 
activity performed by an ocean transportation intermediary that is 
necessary or customary in the provision of transportation services to a 
customer, but are not limited to the following:
    (1) For an ocean transportation intermediary operating as an ocean 
freight forwarder, the freight forwarding services enumerated in Sec.  
515.2(h), and
    (2) For an ocean transportation intermediary operating as a non-
vessel-operating common carrier, the non-vessel-operating common 
carriers services enumerated in Sec.  515.2(k).
    (x) United States includes the several States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the 
Northern Marianas, and all other United States territories and 
possessions.
0
5. Revise Sec.  515.3 to read as follows:

[[Page 32966]]

Sec.  515.3  License; when required.

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


Sec.  515.4  License; when not required.

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


Sec.  515.5  Forms and fees.

    (a) Forms. License Application Form FMC-18 Rev., Application for 
Renewal of Ocean Transportation Intermediary License Form FMC---------, 
Foreign Unlicensed Registration Form FMC-------, and financial 
responsibility Forms FMC-48, FMC-67, FMC-68, FMC-69 may be obtained 
from the Commission's Web site at http://www.fmc.gov, from the 
Director, Bureau of Certification and Licensing, Federal Maritime 
Commission, Washington, DC 20573, or from any of the Commission's Area 
Representatives.
    (b) Filing of license applications and registration forms. All 
applications and forms are to be filed electronically unless a waiver 
is granted to file in paper form. A waiver request must be submitted in 
writing to the Director, Bureau of Certification and Licensing, 800 
North Capitol Street NW., Washington, DC 20573, and must demonstrate 
that electronic filing imposes an undue burden on the applicant or 
registrant. The director, or a designee, will render a decision on the 
request and notify the requestor within two (2) business days of 
receiving the request. If a waiver request is granted, the approval 
will provide instructions for submitting a paper application or 
registration. If the waiver request is denied, a statement of reasons 
for the denial will be provided.
    (c) Fees. (1) All fees shall be paid by money order, certified, 
cashier's, or personal check payable to the order of the ``Federal 
Maritime Commission,'' or by other means authorized by the Director of 
the Commission's Office of Budget and Finance. Applications or 
registrations shall be rejected unless the applicable fee and any bank 
charges assessed against the Commission are received by the Commission 
within ten (10) business days after submission of the application or 
registration. In any instance where an application has been processed 
in whole or in part, the fee will not be refunded.
    (2) Fees under this Part 515 shall be as follows:
    (i) Application for new OTI license as required by Sec.  515.12(a): 
automated filing $------; paper filing pursuant to waiver $------.
    (ii) Application for change to OTI license or license transfer as 
required by Sec.  515.20(a) and (b): automated filing $------; paper 
filing pursuant to waiver $------.
    (iii) Application for renewal of OTI license as required by Sec.  
515.14(d): automated filing $------; paper filing pursuant to waiver 
$------.
    (iv) New and updated foreign NVOCC registration as required by 
Sec.  515.19(a): automated filing $------; paper filing pursuant to 
waiver $------.
    (v) Regulated Persons Index as provided in Sec.  515.34: Purchase 
of a copy of the Index $------.
0
8. Revise the heading for subpart B by adding at the end ``and 
Registration'' to read as follows:

Subpart B--Eligibility and Procedure for Licensing and Registration

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


Sec.  515.11  Basic requirements for licensing; eligibility.

    (a) Necessary qualifications. To be eligible for an ocean 
transportation intermediary license, the applicant must demonstrate to 
the Commission that:
    (1) It possesses the necessary experience, that is, that its QI has 
a minimum of three (3) years of relevant and diverse experience in 
ocean transportation intermediary activities in the United States, and 
that, through the officers, directors, and principal shareholders of a 
corporation, the members, managers, or officers of an LLC, or the 
partners of a partnership, and through the qualified individual, the 
applicant has the necessary character to render ocean transportation 
intermediary services. A principal shareholder is defined as a 
shareholder who owns directly, indirectly, or constructively 5 percent 
or more of the total combined voting power of all classes of stock 
entitled to vote or who owns directly, indirectly, or constructively 5 
percent or more of the total value of all classes of stock.
    (2) The three years of OTI experience required by this section may 
not be met by OTI experience acquired while working for an unlicensed, 
unbonded or unregistered OTI.
    (3) In addition to information provided by the applicant and its 
references, the Commission may consider all information relevant to 
determining whether an applicant has the necessary character to render 
ocean transportation intermediary services, including but not limited 
to, information regarding: violations of any shipping laws, or statutes 
relating to the import, export or transport of merchandise in 
international trade;

[[Page 32967]]

operating as an OTI without a license or registration; state and 
federal felonies and misdemeanors; voluntary and non-voluntary 
bankruptcies not discharged; tax liens and other court and 
administrative judgments and proceedings; compliance with immigration 
status requirements described in 49 CFR 1572.105; denial, revocation, 
or suspension of a Transportation Worker Identification Credential 
under 49 CFR 1572; and the denial, revocation, or suspension of a 
customs broker's license under 19 CFR Part 111. The required OTI 
experience of the QI of a foreign-based NVOCC seeking to become 
licensed under this part (foreign-based licensed NVOCC) may be 
experience acquired in the U.S. or a foreign country with respect to 
shipments in the United States oceanborne foreign commerce.
    (b) Qualifying individual. The following individuals must qualify 
the applicant for a license:
    (1) Sole proprietorship. The applicant sole proprietor.
    (2) Partnership. One of the partners responsible for the general 
supervision of the partnership's OTI operations.
    (3) Corporation. One of the corporate officers responsible for the 
general supervision of the corporation's OTI operations.
    (4) Limited liability company. One of the members or managers, or 
an individual in an equivalent position in the LLC, as expressly set 
forth in the LLC operating agreement, who is responsible for the 
general supervision of the LLC's OTI operations. If permitted by the 
operating agreement, an officer of an LLC who is responsible for the 
general supervision of the LLC's OTI operations may serve as the QI.
    (c) Affiliates of intermediaries. An independently qualified 
applicant may be granted a separate license to carry on the business of 
providing ocean transportation intermediary services even though it is 
associated with, under common control with, or otherwise related to 
another ocean transportation intermediary through stock ownership or 
common directors or officers, if such applicant submits: a separate 
application and fee, and a valid instrument of financial responsibility 
in the form and amount prescribed under Sec.  515.21. The QI of one 
active licensee shall not also be designated as the QI of another ocean 
transportation intermediary licensee, unless both entities are commonly 
owned or where one directly controls the other.
    (d) Common carrier. A common carrier or agent thereof which meets 
the requirements of this part may be licensed as an ocean freight 
forwarder to dispatch shipments moving on other than such carrier's own 
bills of lading subject to the provisions of Sec.  515.42(g).
    (e) Foreign-based licensed NVOCC. A foreign-based NVOCC that elects 
to obtain a license must establish a presence in the United States by 
opening an unincorporated office that is resident in the United States, 
is qualified to do business where it is located and is staffed and 
operated by a full-time bona fide employee.
0
10. Revise Sec.  515.12 to read as follows:


Sec.  515.12  Application for license.

    (a) Application and forms. (1) Any person who wishes to obtain a 
license to operate as an ocean transportation intermediary shall submit 
electronically (absent a waiver pursuant to Sec.  515.5(b)) a completed 
application Form FMC-18 Rev. (Application for a License as an Ocean 
Transportation Intermediary) in accordance with the automated FMC-18 
filing system and corresponding instructions. A filing fee shall be 
paid, as required under Sec.  515.5(c). Notice of filing of each 
application shall be published on the Commission's Web site, 
www.fmc.gov, and shall state the name and address of the applicant and 
the name and address of the QI. If the applicant is a corporation or 
partnership, the names of the officers or partners thereof may be 
published. For an LLC, the names of the managers, members or officers, 
as applicable, may be published.
    (2) An individual who is applying for a license as a sole 
proprietor must complete the following certification:
    I, -------- (Name)--------, certify under penalty of perjury under 
the laws of the United States, that I have not been convicted, after 
September 1, 1989, of any Federal or state offense involving the 
distribution or possession of a controlled substance, or that if I have 
been so convicted, I am not ineligible to receive Federal benefits, 
either by court order or operation of law, pursuant to 21 U.S.C. 862.
    (b) Rejection. Any application which appears upon its face to be 
incomplete or to indicate that the applicant fails to meet the 
licensing requirements of the Act, or the Commission's regulations, may 
be rejected and a notice shall be sent to the applicant, together with 
an explanation of the reasons for rejection, and the filing fee shall 
be refunded in full. Persons who have had their applications rejected 
may submit a new Form FMC-18 at any time, together with the required 
filing fee.
    (c) Failure to provide necessary information and documents. In the 
event an applicant fails to provide documents or information necessary 
to complete processing of its application, notice will be sent to the 
applicant identifying the necessary information and documents and 
establishing a date for submission by the applicant. Failure of the 
applicant to submit the identified materials by the established date 
will result in the closing of its application without further 
processing. In the event an application is closed as a result of the 
applicant's failure to provide information or documents necessary to 
complete processing, the filing fee will not be returned. Persons who 
have had their applications closed under this section may reapply at 
any time by submitting a new application with the required filing fee.
    (d) Investigation. Each applicant shall be investigated in 
accordance with Sec.  515.13.
    (e) Changes in fact. Each applicant shall promptly advise of any 
material changes in the facts submitted in the application. Any 
unreported change may delay the processing and investigation of the 
application and result in rejection, closing, or denial of the 
application.
0
11. In Sec.  515.14, revise the section heading, revise paragraph (b), 
and add paragraphs (c) and (d):


