[Federal Register Volume 62, Number 197 (Friday, October 10, 1997)] [Notices] [Pages 53006-53007] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 97-26976] ======================================================================= ----------------------------------------------------------------------- FEDERAL MARITIME COMMISSION [Docket No. 97-17] Portman Square Limited--Possible Violations of Section 10(a)(1) of the Shipping Act of 1984; Order of Investigation and Hearing Portman Square Limited (``Portman Square'') is a tariffed and bonded non-vessel-operating common carrier (``NVOCC''), located at Sixth Floor, Silver Tech Tower, 26 Cheung Lee Street, Chiwan, Hong Kong. Portman Square holds itself out as a NVOCC pursuant to its ATFI tariff FMC-001, filed January 29, 1996. Emerson Li, a resident of Hong Kong, is reported to be Managing Director of Portman Square. Portman Square currently maintains a NVOCC bond, No. 102229, in the amount of $50,000 with the Intercargo Insurance Company, 1450 East American Lane, 20th Floor, Schaumburg, Illinois 60173. Pursuant to Rule 24 of Portman Square's tariff, Distribution Publications, Inc., 7996 Capwell Drive, Oakland, California, serves as the U.S. resident agent for service of process. It appears that in at least forty-one (41) instances occurring between January 10, 1997 and March 11, 1997, Portman Square obtained transportation on Hyundai Merchant Marine Co. Ltd. (``Hyundai'') vessels by accessing a service contract allegedly entered into by Take Ace Co. Ltd. (``Take Ace''). Take Ace executed Hyundai SC No. 96-5343 on April 24, 1996, and certified to Hyundai that it was the cargo owner.\1\ There is no indication, however, that the service contract has been utilized at any time for the transportation of goods in which Take Act retains any beneficial interest.\2\ --------------------------------------------------------------------------- \1\ The Commission's service contract records reflect that Emerson Li executed the Hyundai service contract on behalf of Take Ace. \2\ In fact, the Journal of Commerce PIERS database reports that no shipments were recorded on behalf of shipper Take Ace prior to May 1996 nor subsequent to the expiration of Hyundai's service contract on April 30, 1997. --------------------------------------------------------------------------- From documents obtained from U.S. consignees, it appears Portman Square is in fact the real shipper and party for whose account the ocean transportation was provided. During the period May 1996 through April 1997, over 230 shipments were transported by Hyundai pursuant to service contract No. 96-5343. All of these shipments are believed to have originated with Portman Square, and were handled in the United States by the NVOCC's regular destination agents. In each of the above shipments, Portman Square issued its own NVOCC or ``house'' bill of lading, and thus had a direct role in a scheme of misdescribing the commodity to the transporting ocean common carrier. These shipments originated in Hong Kong and the People's Republic of China, and were destined primarily for Los Angeles and New York for delivery through Portman Square's U.S. agents. In each of the 41 instances cited herein, the commodity was described to the ocean common carrier as ``kitchenware'', ``lighting fixture'', ``patio furniture'', or ``KD furniture''. Other contemporaneous documentation, such as house bills of lading, arrival notices, and U.S. Customs entry documentation prepared by the customhouse broker, reflect that Portman Square was fully cognizant that the shipments actually consisted of footwear, computer parts, sunglasses, plastic flatware, polystone figurines, clocks, and used household goods. Portman Square or its agents nonetheless made payment to the ocean common carrier on the basis of the inaccurate commodity shown and declared on the bill of lading when issued. [[Page 53007]] Section 10(a)(1) of the Shipping Act of 1984 (``1984 Act''), 46 U.S.C. app. Sec. 1709(a)(1), prohibits any person knowingly and willfully, directly or indirectly, by means of false billing, false classification, false weighing, false report of weight, false measurement, or by any other unjust or unfair device or means, to obtain or attempt to obtain ocean transportation for property at less than the rates or charges that would otherwise be applicable. Under section 13 of the 1984 Act, 46 U.S.C. app. Sec. 1712, a person is subject to a civil penalty of not more than $25,000 for each violation knowingly and willfully committed, and not more than $5,000 for other violations.\3\ Section 23 of the 1984 Act, 46 U.S.C. app. Sec. 1721 further provides that a common carrier's tariff may be suspended for a period not to exceed one year for violations of section 10(a)(1) of the 1984 Act. --------------------------------------------------------------------------- \3\ These penalties are increased 10 percent for any violations occurring after November 7, 1996. See, Inflation Adjustment of Civil Penalties, 61 Fed. Reg. 52704 (October 8, 1996). --------------------------------------------------------------------------- Now therefore, it is ordered, That pursuant to sections 10, 11, 13, and 23 of the 1984 Act, 46 U.S.C. app. Secs. 1709, 1710, 1712, and 1721, an investment is instituted to determine: (1) Whether Portman Square Limited violated section 10(a)(1) of the 1984 Act by directly or indirectly obtaining transportation at less than the rates and charges otherwise applicable through the means of misdescription of the commodities actually shipped; (2) Whether, in the event violations of section 10(a)(1) of the 1984 Act are found, civil penalties should be assessed against Portman Square Limited and, if so, the amount of penalties to be assessed; (3) Whether, in the event violations of section 10(a)(1) of the 1984 Act are found, the tariff of Portman Square Limited should be suspended; and (4) Whether, in the event violations are found, an appropriate cease and desist order should be issued. It is further ordered, That a public hearing be held in this proceeding and that this matter be assigned for hearing before an Administrative Law Judge of the Commission's Office of Administrative Law Judges at a date and place to be hereafter determined by the Administrative Law Judge in compliance with Rule 61 of the Commission's Rules of Practice and Procedure, 46 CFR 502.61. The hearing shall include oral testimony and cross-examination in the discretion of the Presiding Administrative Law Judge only after consideration has been given by the parties and the Presiding Administrative Law Judge to the use of alternative forms of dispute resolution, and upon a proper showing that there are genuine issues of material fact that cannot be resolved on the basis of sworn statements, affidavits, depositions, or other documents or that the nature of the matters in issue is such that an oral hearing and cross-examination are necessary for the development of an adequate record; It is further ordered, That Portman Square Limited is designated a Respondent in this proceeding; It is further ordered, That the Commission's Bureau of Enforcement is designated a party to this proceeding; It is further ordered, That notice of this Order be published in the Federal Register, and a copy be served on parties of record; It is further ordered, That other persons having an interest in participating in this proceeding may file petitions for leave to intervene in accordance with Rule 72 of the Commission's Rules of Practice and Procedure, 46 CFR 502.72; It is further ordered, That all further notices, orders, and/or decisions issued by or on behalf of the Commission in this proceeding, including notice of the time and place of hearing or prehearing conference, shall be served on parties of record; It is further ordered, That all documents submitted by any party of record in this proceeding shall be directed to the Secretary, Federal Maritime Commission, Washington, D.C. 20573, in accordance with Rule 118 of the Commission's Rules of Practice and Procedure, 46 CFR 502.118, and shall be served on parties of record; and It is further ordered, That in accordance with Rule 61 of the Commission's Rules of Practice and Procedure, the initial decision of the Administrative Law Judge shall be issued by October 5, 1998 and the final decision of the Commission shall be issued by February 2, 1999. By the Commission. Joseph C. Polking, Secretary. [FR Doc. 97-26976 Filed 10-9-97; 8:45 am] BILLING CODE 6730-01-M