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FMC Announces Compromise Agreements

September 10, 2007

NR 07-04

CONTACT: VERN W. HILL, DIRECTOR, BUREAU OF ENFORCEMENT (202) 523-5783

The Federal Maritime Commission today announced compromise agreements recovering payments in the amount of $862,000. The agreements were reached with a vessel-operating common carrier ("VOCC") and licensed and unlicensed ocean transportation intermediaries ("OTI"), both non-vessel-operating common carriers ("NVOCC") and ocean freight forwarders. The compromise agreements are with:

Air & Ocean Shipping, Inc. d/b/a Compass Marine. Air & Ocean Shipping, Inc. d/b/a Compass Marine ("Air & Ocean"), a licensed NVOCC and ocean freight forwarder, allegedly obtained transportation of property at less than the applicable rates and charges of ocean common carriers by misdeclaring shipment measurements on more than one hundred shipments in violation of section 10(a)(1) of the Shipping Act of 1984 ("1984 Act"). Air & Ocean also allegedly provided service that was not in accordance with the rates, charges, classifications, rules and practices contained in its published tariff on more than one hundred shipments in violation of section 10(b)(2)(A) of the 1984 Act. In compromise of civil penalties arising from these allegations, Air & Ocean paid $110,000.

Hyundai Merchant Marine Co., Ltd. Hyundai Merchant Marine Co., Ltd. ("Hyundai") is a VOCC with headquarters in Seoul, Korea. It was alleged that Hyundai violated section 10(b)(1) of the 1984 Act by allowing shippers to obtain transportation for property at less than the rates or charges established by Hyundai in its tariffs or service contracts by permitting (a) use of its service contracts by persons who are neither signatories nor affiliates to those contracts, (b) unlawful equipment substitution, and (c) misdescription of commodities. It was also alleged that Hyundai violated sections 10(b)(11) and 10(b)(12) of the1984 Act by entering into service contracts with, and providing transportation services to, an OTI that did not have a tariff, license or bond as required by the 1984 Act. In compromise of civil penalties arising from these allegations, Hyundai paid $680,000.

Oconca Shipping (NY) Inc. Oconca Shipping (NY) Inc. ("Oconca NY") allegedly acted as an NVOCC in the trades between Asia and the United States without obtaining a license as an OTI from the Commission, without providing evidence of a bond, insurance or other form of security and without publishing an electronic tariff in violation of sections 8, 19(a) and 19(b) of the 1984 Act. Oconca NY also allegedly obtained transportation of property at less than the applicable service contract rates and charges in violation of section 10(a)(1) of the 1984 Act by 1) misdeclaring shipment measurements to obtain service under equipment substitution provisions; 2) accessing service contracts to which it was not signatory or a lawful affiliate; and 3) receiving payments from an ocean carrier that were not published in the carrier's tariff. Oconca NY paid $40,000 in compromise of civil penalties arising from these allegations.

S.F. Systems, Inc. S.F. Systems, a licensed, tariffed, and bonded NVOCC located in El Monte, California, allegedly violated section 10(a)(1) of the 1984 Act by obtaining ocean transportation for property at less that than the rates and charges that would otherwise be applicable by unlawfully accessing service contracts to which it was neither a signatory nor a lawful affiliate. During the same time period, S.F. Systems allegedly violated section 10(a)(1) of the 1984 Act by obtaining ocean transportation for property at less than the rates and charges that would otherwise be applicable through the misuse of the rules and practices relating to equipment substitution. S.F. Systems paid $32,000 in compromise of civil penalties arising from these allegations.

In concluding the above compromise agreements, the parties did not admit any violations of the Act or the Commission's regulations. The compromise agreements resulted from investigations conducted by the Commission's Area Representatives located in Los Angeles, South Florida, and Washington, D.C. Staff attorneys with the Bureau of Enforcement negotiated the compromise agreements.

The Federal Maritime Commission is responsible for the regulation of ocean-borne transportation in the foreign commerce of the Its core mission is to administer regulations and policies that foster a fair, efficient and secure maritime transportation system.

Press Contact: Bryant L. VanBrakle (202) 523-5725; e-mail: secretary@fmc.gov