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

* * * * *
    (b) To whom issued. The Commission will issue a license only in the 
name of the applicant, whether the applicant is a sole proprietorship, 
a partnership, a corporation, or limited liability company. A license 
issued to a sole proprietor doing business under a trade name shall be 
in the name of the sole proprietor, indicating the trade name under 
which the licensee will be conducting business. Only one license shall 
be issued to any applicant regardless of the number of names under 
which such applicant may be doing business, and except as otherwise 
provided in this part, such license is limited exclusively to use by 
the named licensee and shall not be transferred without prior 
Commission approval to another person.
    (c) Licenses shall be issued for an initial period of two (2) 
years. Thereafter, licenses will be renewed for sequential two year 
periods upon successful completion of the renewal process in paragraph 
(d) of this section.
    (d) License renewal process. (1) The licensee shall submit to the 
Director of the Bureau of Certification and Licensing (BCL) a completed 
Form FMC------- (Application for Renewal of Ocean Transportation 
Intermediary License) and the required license

[[Page 32968]]

renewal fee no later than sixty (60) days prior to the expiration date 
set forth on its license. Upon successful completion of the renewal 
process, the Commission shall issue a new license bearing an expiration 
date two (2) years later on the same day and month on which the license 
was originally issued. The expiration date will remain the same for 
subsequent renewals irrespective of the date on which the license 
renewal is submitted or when the renewed license is issued by the 
Commission, unless another expiration date is assigned by the 
Commission.
    (2) Where information provided in an OTI's renewal form, Form FMC-
------, is changed from that set out in its current Form FMC-18 and 
requires Commission approval pursuant to Sec.  515.20, the licensee 
must promptly submit a request for such approval on Form FMC-18 
together with the required filing fee. The licensee may continue to 
operate as an ocean transportation intermediary during the pendency of 
the Commission's approval process.
    (3) Though the foregoing license renewal process is not intended to 
result in a re-evaluation of a licensee's character, the Commission may 
review a licensee's character at any time, including at the time of 
renewal, based upon information received from the licensee or other 
sources.
0
12. In Sec.  515.15, revise paragraph (c) to read as follows:


Sec.  515.15  Denial of license.

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


Sec.  515.16  Revocation or suspension of license.

    (a) Grounds. Except for the automatic revocation for termination of 
proof of financial responsibility under Sec.  515.26, a license may be 
revoked or suspended after notice and an opportunity for a hearing 
under the procedures of Sec.  515.17. The notice of revocation or 
suspension will provide, in detail, a statement of the facts supporting 
the action. The licensee may request a hearing on the proposed 
revocation or suspension by submitting to the Commission's Secretary, 
within twenty (20) days of the date of the notice, a statement of 
reasons why the license should not be revoked or suspended. Such 
hearing shall be provided pursuant to the procedures contained in Sec.  
515.17. Otherwise, the action regarding the license will become 
effective. A license may be revoked or suspended for any of the 
following reasons:
    (1) Violation of any provision of the Act, or any other statute or 
Commission order or regulation related to carrying on the business of 
an ocean transportation intermediary;
    (2) Failure to respond to any lawful order or inquiry by the 
Commission or an authorized Commission representative;
    (3) Making a materially false or misleading statement to the 
Commission in connection with an application for, or amendment to, or 
renewal of, a license;
    (4) Failure to honor financial obligations to the Commission;
    (5) Failure to timely renew a license;
    (6) In the case of an NVOCC, failure to file, within 120 days of 
the notification that its license application has been approved, or 
failure to maintain a Form FMC-1 and a tariff in compliance with 46 CFR 
Part 520;
    (7) Knowingly and willfully processing, booking, or accepting cargo 
from, or transporting cargo for the account of an NVOCC that is not 
licensed or registered, or has not provided proof of financial 
responsibility or published an effective tariff;
    (8) Additionally, a license may be suspended or revoked where the 
Commission determines the licensee is not qualified to render OTI 
services.
    (9) In the case of a foreign-based licensed NVOCC, failure to 
establish or maintain an unincorporated office that is resident in the 
United States, is qualified to do business where it is located and is 
operated by a bona fide employee pursuant to section 515.11(e).
    (10) Any act, omission or matter that would provide the basis for 
denial of a license to a new applicant pursuant to Sec.  515.15.
    (b) Notice. The Commission shall publish on the Commission's Web 
site, www.fmc.gov, a notice of each revocation and suspension.
0
14. Redesignate Sec.  515.17 as Sec.  515.18.
0
15. Add new Sec.  515.17 to read as follows:


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

    (a) Hearing requests. All hearing requests under Sec.  515.15 and 
Sec.  515.16 shall be submitted to the Commission's Secretary. Such 
requests shall be referred to the Office of the General Counsel to 
designate a hearing officer for review and decision under the 
procedures established in this section. Upon receipt of a request for 
hearing, the hearing officer shall notify BCL, and BCL will provide to 
the hearing officer a copy of the notice given to the applicant or 
licensee and a copy of BCL materials supporting the notice. The hearing 
officer will then issue a notice advising the applicant or, in the case 
of a revocation or suspension of the license, of the right to submit 
information and documents, including affidavits of fact and written 
argument, in support of an OTI application or continuation of a current 
OTI license.
    (b) Notice. The notice shall establish a date no later than thirty 
(30) days from the date of the notice for submission of all supporting 
materials by the applicant or licensee. The notice shall also provide 
that the Bureau of Certification and Licensing may submit responsive 
materials no later than twenty (20) days from the date the applicant or 
licensee submitted its materials. BCL's notice and materials supporting 
its notice, the submission of the applicant or licensee and the 
responsive submission of BCL shall constitute the entire record upon 
which the hearing officer's decision shall be based. The hearing 
officer's decision shall be issued within forty (40) days after the 
closing of the record.
0
16. Add new Sec.  515.19 to read as follows:


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

    (a) Any person whose primary place of business is located outside 
the United States that elects to operate as a registered NVOCC in the 
United States foreign trade shall register with the Commission by 
submitting to the Director of the Bureau of Certification and Licensing 
a completed registration form, Form FMC------- (Foreign-based NVOCC 
Registration/Renewal), accompanied by the fee required by Sec.  
515.5(c). A notice of each registration shall be published on the 
Commission's Web site www.fmc.gov. It is a violation of the 
Commission's regulations implementing the Shipping Act for a foreign-
based unlicensed non-vessel-

[[Page 32969]]

operating common carrier to provide NVOCC services in the U.S. foreign 
trade without a valid registration and an effective tariff.
    (b) A registration form which appears, upon submission, to be 
substantially incomplete may be rejected. If rejected, a notice, 
together with the reasons therefore, shall be sent to the foreign-based 
NVOCC and the filing fee shall be refunded. Persons who have had a 
registration rejected may submit a new registration at any time 
together with the applicable fee.
    (c) Registrations are complete upon receipt of a registration form 
which meets the requirements of this section and upon evidence of 
financial responsibility being furnished pursuant to Sec.  515.21.
    (d) Registrations shall be effective for a period of two (2) years. 
Thereafter, registrations will be renewed for sequential two year 
periods upon submission of an updated registration form.
    (e) A tariff shall not be published and NVOCC service shall not 
commence until the Commission receives valid proof of financial 
responsibility from the registrant and a Form FMC-1 has been filed.
    (f) Registered NVOCCs must report in writing to BCL any changes to: 
Legal name(s) or trade name(s); principal place of business address 
(including telephone number, facsimile number); contact person and 
email address (including physical address if different from principal 
place of business); name of resident agent(s) (including physical 
address, mailing address, email address, telephone and facsimile 
number(s), and contact person) in the United States for receipt of 
service of judicial and administrative process (including subpoenas).
    (g) Termination or suspension of the registration of a registered 
NVOCC.
    (1) Grounds. Except when, under Sec.  515.26, a registration 
becomes automatically ineffective for a failure of a registered NVOCC 
to maintain proof of financial responsibility on file with the 
Commission, the effectiveness of such a registration may be terminated 
or suspended, after notice and the opportunity for a hearing, pursuant 
to the procedure set forth in paragraph (g)(2) of this section, for any 
of the following reasons:
    (i) Violation of any provision of the Act, or any other statute or 
Commission order or regulation related to carrying on the business of 
an ocean transportation intermediary;
    (ii) Failure to respond to any lawful order or inquiry by the 
Commission or an authorized Commission representative;
    (iii) Making a materially false or misleading statement to the 
Commission in connection with a registration or renewal thereof;
    (iv) Failure to honor financial obligations to the Commission;
    (v) Failure to timely renew a registration;
    (vi) Failure to maintain a Form FMC-1 and a tariff in compliance 
with 46 CFR Part 520.
    (vii) Knowingly and willfully processing, booking, or accepting 
cargo from, or transporting cargo for the account of, an NVOCC that is 
not licensed or registered, or has not provided proof of financial 
responsibility or published an effective tariff.
    (viii) Failure to designate and maintain a person in the United 
States as legal agent for the receipt of judicial and administrative 
process, including subpoenas, as required by Sec.  515.24.
    (2) Hearing procedure. Registrants may request a hearing for 
terminations or suspensions of the effectiveness of their registrations 
following the same procedures set forth in Sec.  515.17 (governing 
hearing requests for denials, revocations and suspensions of licenses).
    (3) Notice. The Commission shall publish on the Commission's Web 
site, www.fmc.gov, a notice of each termination or suspension.
0
17. Re-designate Sec.  515.18 as Sec.  515.20 and revise to read as 
follows:


Sec.  515.20  Changes in organization.

