FMC Announces Compromise Agreements
October 24, 2002
Federal Maritime Commission
FMC ANNOUNCES COMPROMISE AGREEMENTS
Washington, D.C. 20573
NR 02 - 10
CONTACT : VERN W. HILL, DIRECTOR BUREAU OF ENFORCEMENT AT (202) 523-5783FOR RELEASE: October 24, 2002
The Federal Maritime Commission today announced eleven compromise agreements recovering civil penalties in an aggregate amount of $820,000. The agreements were reached with a vessel-operating common carrier ("VOCC"), members of a carrier credit agreement, a passenger-vessel operator ("PVO") and ocean transportation intermediaries ("OTIs"), acting both as non-vessel-operating common carriers ("NVOCCs") and freight forwarders. The compromise agreements are:
Hecny Shipping Ltd. and Bright Fortune Shipping Ltd. Hecny Shipping Ltd. ("Hecny") and its affiliate Bright Fortune Shipping Ltd. ("Bright Fortune") are tariffed and bonded NVOCCs based in Hong Kong. It was alleged that Hecny and Bright Fortune violated section 10(a)(1) of the Shipping Act of 1984 ("1984 Act") by obtaining transportation of property at less than the applicable service contract rates and charges through a scheme by which Hecny Shipping permitted other NVOCCs, including Bright Fortune, to access its service contracts. It also was alleged that Hecny and Bright Fortune failed to charge the rates set forth in their respective tariffs in violation of section 10(b)(2) of the 1984 Act. Under the terms of the compromise, these entities jointly paid the sum of $250,000.
Ledi Corporation. Ledi Corporation ("Ledi") is an entity located in Miami, Florida. It was alleged that Ledi violated sections 8(a), 10(a)(1), 19(a) and 19(b) of the 1984 Act by obtaining transportation at less than the rates and charges otherwise applicable by entering into and shipping under a service contract, as a non-vessel-operating common carrier, without obtaining a license to act as an OTI, without furnishing a bond, proof of insurance, or other surety and without having a tariff on file. Under the terms of the compromise, Ledi paid the sum of $20,000.
LEO Transport Corporation Ltd. LEO Transport Corporation Ltd. ("LEO") is an OTI, operating as an NVOCC, located in Bangkok, Thailand. It was alleged that LEO violated sections 8(a), 10(a)(1) and 10(b)(2) of the 1984 Act by providing untariffed carriage as an NVOCC in the U.S. trades, by allowing another NVOCC to unlawfully access its service contract and by assessing rates and charges for its services at other than those contained in its tariff. Under the terms of the compromise, LEO paid the sum of $25,000.
Lilly & Associates International Freight Forwarders, Inc. Lilly & Associates International Freight Forwarders, Inc. ("Lilly") is a licensed and bonded NVOCC located in Miami, Florida. It was alleged that Lilly violated section 10(a)(1) of the 1984 Act by knowingly and willfully obtaining transportation for property on behalf of others at less than the rates or charges that would otherwise be applicable by entering into exclusive sales agent agreements with unlicensed OTIs; by permitting unlawful access to Lilly's service contracts; and by means of receiving unlawful substitutions of equipment. It was also alleged that Lilly allowed others to obtain transportation for property at less than the rates or charges established in its tariff by providing concessions of free pick up and delivery of cargo, and provided transportation of cargo at other than the rates or charges which were in effect in its applicable tariff at the time the shipments were tendered, in violation of sections 10(b)(1) and 10(b)(2) of the 1984 Act. Moreover, it was alleged that Lilly paid freight forwarder compensation to entities without first obtaining written certifications that these entities held a valid license and/or performed the services entitling them to compensation, in violation of section 19(e)(1) of the 1984 Act. It was further alleged that Lilly violated 46 C.F.R. § 515.31(e) of the Commission's regulations, by preparing false documentation on behalf of its agents by misrating bills of lading with a higher rate than the actual charges applicable. In compromise of these allegations, Lilly paid the sum of $70,000.