    (a) Licenses. The following changes in an existing licensee's 
organization require prior approval of the Commission, and application 
for such status change or license transfer shall be made on Form FMC-
18, filed with the Commission's Bureau of Certification and Licensing, 
and accompanied by the fee required under Sec.  515.5(c):
    (1) Transfer of a corporate license to another person;
    (2) Change in ownership of a sole proprietorship;
    (3) Any change in the business structure of a licensee from or to a 
sole proprietorship, partnership, limited liability company, or 
corporation, whether or not such change involves a change in ownership;
    (4) Any change in a licensee's name; or
    (5) Change in the identity or status of the designated QI, except 
as described in paragraphs (b) and (c) of this section.
    (b) Operation after death of sole proprietor. In the event that the 
owner of a licensed sole proprietorship dies, the licensee's executor, 
administrator, heir(s), or assign(s) may continue operation of such 
proprietorship solely with respect to shipments for which the deceased 
sole proprietor had undertaken to act as an ocean transportation 
intermediary pursuant to the existing license, if the death is reported 
within 30 days to the Commission and to all principals and shippers for 
whom services on such shipments are to be rendered. The acceptance or 
solicitation of any other shipments is expressly prohibited until a new 
license has been issued. Applications for a new license by the 
executor, administrator, heir(s), or assign(s) shall be made on Form 
FMC-18, and shall be accompanied by the fee required under Sec.  
515.5(c).
    (c) Operation after retirement, resignation, or death of QI. When a 
partnership, LLC, or corporation has been licensed on the basis of the 
qualifications of one or more of the partners, members, managers or 
officers thereof, and such QI(s) (1) no longer serves as a full-time 
employee with the OTI or, (2) is no longer responsible for the general 
supervision of the licensee's OTI activities, the licensee shall report 
such change to the Commission within fifteen (15) business days. Within 
the same 15-day period, the licensee shall furnish to the Commission 
the name(s) and detailed intermediary experience of any other active 
partner(s), member(s), manager(s) or officer(s) who may qualify the 
licensee. Such QI(s) must meet the applicable requirements set forth in 
Sec.  515.11(a)-(c). The licensee may continue to operate as an ocean 
transportation intermediary while the Commission investigates the 
qualifications of the newly designated partner, member, manager, or 
officer.
    (d) Acquisition of one or more additional licensees. In the event a 
licensee acquires one or more additional licensees, for the purpose of 
merger, consolidation, or control, the acquiring licensee shall advise 
the Commission of such acquisition, including any change in ownership, 
within 30 days after such change occurs by submitting an amended Form 
FMC-18. No application fee is required when reporting this change.
    (e) Other changes. Other changes in material fact of a licensee 
shall be reported to the Commission within 30 days. Material changes 
include, but are not limited to: changes in business address; any 
criminal indictment or conviction of a licensee, QI, or officer; any 
voluntary or involuntary bankruptcy filed by or naming a licensee, QI, 
or officer; changes of five (5) percent or more of the common

[[Page 32970]]

equity ownership or voting securities of the OTI; or, the addition or 
reduction of one or more partners of a licensed partnership, one or 
more members or managers of a Limited Liability Company, or one or more 
branch offices. No fee shall be charged for reporting such changes.

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

0
18. In Sec.  515.21, revise paragraphs (a) (1)-(4) and (b), and add a 
new paragraph (e) to read as follows:


Sec.  515.21  Financial responsibility requirements.

    (a) * * *
    (1) Any person operating in the United States as an ocean freight 
forwarder as defined in Sec.  515.2(m)(1) shall furnish evidence of 
financial responsibility in the amount of $75,000.
    (2) Any person operating in the United States as an NVOCC as 
defined in Sec.  515.2(m)(2) shall furnish evidence of financial 
responsibility in the amount of $100,000.
    (3) Any registered NVOCC, as defined in section 515.2(r), shall 
furnish evidence of financial responsibility in the amount of $200,000. 
Such registered NVOCC shall be strictly responsible for the acts and 
omissions of its employees and agents, wherever they are located.
    (4) In the event the amount of the required bond, insurance or 
other surety, as described in (a)(1)-(a)(3) of this section, is drawn 
down pursuant to payment of a claim under Sec.  515.23, an OTI shall 
furnish to the Commission proof that the bond, insurance or other 
surety has been restored to the full required amount within sixty (60) 
days. No new OTI business shall be accepted until such time as the full 
amount of the financial responsibility has been restored. Failure to 
restore the value of the financial responsibility within sixty (60) 
days shall result in automatic license revocation or registration 
termination.
    (b) Group financial responsibility. When a group or association of 
ocean transportation intermediaries accepts liability for an ocean 
transportation intermediary's financial responsibility for such ocean 
transportation intermediary's transportation-related activities under 
the Act, the group or association of ocean transportation 
intermediaries shall file a group bond form, insurance form or guaranty 
form, clearly identifying each ocean transportation intermediary 
covered, before a covered ocean transportation intermediary may provide 
ocean transportation intermediary services. In such cases, a group or 
association must establish financial responsibility in an amount equal 
to the lesser of the amount required by paragraph (a) of this section 
for each member, or $4,000,000 in aggregate. A group or association of 
ocean transportation intermediaries may also file an optional bond 
rider as provided in Sec.  515.25(b).
* * * * *
    (e) Compliance with increased financial responsibility amounts. 
Individual OTIs and groups or associations must increase their 
financial responsibility coverage as provided in this section on or 
before [Insert number of days/or a date after increases become 
effective]. Such bond, proof of insurance or other surety may be 
increased by rider to their existing instruments of financial 
responsibility or by issuance of a new instrument of financial 
responsibility. OTIs that implement the increase by rider must ensure 
that their financial responsibility providers issue new instruments of 
financial responsibility at the amounts required by this section when 
such OTIs would otherwise renew with the provider their instruments of 
financial responsibility.
0
19. Revise Sec.  515.23 to read as follows:


Sec.  515.23  Claims against an ocean transportation intermediary.

    (a) Shippers, common carriers, and other affected persons may seek 
payment from the bond, insurance, or other surety maintained by an 
ocean transportation intermediary for damages arising out of its ocean 
transportation-related activities. The Commission may also seek payment 
of civil penalties assessed under section 13 of the Shipping Act (46 
U.S.C. 41107-41109).
    (b) Payment pursuant to a claim. (1) If a person does not file a 
complaint with the Commission pursuant to section 11 of the Shipping 
Act (46 U.S.C. 41301-41302, 41305-41307(a)), but otherwise seeks to 
pursue a claim against an ocean transportation intermediary bond, 
insurance, or other surety for damages arising from its transportation-
related activities, it shall attempt to resolve its claim with the 
financial responsibility provider prior to seeking payment on any 
judgment for damages obtained. When a claimant seeks payment under this 
section, it simultaneously shall notify both the financial 
responsibility provider and the ocean transportation intermediary of 
the claim by mail or courier service. The bond, insurance, or other 
surety may be available to pay such claim if:
    (i) The ocean transportation intermediary consents to payment, 
subject to review by the financial responsibility provider; or
    (ii) The ocean transportation intermediary fails to respond within 
forty-five (45) days from the date of the notice of the claim to 
address the validity of the claim, and the financial responsibility 
provider deems the claim valid.
    (2) If the parties fail to reach an agreement in accordance with 
paragraph (b)(1) of this section within forty-five (45) days of the 
date of the initial notification of the claim, the bond, insurance, or 
other surety shall be available to pay any final judgment for 
reparations ordered by the Commission or damages obtained from an 
appropriate court. The financial responsibility provider shall pay such 
judgment for damages only to the extent they arise from the 
transportation-related activities of the ocean transportation 
intermediary, ordinarily within forty-five (45) days, without requiring 
further evidence related to the validity of the claim; it may, however, 
inquire into the extent to which the judgment for damages arises from 
the ocean transportation intermediary's transportation-related 
activities.
    (c) Priority of claims. Claims against ocean transportation 
intermediary bonds, insurance or surety are prioritized in the 
following order:
    (1) Claims by shippers and consignees;
    (2) Caims by common carriers, ports, terminals, and other third 
party creditors; and
    (3) Claims for civil penalties by the Commission pursuant to its 
authority under the Shipping Act.
    (d) Payment of claims. The claims in paragraph (c)(1) deemed valid 
by the financial responsibility provider shall be paid in full, to the 
extent funds are available, before any claim in paragraphs (c)(2) or 
(c)(3) is paid. After the claims in paragraph (c)(1) have been paid, 
the claims in paragraph (c)(2) deemed valid by the financial 
responsibility provider shall be paid in full, to the extent funds are 
available, before any claim in paragraph (c)(3) is paid. After claims 
in paragraphs (c)(1) and (c)(2) have been paid, the claims in paragraph 
(c)(3) deemed valid by the financial responsibility provider shall be 
paid in full up to the remaining value of the bond, insurance or other 
surety.
    (e) Notices of court and other claims against OTIs.
    (1) Common carriers and marine terminal operators shall submit 
notices to the Commission of court and other transportation claims made 
by them that may result in payment of proceeds from such financial 
responsibility.

[[Page 32971]]

    (2) As provided in each financial responsibility instrument between 
an OTI and its financial responsibility provider(s), the issuing 
financial responsibility provider shall submit a notice of each claim, 
court action, or court judgment against the financial responsibility 
and each claim paid (including the amount) by the provider.
    (3) Notices described in paragraphs (1) and (2) of this section 
shall be promptly submitted to the BCL.
    (4) Notices required by this section shall include the name of the 
claimant, name of the court and case number assigned, and the name and 
license number of the OTI involved. Such notices may include or attach 
other information relevant to the claim.
    (5) Notices submitted shall be forwarded by BCL to the Commission's 
Secretary for publication on the Commission's Web site, www.fmc.gov.
    (6) Such notices are for public information only and should not be 
taken as an indication of the merits or outcome of any claim or as an 
indication of a violation of the Shipping Act, the Commission's 
regulations, or any other statute or regulation.
    (f) Initiation of priority claim mechanism. In order to provide 
reasonable time for multiple claims to be filed and paid applying the 
priorities established by this section:
    (1) Upon receipt of a claim against a financial responsibility 
instrument, the issuing financial responsibility provider shall refer 
to the notices listed on the Commission Web site pursuant to paragraph 
(e)(6) of this section to determine whether there are other claims 
against the instrument.
    (2) When two or more claims are made or noticed, the financial 
responsibility provider shall not pay any claim within the five (5) 
month period from the date it received the claim, pending receipt of 
other claims, if any.
    (3) When a financial responsibility provider receives a claim in an 
amount more than twenty (20) percent of the face value of the 
instrument and there are no additional claims noticed on the 
Commission's Web site, the issuing financial responsibility provider 
shall not make payment for a period of five (5) months from the date of 
the claim, pending receipt of other claims, if any.
    (4) When there are no additional claims noticed on the Commission's 
Web site at the time a claim is received by the issuing financial 
responsibility provider and after the issuing provider gives notice to 
BCL of the claim for posting on the Commission's Web site, the 
procedures contained in paragraph (b) of this section shall be 
followed. Provided, however, that, if during the time for processing 
the first claim under paragraph (b), an additional claim(s) is made to 
the issuing provider or notice of another claim is posted on the 
Commission's Web site, the issuing provider shall not make payment for 
a period of five (5) months after the date it receives the claim or 
notice of a claim is posted, whichever is later.
    (5) Payments made after the elapse of time provided in paragraphs 
(f)(1) through (4) shall be made applying the priorities established in 
this section.
    (g) The Federal Maritime Commission shall not serve as depository 
or distributor to third parties of bond, guaranty, or insurance funds 
in the event of any claim, judgment, or order for reparation.
    (h) Optional bond riders. The Federal Maritime Commission shall not 
serve as a depository or distributor to third parties of funds payable 
pursuant to optional bond riders described in Sec.  515.25(b).
0
20. In Sec.  515.24, revise paragraphs (b)-(d) to read as follows:


Sec.  515.24  Agent for service of process.

* * * * *
    (b) Service of administrative process, other than subpoenas, may be 
effected upon the legal agent by dispatching a copy of the document to 
be served by mail or courier service. Administrative subpoenas shall be 
served in accordance with Sec.  502.134 of this chapter.
    (c) If the designated legal agent cannot be served because of 
death, disability, unavailability, termination or expiration of the 
designation, or if a legal agent authorized to receive such service is 
not designated in compliance with this section, the Secretary of the 
Federal Maritime Commission will be deemed to be the legal agent for 
service of process. Any person serving the Secretary must also send to 
the ocean transportation intermediary, or group or association of ocean 
transportation intermediaries which provide financial coverage for the 
financial responsibilities of a member ocean transportation 
intermediary, by mail or courier service at the ocean transportation 
intermediary's, or group's, address published in its tariff, a copy of 
each document served upon the Secretary, and shall attest to that 
service at the time service is made upon the Secretary. For purposes of 
this paragraph, it is sufficient that a person seeking to serve process 
on an ocean transportation intermediary, or group of such 
intermediaries, affirm to the Commission's Secretary that: they have 
contacted, or attempted to contact, the designated agent to confirm 
whether it remained authorized to accept service of process; or, if no 
legal agent is designated in the tariff, that it has no knowledge of 
the identity of the ocean transportation intermediary's legal agent. 
Designation of the Commission's Secretary as the legal agent shall 
survive any cancellation of the OTI's license or tariff and shall 
continue for the entire period during which claims may be made under 
the OTI's financial responsibility instrument.
    (d) Designations of legal agent under paragraphs (a) and (b) of 
this section and provisions relating to service of process under 
paragraph (c) of this section shall be published in the ocean 
transportation intermediary's tariff, when required, in accordance with 
Part 520 of this chapter.
* * * * *
0
21. Revise Sec.  515.25 to read as follows:


Sec.  515.25  Filing of proof of financial responsibility.

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


Sec.  515.26  Termination of financial responsibility.

    No license or registration shall remain in effect unless valid 
proof of a financial responsibility instrument is maintained on file 
with the Commission. Upon receipt of notice of termination of such

[[Page 32972]]

financial responsibility or any reduction in available financial 
responsibility coverage under Sec.  515.21(a)(4), the Commission shall 
notify the concerned licensee, registrant, or registrant's legal agent 
in the United States, by mail or courier, at its last known address, 
that the Commission shall, without hearing or other proceeding, revoke 
the license or registration as of the termination date of the financial 
responsibility instrument, unless the licensee or registrant shall have 
submitted valid replacement proof of financial responsibility before 
such termination date. Replacement financial responsibility must bear 
an effective date no later than the termination date of the expiring 
financial responsibility instrument.
0
23. Revise Sec.  515.27 (a) and (b) to read as follows:


Sec.  515.27  Proof of compliance--NVOCC.

    (a) No common carrier shall knowingly and willfully transport cargo 
for the account of an NVOCC unless the carrier has determined that the 
NVOCC has a license or registration, a tariff, and financial 
responsibility as required by sections 8 (46 U.S.C. 40501-40503) and 19 
(46 U.S.C. 40901-40904) of the Shipping Act and this part.
    (b) A common carrier can obtain proof of an NVOCC's compliance with 
the tariff and financial responsibility requirements by:
    (1) Reviewing a copy of the tariff published by the NVOCC and in 
effect under part 520 of this chapter;
    (2) Consulting the Commission's Web site, www.fmc.gov, as provided 
in paragraph (d) below, to verify that the NVOCC has filed evidence of 
its financial responsibility; or
    (3) Any other appropriate procedure, provided that such procedure 
is set forth in the carrier's tariff.
* * * * *
0
24. Remove Appendices A, B, C, D, E, and F to Part 515 (each of which 
will be inserted at the end of part 515).

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

0
25. In Sec.  515.31, revise paragraphs (a)-(c) and (g)-(i), and add new 
paragraphs (j)-(l) to read as follows:


Sec.  515.31  General duties.

    (a) Licensees and registrants; names and numbers. An OTI shall 
carry on its business only under the name in which the license or the 
registration is issued, and only under its license or registration 
number as assigned by the Commission. An OTI shall include its name and 
license or registration number on all shipping documents and in all 
communications (including all written, printed and electronic 
communications). An OTI shall require that its agents include the OTI's 
name, and the OTI's license or registration number on all shipping 
documents issued by an agent on behalf of the OTI. When an entity 
issues shipping documents without including the name and license or 
registration number of a licensed or registered OTI principal, a 
rebuttable presumption arises that the entity is operating in its own 
name and not on behalf of a licensed or registered OTI principal.
    (b) Stationery and billing forms. The name and license or 
registration number of each OTI shall be permanently imprinted on the 
licensee's or registrant's office stationery and billing forms.
    (c) Use of license or registration by others; prohibition. No OTI 
shall permit its name, license, license number, registration, or 
registration number to be used by any person who is not an employee or 
an agent of the OTI. An entity that also provides OTI services in its 
own name and not on behalf of a licensed or registered OTI must be 
separately licensed under this part and must provide proof of its own 
financial responsibility and publish a tariff, if applicable. An OTI 
may not utilize an agent to provide OTI services in the United States 
unless the agent includes the OTI's name and license or registration 
number on all shipping documents issued by the agent on behalf of the 
OTI. A branch office of an OTI may use the license of the OTI provided 
that the address of the branch office has been reported to the 
Commission in Form FMC-18 or pursuant to Sec.  515.20(e).
* * * * *
    (g) Response to requests of Commission. Upon the request of any 
authorized representative of the Commission, an OTI shall make 
available promptly for inspection or reproduction all records and books 
of account in connection with its ocean transportation intermediary 
business, and shall respond promptly to any lawful inquiries by such 
representative. All OTIs are responsible for requiring that, upon the 
request of any authorized Commission representative, their agents make 
available all records and books of account relating to ocean 
transportation intermediary service provided by or for their 
principals, and respond promptly to any lawful inquiries by such 
representative.
    (h) Express written authority. No OTI shall endorse or negotiate 
any draft, check, or warrant drawn to the order of its OTI principal or 
shipper without the express written authority of such OTI principal or 
shipper.
    (i) Accounting to principal or shipper. An OTI shall account to its 
principal(s) or shipper(s) for overpayments, adjustments of charges, 
reductions in rates, insurance refunds, insurance monies received for 
claims, proceeds of C.O.D. shipments, drafts, letters of credit, and 
any other sums due such principal(s) or shipper(s).
    (j) Advertisements. (1) An OTI shall include its name and license 
or registration number on all advertisements, as defined in Sec.  
515.2(a), and shall require that its agents include the name and 
license or registration number of the OTI principal on all such 
advertisements.
    (2) An OTI shall not include false or misleading information in its 
advertisements and shall require that the advertisements of its agents 
similarly shall not include false or misleading information.
    (3) Evidence that an entity has offered, through advertisement in 
any medium, to provide, perform or conduct ocean transportation 
services gives rise to a rebuttable presumption that the entity has 
actually performed the services offered.
    (k) OTI agency agreements. Agency agreements between the OTI 
principal and its agent must be in writing, signed by the parties, and 
available to the Commission.
    (l) Prohibition. No person may advertise or hold out to provide OTI 
services unless that person holds a valid OTI license or is registered 
under this part.
0
26. Amend Sec.  515.32(b) by removing the reference ``sales.''
0
27. In Sec.  515.33(d), revise the introductory text and paragraph (d) 
to read as follows:


Sec.  515.33  Records to be kept.