Middle East Shipping Co., Inc. Middle East Shipping Co., Inc. ("Middle East") is an ocean freight forwarder located in Pasadena, Texas. It was alleged that Middle East violated section 19(e)(3) of the 1984 Act and the Commission's regulations at 46 C.F.R. § 515.42(i) by knowingly and willfully receiving freight forwarder compensation from common carriers for shipments in which it had a beneficial interest. In compromise of these allegations, Middle East paid the sum of $30,000.Seafreight Line, Ltd. Seafreight Line, Ltd. ("Seafreight") is a VOCC with headquarters in the Grand Cayman Islands. It was alleged that Seafreight violated sections 8(c) and 10(b)(12) of the 1984 Act by entering into and providing transportation pursuant to service contracts which were not in compliance with applicable law and regulation because they were entered into with untariffed OTIs, contained improper shipper certifications or contained indefinite terms as to duration. Pursuant to the compromise agreement, Seafreight paid the sum of $50,000.
Target Intermodal Inc. Target Intermodal Inc. ("Target") is a licensed and bonded NVOCC based in El Segundo, CA. It was alleged that Target violated sections 10(a)(1) and 10(b)(2) of the 1984 Act by obtaining transportation of property at less than the applicable rates by improperly accessing the service contract of another NVOCC and by failing to charge those rates set forth in its tariff. Under the terms of the compromise, Target paid the sum of $35,000.
Translink Shipping Inc. Translink Shipping Inc. ("Translink") is a licensed and bonded NVOCC based in Seattle, Washington. It was alleged that Translink violated section 10(b)(1) by allowing other persons to obtain transportation of property at less than the applicable tariff rates and charges by the device or means of rebating or refunding a portion of the freight charges to shippers or shippers' employees. In compromise of these allegations, Translink paid the sum of $115,000.TSC Container Freight. TSC Container Freight ("TSC") is a licensed OTI/NVOCC, headquartered in St. Paul, MN, and a business unit of the Scoular Company. It was alleged that TSC violated sections 10(a)(1), 10(b)(1) and 10(b)(2) of the Shipping Act of 1984 and 46 C.F.R. Part 530 Subpart B of the Commission's regulations by obtaining transportation at less than applicable rates by misdescribing commodities transported under service contracts with VOCCs. In compromise of these allegations, TSC paid the sum of $75,000.
The Water Transportation Credit Group Member Lines. The Water Transportation Credit Group ("WTCG"), formerly an association of the New York Credit Group Service, Inc., consisted of various VOCCs, including: American President Lines, Ltd., A.P. Moller-Maersk Sealand, China Shipping Container Lines Co., Ltd., CMA CGM S.A., Lykes Lines Limited, LLC, Mitsui O.S.K. Lines, Ltd. and P&O Nedlloyd Ltd. It was alleged that former member lines of the WTCG were involved in the exchange of credit information under an agreement required to be filed with the Commission, but not filed, in violation of sections 5(a) and 10(a)(2) of the 1984 Act. Under the terms of the compromise, these WTCG member lines, collectively, paid the sum of $105,000.
West Travel Inc. (d/b/a Alaska Sightseeing/Cruise West). West Travel Inc. (d/b/a Alaska Sightseeing/Cruise West) ("West Travel") is a PVO located in Seattle, WA. It was alleged that West Travel arranged, offered, and advertised passage aboard the Spirit of Oceanus, a vessel having berth accommodations for more than 50 passengers that was scheduled to embark passengers at a United States port, prior to obtaining a Certificate of Financial Responsibility for Indemnification of Passengers for Nonperformance of Transportation from the Commission in violation of section 3(a) of Public Law 89-777, 46 U.S.C. app. § 817(e). In compromise of this allegation, West Travel paid the sum of $45,000.
In concluding the above compromises, the settling parties did not admit any violations of the shipping statutes. These compromise agreements resulted from investigations conducted by Area Representatives of the Bureau of Enforcement located in Los Angeles, Miami, New Orleans, New York, Seattle and Washington, DC. Staff attorneys with the Bureau of Enforcement negotiated the compromise agreements.