    Each licensed or registered NVOCC and each licensed ocean freight 
forwarder shall maintain in an orderly and systematic manner, and keep 
current and correct, all records and books of account in connection 
with its OTI business. The licensed or registered NVOCC and each 
licensed freight forwarder may maintain these records in either paper 
or electronic form, which shall be readily available in usable form to 
the Commission; the electronically maintained records shall be no less 
accessible than if they were maintained in paper form. These 
recordkeeping requirements are independent of the

[[Page 32973]]

retention requirements of other federal agencies. In addition, each 
licensed freight forwarder must maintain the following records for a 
period of five years:
* * * * *
    (d) Special contracts. A true copy, or if oral, a true and complete 
memorandum, of every special arrangement or contract between a licensed 
freight forwarder and a principal, or modification or cancellation 
thereof.
0
28. Amend Sec.  515.34 by removing the reference ``$108'' and adding 
the reference ``the fee set forth in Sec.  515.5(c)'' in its place.

Subpart E--Freight Forwarding Fees and Compensation

0
29. Amend Sec.  515.41 as follows:
0
a. Remove paragraph (c);
0
b. Redesignate paragraph (d) as paragraph (c);
0
c. Revise and redesignate paragraph (e) as paragraph (d) to read as 
follows:


Sec.  515.41  Forwarder and principal; fees.

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


Sec.  515.42  Forwarder and carrier compensation; fees.

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

    The undersigned hereby certifies that neither it nor any holding 
company, subsidiary, affiliate, officer, director, agent or 
executive of the undersigned has a beneficial interest in this 
shipment; that it is the holder of valid FMC License No., issued by 
the Federal Maritime Commission and has performed the following 
services:
    (1) Engaged, booked, secured, reserved, or contracted directly 
with the carrier or its agent for space aboard a vessel or confirmed 
the availability of that space; and
    (2) Prepared and processed the ocean bill of lading, dock 
receipt, or other similar document with respect to the shipment.
* * * * *
    (f) Compensation; services performed by underlying carrier; 
exemptions. No licensed freight forwarder shall charge or collect 
compensation in the event the underlying common carrier, or its agent, 
has, at the request of such forwarder, performed any of the forwarding 
services set forth in Sec.  515.2(h), unless such carrier or agent is 
also a licensed freight forwarder, or unless no other licensed freight 
forwarder is willing and able to perform such services.
* * * * *
0
31. Redesignate Sec.  515.91 as Sec.  515.43 and revise it to read as 
follows:


Sec.  515.43  OMB control number assigned pursuant to the Paperwork 
Reduction Act.

    The Commission has received OMB approval for this collection of 
information pursuant to the Paperwork Reduction Act of 1995, as 
amended. In accordance with that Act, agencies are required to display 
a currently valid control number. The valid control number for this 
collection of information is [Insert Control Number].
0
32. Add Appendices A, B, C, D, E, and F to Part 515 to read as follows:

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

Form FMC-48

Federal Maritime Commission

    Ocean Transportation Intermediary (OTI) Bond (Section 19, 
Shipping Act of 1984 (46 U.S.C. 40901-40904)) ------ [indicate 
whether NVOCC or Freight Forwarder], as Principal (hereinafter 
``Principal''), and ------, as Surety (hereinafter ``Surety'') are 
held and firmly bound unto the United States of America in the sum 
of $------ for the payment of which sum we bind ourselves, our 
heirs, executors, administrators, successors and assigns, jointly 
and severally.
    Whereas, Principal operates as an OTI in the waterborne foreign 
commerce of the United States in accordance with the Shipping Act of 
1984, 46 U.S.C. 40101-41309, and, if necessary, has a valid tariff 
published pursuant to 46 CFR part 515 and 520, and pursuant to 
section 19 of the Shipping Act (46 U.S.C. 40901-40904), files this 
bond with the Commission;
    Whereas, this bond is written to ensure compliance by the 
Principal with section 19 of the Shipping Act (46 U.S.C. 40901-
40904), and the rules and regulations of the Federal Maritime 
Commission relating to evidence of financial responsibility for OTIs 
(46 CFR Part 515), this bond shall be available to pay any judgment 
obtained or any settlement made pursuant to a claim under 46 CFR 
515.23 for damages against the Insured arising from the Insured's 
transportation-related activities under the Shipping Act, or order 
for reparations issued pursuant to section 11 of the Shipping Act 
(46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed 
against the Principal pursuant to section 13 of the Shipping Act (46 
U.S.C. 41107-41109); provided, however, that the Surety's obligation 
for a group or association of OTIs shall extend only to such 
damages, reparations or penalties described herein as are not 
covered by another surety bond, insurance policy or guaranty held by 
the OTI(s) against which a claim or final judgment has been brought 
and that Surety's total obligation hereunder shall not exceed the 
amount per OTI provided in 46 CFR 515.21 or the amount per group or

[[Page 32974]]

association of OTIs provided for in 46 CFR 515.21 in aggregate.
    Now, Therefore, The condition of this obligation is that the 
penalty amount of this bond shall be available to pay any judgment 
or any settlement made pursuant to a claim under 46 CFR 515.23 for 
damages against the Principal arising from the Principal's 
transportation-related activities or order for reparations issued 
pursuant to section 11 of the 1984 Act (46 U.S.C. 41301-41302, 
41305-41307(a)), or any penalty assessed against the Principal 
pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109).
    This bond shall inure to the benefit of any and all persons who 
have obtained a judgment or a settlement made pursuant to a claim 
under 46 CFR Sec.  515.23 for damages against the Principal arising 
from its transportation-related activities or order of reparation 
issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-
41302, 41305-41307(a)), and to the benefit of the Federal Maritime 
Commission for any penalty assessed against the Principal pursuant 
to section 13 of the Shipping Act (46 U.S.C. 41107-41109). However, 
the bond shall not apply to shipments of used household goods and 
personal effects for the account of the Department of Defense or the 
account of federal civilian executive agencies shipping under the 
International Household Goods Program administered by the General 
Services Administration.
    The liability of the Surety shall not be discharged by any 
payment or succession of payments hereunder, unless and until such 
payment or payments shall aggregate the penalty amount of this bond, 
and in no event shall the Surety's total obligation hereunder exceed 
said penalty amount, as may be restored pursuant to 46 CFR 515.21, 
regardless of the number of claims or claimants.
    This bond is effective the ---- day of ------, ------ and shall 
continue in effect until discharged or terminated as herein 
provided. The Principal or the Surety may at any time terminate this 
bond by written notice to the Federal Maritime Commission at its 
office in Washington, DC. Such termination shall become effective 
thirty (30) days after receipt of said notice by the Commission. The 
Surety shall not be liable for any transportation-related activities 
of the Principal after the expiration of the 30-day period but such 
termination shall not affect the liability of the Principal and 
Surety for any event occurring prior to the date when said 
termination becomes effective.
    The Surety consents to be sued directly in respect of any bona 
fide claim owed by Principal for damages, reparations or penalties 
arising from the transportation-related activities under the 
Shipping Act of Principal in the event that such legal liability has 
not been discharged by the Principal or Surety after a claimant has 
obtained a final judgment (after appeal, if any) against the 
Principal from a United States Federal or State Court of competent 
jurisdiction and has complied with the procedures for collecting on 
such a judgment pursuant to 46 CFR 515.23, the Federal Maritime 
Commission, or where all parties and claimants otherwise mutually 
consent, from a foreign court, or where such claimant has become 
entitled to payment of a specified sum by virtue of a compromise 
settlement agreement made with the Principal and/or Surety pursuant 
to 46 CFR 515.23, whereby, upon payment of the agreed sum, the 
Surety is to be fully, irrevocably and unconditionally discharged 
from all further liability to such claimant; provided, however, that 
Surety's total obligation hereunder shall not exceed the amount set 
forth in 46 CFR 515.21, as applicable.
    The underwriting Surety will immediately notify the Director, 
Bureau of Certification and Licensing, Federal Maritime Commission, 
Washington, DC 20573, of all claims made, lawsuits filed, judgments 
rendered, and payments made against this bond.
    Signed and sealed this ---- day of ------, ------.
(Please type name of signer under each signature.)

-----------------------------------------------------------------------

Individual Principal or Partner

-----------------------------------------------------------------------

Business Address

-----------------------------------------------------------------------

Individual Principal or Partner

-----------------------------------------------------------------------

Business Address

-----------------------------------------------------------------------

Individual Principal or Partner

-----------------------------------------------------------------------

Business Address

-----------------------------------------------------------------------

Trade Name, If Any

-----------------------------------------------------------------------

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)

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

Form FMC-67

Federal Maritime Commission

Ocean Transportation Intermediary (OTI) Insurance Form Furnished as 
Evidence of Financial Responsibility Under 46 U.S.C. 40901-40904

    This is to certify, that the (Name of Insurance Company), 
(hereinafter ``Insurer'') of (Home Office Address of Company) has 
issued to (OTI or Group or Association of OTIs [indicate whether 
NVOCC(s) or Freight Forwarder(s)]) (hereinafter ``Insured'') of 
(Address of OTI or Group or Association of OTIs) a policy or 
policies of insurance for purposes of complying with the provisions 
of Section 19 of the Shipping Act of 1984 (46 U.S.C. 40901-40904) 
and the rules and regulations, as amended, of the Federal Maritime 
Commission, which provide compensation for damages, reparations or 
penalties arising from the transportation-related activities of 
Insured, and made pursuant to the Shipping Act of 1984 (46 U.S.C. 
40101-41309) (Shipping Act).
    Whereas, the Insured is or may become an OTI subject to the 
Shipping Act and the rules and regulations of the Federal Maritime 
Commission, or is or may become a group or association of OTIs, and 
desires to establish financial responsibility in accordance with 
section 19 of the Shipping Act (46 U.S.C. 40901-40904), files with 
the Commission this Insurance Form as evidence of its financial 
responsibility and evidence of a financial rating for the Insurer of 
Class V or higher under the Financial Size Categories of A.M. Best & 
Company or equivalent from an acceptable international rating 
organization on such organization's letterhead or designated form, 
or, in the case of insurance provided by Underwriters at Lloyd's, 
documentation verifying membership in Lloyd's, or, in the case of 
surplus lines insurers, documentation verifying inclusion on a 
current ``white list'' issued by the Non-Admitted Insurers' 
Information Office of the National Association of Insurance 
Commissioners.
    Whereas, the Insurance is written to assure compliance by the 
Insured with section 19 of the Shipping Act (46 U.S.C. 40901-40904), 
and the rules and regulations of the Federal Maritime Commission 
relating to evidence of financial responsibility for OTIs, this 
Insurance shall be available to pay any judgment obtained or any 
settlement made pursuant to a claim under 46 CFR 515.23 for damages 
against the Insured arising from the Insured's transportation-
related activities under the Shipping Act, or order for reparations 
issued pursuant to section 11 of the Shipping Act (46 U.S.C. 41301-
41302, 41305-41307(a)), or any penalty assessed against the Insured 
pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109); 
provided, however, that Insurer's obligation for a group or 
association of OTIs shall extend only to such damages, reparations 
or penalties described herein as are not covered by another 
insurance policy, guaranty or surety bond held by the OTI(s) against 
which

[[Page 32975]]

a claim or final judgment has been brought and that Insurer's total 
obligation hereunder shall not exceed the amount per OTI set forth 
in 46 CFR 515.21 or the amount per group or association of OTIs set 
forth in 46 CFR 515.21 in aggregate.
    Whereas, the Insurer certifies that it has sufficient and 
acceptable assets located in the United States to cover all 
liabilities of Insured herein described, this Insurance shall inure 
to the benefit of any and all persons who have a bona fide claim 
against the Insured pursuant to 46 CFR 515.23 arising from its 
transportation-related activities under the Shipping Act, or order 
of reparation issued pursuant to section 11 of the Shipping Act (46 
U.S.C. 41301-41302, 41305-41307(a)), and to the benefit of the 
Federal Maritime Commission for any penalty assessed against the 
Insured pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-
41109).
    The Insurer consents to be sued directly in respect of any bona 
fide claim owed by Insured for damages, reparations or penalties 
arising from the transportation-related activities under the 
Shipping Act, of Insured in the event that such legal liability has 
not been discharged by the Insured or Insurer after a claimant has 
obtained a final judgment (after appeal, if any) against the Insured 
from a United States Federal or State Court of competent 
jurisdiction and has complied with the procedures for collecting on 
such a judgment pursuant to 46 CFR 515.23, the Federal Maritime 
Commission, or where all parties and claimants otherwise mutually 
consent, from a foreign court, or where such claimant has become 
entitled to payment of a specified sum by virtue of a compromise 
settlement agreement made with the Insured and/or Insurer pursuant 
to 46 CFR 515.23, whereby, upon payment of the agreed sum, the 
Insurer is to be fully, irrevocably and unconditionally discharged 
from all further liability to such claimant; provided, however, that 
Insurer's total obligation hereunder shall not exceed the amount per 
OTI set forth in 46 CFR 515.21 or the amount per group or 
association of OTIs set forth in 46 CFR 515.21.
    The liability of the Insurer shall not be discharged by any 
payment or succession of payments hereunder, unless and until such 
payment or payments shall aggregate the penalty of the Insurance in 
the amount per member OTI set forth in 46 CFR 515.21, as may be 
restored pursuant thereto, or the amount per group or association of 
OTIs set forth in 46 CFR 515.21, as may be restored pursuant 
thereto, regardless of the financial responsibility or lack thereof, 
or the solvency or bankruptcy, of Insured.
    The insurance evidenced by this undertaking shall be applicable 
only in relation to incidents occurring on or after the effective 
date and before the date termination of this undertaking becomes 
effective. The effective date of this undertaking shall be ---- day 
of ------, ------, and shall continue in effect until discharged or 
terminated as herein provided. The Insured or the Insurer may at any 
time terminate the Insurance by filing a notice in writing with the 
Federal Maritime Commission at its office in Washington, DC. Such 
termination shall become effective thirty (30) days after receipt of 
said notice by the Commission. The Insurer shall not be liable for 
any transportation-related activities under the Shipping Act of the 
Insured after the expiration of the 30-day period but such 
termination shall not affect the liability of the Insured and 
Insurer for such activities occurring prior to the date when said 
termination becomes effective.
    Insurer or Insured shall immediately give notice to the Federal 
Maritime Commission of all lawsuits filed, judgments rendered, and 
payments made against the insurance policy.
    (Name of Agent) ---------------- domiciled in the United States, 
with offices located in the United States, at ------------ is hereby 
designated as the Insurer's agent for service of process for the 
purposes of enforcing the Insurance certified to herein.
    If more than one insurer joins in executing this document, that 
action constitutes joint and several liability on the part of the 
insurers.
    The Insurer will immediately notify the Director, Bureau of 
Certification and Licensing, Federal Maritime Commission, 
Washington, DC 20573, of all claims made, lawsuits filed, judgments 
rendered, and payments made against the Insurance.
    Signed and sealed this ---- day of ------, ------.
-----------------------------------------------------------------------

Signature of Official signing on behalf of Insurer

-----------------------------------------------------------------------

Type Name and Title of signer

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

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

Form FMC-68

Federal Maritime Commission

    Guaranty in Respect of Ocean Transportation Intermediary (OTI) 
Liability for Damages, Reparations or Penalties Arising from 
Transportation-Related Activities Under the Shipping Act of 1984 (46 
U.S.C. 40101-41309) (Shipping Act).
    1. Whereas ---------------- (Name of Applicant [indicate whether 
NVOCC or Freight Forwarder]) (hereinafter ``Applicant'') is or may 
become an Ocean Transportation Intermediary (``OTI'') subject to the 
Shipping Act of 1984 (46 U.S.C. 40101-41309) and the rules and 
regulations of the Federal Maritime Commission (FMC), or is or may 
become a group or association of OTIs, and desires to establish its 
financial responsibility in accordance with section 19 of the 
Shipping Act (46 U.S.C. 41107-41109), then, provided that the FMC 
shall have accepted, as sufficient for that purpose, the Applicant's 
application, supported by evidence of a financial rating for the 
Guarantor of Class V or higher under the Financial Size Categories 
of A.M. Best & Company or equivalent from an acceptable 
international rating organization on such rating organization's 
letterhead or designated form, or, in the case of Guaranty provided 
by Underwriters at Lloyd's, documentation verifying membership in 
Lloyd's, or, in the case of surplus lines insurers, documentation 
verifying inclusion on a current ``white list'' issued by the Non-
Admitted Insurers' Information Office of the National Association of 
Insurance Commissioners, the undersigned Guarantor certifies that it 
has sufficient and acceptable assets located in the United States to 
cover all damages arising from the transportation-related activities 
of the covered OTI as specified under the Shipping Act.
    2. Whereas, this Guaranty is written to ensure compliance by the 
Applicant with section 19 of the Shipping Act (46 U.S.C. 40901-
40904), and the rules and regulations of the Federal Maritime 
Commission relating to evidence of financial responsibility for OTIs 
(46 CFR Part 515), this guaranty shall be available to pay any 
judgment obtained or any settlement made pursuant to a claim under 
46 CFR 515.23 for damages against the Applicant arising from the 
Applicant's transportation-related activities under the Shipping 
Act, or order for reparations issued pursuant to section 11 of the 
Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any penalty 
assessed against the Applicant pursuant to section 13 of the 
Shipping Act (46 U.S.C. 41107-41109); provided, however, that the 
Guarantor's obligation for a group or association of OTIs shall 
extend only to such damages, reparations or penalties described 
herein as are not covered by another surety bond, insurance policy, 
or guaranty held by the OTI(s) against which a claim or final 
judgment has been brought and that Guarantor's total obligation 
hereunder shall not exceed the amount per OTI provided for in 46 CFR 
515.21, as may be restored pursuant thereto, or the amount per group 
or association of OTIs provided for in 46 CFR 515.21, as may be 
restored pursuant thereto, in aggregate.
    3. Now, Therefore, The condition of this obligation is that the 
penalty amount of this Guaranty shall be available to pay any 
judgment obtained or any settlement made pursuant to a claim under 
46 CFR 515.23 for damages against the Applicant arising from the 
Applicant's transportation-related activities or order for 
reparations issued pursuant to section 11 of the Shipping Act (46 
U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed against 
the Principal pursuant to section 13 of the Shipping Act (46 U.S.C. 
41107-41109).
    4. The undersigned Guarantor hereby consents to be sued directly 
in respect of any bona fide claim owed by Applicant for damages, 
reparations or penalties arising from Applicant's transportation-
related activities under the Shipping Act, in the event that such 
legal liability has not been discharged by the Applicant after any 
such claimant has obtained a final judgment (after appeal, if any) 
against the Applicant from a United States Federal or State Court of 
competent jurisdiction and has complied with the procedures for 
collecting on such a judgment pursuant to 46 CFR 515.23, the FMC, or 
where all parties and claimants otherwise mutually consent, from a 
foreign court, or where such claimant has become entitled to payment 
of a specified sum by virtue of a compromise settlement agreement

[[Page 32976]]

made with the Applicant and/or Guarantor pursuant to 46 CFR 515.23, 
whereby, upon payment of the agreed sum, the Guarantor is to be 
fully, irrevocably and unconditionally discharged from all further 
liability to such claimant. In the case of a guaranty covering the 
liability of a group or association of OTIs, Guarantor's obligation 
extends only to such damages, reparations or penalties described 
herein as are not covered by another insurance policy, guaranty or 
surety bond held by the OTI(s) against which a claim or final 
judgment has been brought.
    5. The Guarantor's liability under this Guaranty in respect to 
any claimant shall not exceed the amount of the guaranty; and the 
aggregate amount of the Guarantor's liability under this Guaranty 
shall not exceed the amount per OTI set forth in 46 CFR 515.21, as 
may be restored pursuant thereto, or the amount per group or 
association of OTIs set forth in 46 CFR 515.21 in aggregate, as may 
be restored pursuant thereto,.
    6. The Guarantor's liability under this Guaranty shall attach 
only in respect of such activities giving rise to a cause of action 
against the Applicant, in respect of any of its transportation-
related activities under the Shipping Act, occurring after the 
Guaranty has become effective, and before the expiration date of 
this Guaranty, which shall be the date thirty (30) days after the 
date of receipt by FMC of notice in writing that either Applicant or 
the Guarantor has elected to terminate this Guaranty. The Guarantor 
and/or Applicant specifically agree to file such written notice of 
cancellation.
    7. Guarantor shall not be liable for payments of any of the 
damages, reparations or penalties hereinbefore described which arise 
as the result of any transportation-related activities of Applicant 
after the cancellation of the Guaranty, as herein provided, but such 
cancellation shall not affect the liability of the Guarantor for the 
payment of any such damages, reparations or penalties prior to the 
date such cancellation becomes effective.
    8. Guarantor shall pay, subject to the limit of the amount per 
OTI set forth in 46 CFR 515.21, as may be restored pursuant thereto, 
directly to a claimant any sum or sums which Guarantor, in good 
faith, determines that the Applicant has failed to pay and would be 
held legally liable by reason of Applicant's transportation-related 
activities, or its legal responsibilities under the Shipping Act and 
the rules and regulations of the FMC, made by Applicant while this 
agreement is in effect, regardless of the financial responsibility 
or lack thereof, or the solvency or bankruptcy, of Applicant.
    9. The Applicant or Guarantor will immediately notify the 
Director, Bureau of Certification and Licensing, Federal Maritime 
Commission, Washington, DC 20573, of all claims made, lawsuits 
filed, judgments rendered, and payments made under the Guaranty.
    10. Applicant and Guarantor agree to handle the processing and 
adjudication of claims by claimants under the Guaranty established 
herein in the United States, unless by mutual consent of all parties 
and claimants another country is agreed upon. Guarantor agrees to 
appoint an agent for service of process in the United States.
    11. This Guaranty shall be governed by the laws in the State of 
-------- to the extent not inconsistent with the rules and 
regulations of the FMC.
    12. This Guaranty is effective the day of ----, ------, ------ 
12:01 a.m., standard time at the address of the Guarantor as stated 
herein and shall continue in force until terminated as herein 
provided.
    13. The Guarantor hereby designates as the Guarantor's legal 
agent for service of process domiciled in the United States --------
----, with offices located in the United States at ------------, for 
the purposes of enforcing the Guaranty described herein.
-----------------------------------------------------------------------

(Place and Date of Execution)

-----------------------------------------------------------------------

(Type Name of Guarantor)

-----------------------------------------------------------------------

(Type Address of Guarantor)

-----------------------------------------------------------------------

By

-----------------------------------------------------------------------

(Signature and Title)

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

Form FMC-69

Federal Maritime Commission

    Ocean Transportation Intermediary (OTI) Group Supplemental 
Coverage Bond Form (Shipping Act of 1984 (46 U.S.C. 40101-41309)) 
(Shipping Act).
    ------------[indicate whether NVOCC or Freight Forwarder], as 
Principal (hereinafter ``Principal''), and ---------------- as 
Surety (hereinafter ``Surety'') are held and firmly bound unto the 
United States of America in the sum of $------ for the payment of 
which sum we bind ourselves, our heirs, executors, administrators, 
successors and assigns, jointly and severally.
    Whereas, (Principal) ---------------- operates as a group or 
association of OTIs in the waterborne foreign commerce of the United 
States and pursuant to section 19 of the Shipping Act of 1984 (46 
U.S.C. 40901-40904), files this bond with the Federal Maritime 
Commission;
    Whereas, this group bond is written to ensure compliance by the 
OTIs, enumerated in Appendix A of this bond, with section 19 of the 
Shipping Act (46 U.S.C. 40901-40904), and the rules and regulations 
of the Federal Maritime Commission relating to evidence of financial 
responsibility for OTIs (46 CFR Part 515), this group bond shall be 
available to pay any judgment obtained or any settlement made 
pursuant to a claim under 46 CFR 515.23 for damages against such 
OTIs arising from OTI transportation-related activities under the 
Shipping Act, or order for reparations issued pursuant to section 11 
of the Shipping Act (46 U.S.C. 41301-41302, 41305-41307(a)), or any 
penalty assessed against one or more OTI members pursuant to section 
13 of the Shipping Act (46 U.S.C. 41107-41109); provided, however, 
that the Surety's obligation for a group or association of OTIs 
shall extend only to such damages, reparations or penalties 
described herein as are not covered by another surety bond, 
insurance policy or guaranty held by the OTI(s) against which a 
claim or final judgment has been brought and that Surety's total 
obligation hereunder shall not exceed the amount per OTI provided 
for in 46 CFR 515.21 or the amount per group or association of OTIs 
provided for in 46 CFR 515.21 in aggregate.
    Now, therefore, the conditions of this obligation are that the 
penalty amount of this bond, as may be restored pursuant to 46 CFR 
515.21, shall be available to pay any judgment obtained or any 
settlement made pursuant to a claim under 46 CFR 515.23 against the 
OTIs enumerated in Appendix A of this bond for damages arising from 
any or all of the identified OTIs' transportation-related activities 
under the Shipping Act (46 U.S.C. 40101-41309), or order for 
reparations issued pursuant to section 11 of the Shipping Act (46 
U.S.C. 41301-41302, 41305-41307(a)), or any penalty assessed 
pursuant to section 13 of the Shipping Act (46 U.S.C. 41107-41109), 
that are not covered by the identified OTIs' individual insurance 
policy(ies), guaranty(ies) or surety bond(s).
    This group bond shall inure to the benefit of any and all 
persons who have obtained a judgment or made a settlement pursuant 
to a claim under 46 CFR 515.23 for damages against any or all of the 
OTIs identified in Appendix A not covered by said OTIs' insurance 
policy(ies), guaranty(ies) or surety bond(s) arising from said OTIs' 
transportation-related activities under the Shipping Act, or order 
for reparation issued pursuant to section 11 of the Shipping Act, 
and to the benefit of the Federal Maritime Commission for any 
penalty assessed against said OTIs pursuant to section 13 of the 
Shipping Act (46 U.S.C. 41107-41109). However, the bond shall not 
apply to shipments of used household goods and personal effects for 
the account of the Department of Defense or the account of federal 
civilian executive agencies shipping under the International 
Household Goods Program administered by the General Services 
Administration.
    The Surety consents to be sued directly in respect of any bona 
fide claim owed by any or all of the OTIs identified in Appendix A 
for damages, reparations or penalties arising from the 
transportation-related activities under the Shipping Act of the OTIs 
in the event that such legal liability has not been discharged by 
the OTIs or Surety after a claimant has obtained a final judgment 
(after appeal, if any) against the OTIs from a United States Federal 
or State Court of competent jurisdiction and has complied with the 
procedures for collecting on such a judgment pursuant to 46 CFR 
515.23, the Federal Maritime Commission, or where all parties and 
claimants otherwise mutually consent, from a foreign court, or where 
such claimant has become entitled to payment of a specified sum by 
virtue of a compromise settlement agreement made with the OTI(s) 
and/or Surety pursuant to 46 CFR 515.23, whereby, upon payment of 
the agreed sum, the Surety is to be fully, irrevocably and 
unconditionally discharged from all further liability to such 
claimant(s).
    The liability of the Surety shall not be discharged by any 
payment or succession of

[[Page 32977]]

payments hereunder, unless and until such payment or payments shall 
aggregate the penalty of this bond, as may be restored pursuant to 
46 CFR 515.21, and in no event shall the Surety's total obligation 
hereunder exceed the amount per member OTI set forth in 46 CFR Sec.  
515.21, as may be restored pursuant thereto, identified in Appendix 
A, or the amount per group or association of OTIs set forth in 46 
CFR 515.21, as may be restored pursuant thereto, regardless of the 
number of OTIs, claims or claimants.
    This bond is effective the ---- day of ------, ------, and shall 
continue in effect until discharged or terminated as herein 
provided. The Principal or the Surety may at any time terminate this 
bond by written notice to the Federal Maritime Commission at its 
office in Washington, DC. Such termination shall become effective 
thirty (30) days after receipt of said notice by the Commission. The 
Surety shall not be liable for any transportation-related activities 
of the OTIs identified in Appendix A as covered by the Principal 
after the expiration of the 30-day period, but such termination 
shall not affect the liability of the Principal and Surety for any 
transportation-related activities occurring prior to the date when 
said termination becomes effective.
    The Principal or financial responsibility provider will promptly 
notify the underwriting Surety and the Director, Bureau of 
Certification and Licensing, Federal Maritime Commission, 
Washington, DC 20573, of any additions, deletions or changes to the 
OTIs enumerated in Appendix A. In the event of additions to Appendix 
A, coverage will be effective upon receipt of such notice, in 
writing, by the Commission at its office in Washington, DC. In the 
event of deletions to Appendix A, termination of coverage for such 
OTI(s) shall become effective 30 days after receipt of written 
notice by the Commission. Neither the Principal nor the Surety shall 
be liable for any transportation-related activities of the OTI(s) 
deleted from Appendix A that occur after the expiration of the 30-
day period, but such termination shall not affect the liability of 
the Principal and Surety for any transportation-related activities 
of said OTI(s) occurring prior to the date when said termination 
becomes effective.
    The underwriting Surety will immediately notify the Director, 
Bureau of Certification and Licensing, Federal Maritime Commission, 
Washington, DC 20573, of all claims made, lawsuits filed, judgments 
rendered, and payments made against this group bond.
    Signed and sealed this ---- day of ------, ------,
(Please type name of signer under each signature).
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Individual Principal or Partner
-----------------------------------------------------------------------
Business Address
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Individual Principal or Partner
-----------------------------------------------------------------------
Business Address
-----------------------------------------------------------------------
Individual Principal or Partner
-----------------------------------------------------------------------
Business Address
-----------------------------------------------------------------------
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 (Required if Principal is 
not a U.S. Corporation)
-----------------------------------------------------------------------
Agent's Address
-----------------------------------------------------------------------
Corporate Surety
-----------------------------------------------------------------------
Business Address (Affix Corporate Seal)
-----------------------------------------------------------------------
By
-----------------------------------------------------------------------
Title
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Appendix E to Part 515--Optional Rider for Additional NVOCC Financial 
Responsibility (Optional Rider to Form FMC-48) [FORM 48A]

FMC-48A, OMB No. 3072-0018, (04/06/04)
Optional Rider for Additional NVOCC Financial Responsibility 
[Optional Rider to Form FMC-48]

RIDER
    The undersigned ----------------, as Principal and --------, as 
Surety do hereby agree that the existing Bond No. ------ to the 
United States of America and filed with the Federal Maritime 
Commission pursuant to section 19 of the Shipping Act of 1984 is 
modified as follows:
    1. The following condition is added to this Bond:
    a. An additional condition of this Bond is that $------ (payable 
in U.S. Dollars or Renminbi Yuan at the option of the Surety) shall 
be available to pay any fines and penalties for activities in the 
U.S.-China trades imposed by the Ministry of Communications of the 
People's Republic of China (``MOC'') or its authorized competent 
communications department of the people's government of the 
province, autonomous region or municipality directly under the 
Central Government or the State Administration of Industry and 
Commerce pursuant to the Regulations of the People's Republic of 
China on International Maritime Transportation and the Implementing 
Rules of the Regulations of the PRC on International Maritime 
Transportation promulgated by MOC Decree No. 1, January 20, 2003.
    b. The liability of the Surety shall not be discharged by any 
payment or succession of payments pursuant to section 1 of this 
Rider, unless and until the payment or payments shall aggregate the 
amount set forth in section 1a of this Rider. In no event shall the 
Surety's obligation under this Rider exceed the amount set forth in 
section 1a regardless of the number of claims.
    c. The total amount of coverage available under this Bond and 
all of its riders, available pursuant to the terms of section 1(a.) 
of this rider, equals $------. The total amount of aggregate 
coverage equals or exceeds $125,000.
    d. This Rider is effective the ---- day of ------, 20------, and 
shall continue in effect until discharged, terminated as herein 
provided, or upon termination of the Bond in accordance with the 
sixth paragraph of the Bond. The Principal or the Surety may at any 
time terminate this Rider by written notice to the Federal Maritime 
Commission at its offices in Washington, DC, accompanied by proof of 
transmission of notice to MOC. Such termination shall become 
effective thirty (30) days after receipt of said notice and proof of 
transmission by the Federal Maritime Commission. The Surety shall 
not be liable for fines or penalties imposed on the Principal after 
the expiration of the 30-day period but such termination shall not 
affect the liability of the Principal and Surety for any fine or 
penalty imposed prior to the date when said termination becomes 
effective.
    2. This Bond remains in full force and effect according to its 
terms except as modified above.
    In witness whereof we have hereunto set our hands and seals on 
this day of ------, 20------,
    [Principal],
    By:
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    [Surety],
    By:
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Appendix F to Part 515--Optional Rider for Additional NVOCC Financial 
Responsibility for Group Bonds [Optional Rider to Form FMC-69]

FMC-69A, OMB No. 3072-0018 (04/06/04)
Optional Rider for Additional NVOCC Financial Responsibility for 
Group Bonds [Optional Rider to Form FMC-69]
RIDER
    The undersigned ----------------, as Principal and --------, as 
Surety do hereby agree that the existing Bond No. ------ to the 
United States of America and filed with the Federal Maritime 
Commission pursuant to section 19 of the Shipping Act of 1984 is 
modified as follows:
    1. The following condition is added to this Bond:
    a. An additional condition of this Bond is that $ ------ 
(payable in U.S. Dollars or Renminbi Yuan at the option of the 
Surety) shall be available to any NVOCC enumerated in an Appendix to 
this Rider to pay any fines and penalties for activities in the 
U.S.-China trades imposed by the Ministry of Communications of the 
People's Republic of China (``MOC'') or its authorized competent 
communications department of the people's government of the 
province, autonomous region or municipality directly under the 
Central Government or the State Administration of Industry and 
Commerce pursuant to the Regulations of the People's

[[Page 32978]]

Republic of China on International Maritime Transportation and the 
Implementing Rules of the Regulations of the PRC on International 
Maritime Transportation promulgated by MOC Decree No. 1, January 20, 
2003. Such amount is separate and distinct from the bond amount set 
forth in the first paragraph of this Bond. Payment under this Rider 
shall not reduce the bond amount in the first paragraph of this Bond 
or affect its availability. The Surety shall indicate that $50,000 
is available to pay such fines and penalties for each NVOCC listed 
on appendix A to this Rider wishing to exercise this option.
    b. The liability of the Surety shall not be discharged by any 
payment or succession of payments pursuant to section 1 of this 
Rider, unless and until the payment or payments shall aggregate the 
amount set forth in section 1a of this Rider. In no event shall the 
Surety's obligation under this Rider exceed the amount set forth in 
section 1a regardless of the number of claims.
    c. This Rider is effective the ---- day of ------, 20------, and 
shall continue in effect until discharged, terminated as herein 
provided, or upon termination of the Bond in accordance with the 
sixth paragraph of the Bond. The Principal or the Surety may at any 
time terminate this Rider by written notice to the Federal Maritime 
Commission at its offices in Washington, D. C., accompanied by proof 
of transmission of notice to MOC. Such termination shall become 
effective thirty (30) days after receipt of said notice and proof of 
transmission by the Federal Maritime Commission. The Surety shall 
not be liable for fines or penalties imposed on the Principal after 
the expiration of the 30-day period but such termination shall not 
affect the liability of the Principal and Surety for any fine or 
penalty imposed prior to the date when said termination becomes 
effective.
    2. This Bond remains in full force and effect according to its 
terms except as modified above.
    In witness whereof we have hereunto set our hands and seals on 
this ---- day of ------, 20------.

[Principal],

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

[Surety],
By:--------------------------------------------------------------------
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Privacy Act and Paperwork Reduction Act Notice

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

    By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2013-12429 Filed 5-30-13; 8:45 am]
BILLING CODE 6730-01-P