The Federal Maritime Commission Newsroom

News

FMC Announces Compromise Agreements

May 6, 1999

FEDERAL MARITIME COMMISSION

FMC ANNOUNCES COMPROMISE AGREEMENTS

Washington, D.C. 20573

NR 99-11


CONTACT VERN W. HILL, DIRECTOR

BUREAU OF ENFORCEMENT AT (202) 523-5783

FOR RELEASE:    MAY 6 , 1999

The Federal Maritime Commission today announced compromise agreements with ten entities recovering civil penalties in an aggregate amount of $2,900,000. The agreements were entered into with a variety of transportation entities including vessel-operating common carriers, NVOCCs (as carriers and shippers), and freight forwarders. The compromise agreements are:

A & M Independent Line , Inc. A & M Independent Line, Inc. is a NVOCC based in Miami, FL, operating in the South American trades. It was alleged that A & M violated sections 10 (a)(1) and 10 (b)(1) of the 1984 Act by obtaining transportation at less than the applicable rates and charges and by charging, demanding, collecting or receiving less compensation for the transportation of property than the rates and charges set forth in its tariff. A & M paid the sum of $50,000.

American Commercial Transport, Inc. American Commercial Transport, Inc. is a NVOCC located in Gardena, CA, concentrating on the carriage of rice, tuna and other foodstuffs from Thailand to the United States. The Commission alleged that ACT violated section 10 (a)(1) of the Shipping Act of 1984 by misdeclaring or misweighing cargo, or by co-loading cargo with other NVOCCs in violation of restrictions applicable to ACT's service contracts. Under the terms of the compromise, ACT paid the amount of $65,000.

China Interocean Transport, Inc. and Sino-Am Marine Company, Inc. China Interocean Transport, Inc. is a licensed freight forwarder based in Linden, NJ. Sino-Am Marine Company, Inc., a corporate affiliate of CIT, is a tariffed and bonded NVOCC located in New York, NY. It was alleged that Sino-Am, directly or on behalf of others, violated section 10 (a)(1) of the Shipping Act of 1984 obtaining transportation at less than applicable rates or charges by not paying outstanding deadfreight charges with respect to its service contract with SINOTRANS and by permitting non-signatory parties to obtain access to its contract. In addition, it was alleged that CIT, a licensed forwarder related to the contract shipper, violated section 19(d) and 46 C.F.R. Part 510, by receiving freight forwarder compensation on shipments in which the forwarder had a direct or indirect beneficial interest. Under the compromise, CIT and Sino-Am paid the amount of $70,000 .

Compania Sud Americana de Vapores Compania Sud Americana de Vapores ("CSAV") is a vessel-operating common carrier located in Valparaiso, Chile operating in the U.S. foreign commerce, including the trades between the U.S. and South America. It was alleged that CSAV violated sections 10 (b)(1), 10 (b)(2), 10 (b)(3), 10 (b)(4) and 19 (d)(3) of the Shipping Act of 1984 by charging, demanding, collecting or receiving different compensation for the transportation of property than the applicable rates or charges by refunding or rebating a portion of the applicable rates, allowing shippers to obtain ocean transportation for less than the applicable rates or charges, paying excess compensation to ocean freight forwarders, and engaging in service contract malpractices. Pursuant to the compromise, CSAV paid the amount of $1,850,000.

Eagle Transfer, Inc. d.b.a. NPI Line Eagle Transfer, Inc. d.b.a. NPI Line ("NPI Line") was a tariffed and bonded NVOCC located in Miami, FL operating in the South American trades. It was alleged that NPI Line violated sections 10 (a)(1) and 10 (b)(1) of the Shipping Act of 1984 by obtaining transportation for less than applicable rates and charges by receiving rebates and other rate concessions and by engaging in service contract misuse, and by charging rates other than those set forth in its applicable tariffs. In compromise of these allegations, NPI Line paid the sum of $150,000.

Freight Line of the Americas, Inc. Freight Line of the Americas, Inc. is a tariffed and bonded NVOCC located in Miami, FL operating in the U.S. foreign commerce, including the trades between the U.S. and South America. It was alleged that Freight Line violated section 10(a)(1) of the Shipping Act of 1984 by obtaining transportation of property for less than applicable rates and charges by receiving rebates and other rate concessions. Under the terms of the compromise, Freight Line of the Americas paid the sum of $50,000.

Mediterranean Shipping Company Mediterranean Shipping Company ("MSC") is a vessel operating common carrier with headquarters in Geneva, Switzerland operating in U.S. foreign trades including the trades between the U.S. and South America. It was alleged that MSC violated sections 10 (b)(1), 10 (b)(2) and 10 (b)(4) of the Shipping Act of 1984 by charging, demanding, collecting or receiving different compensation for the transportation of property than the applicable rates and charges by refunding or rebating to shippers in the South American trades a portion of the applicable rates. In compromise of these allegations, MSC paid the amount of $360,000.

Mercator Shipping, Ltd. (including Mercator Shipping, Ltd. d/b/a Flamingo Line Mercator Shipping Ltd. (including Mercator Shipping, Ltd. d/b/a Flamingo Line) ("Mercator") is a tariffed and bonded NVOCC located in Miami, FL operating in the U.S. foreign trades, including the South America trades. It was alleged that Mercator violated section 10 (a)(1) of the Shipping Act of 1984 by obtaining transportation of property for less than applicable rates and charges by receiving rebates and other rate concessions. Under the terms of the compromise Mercator paid the sum of $200,000.

Metro Freight Services, Inc. and Georges T. Samaha Metro Freight Services, Inc. is a licensed ocean freight forwarder located in Inwood, NY. Mr. Samaha is Metro's owner and the qualifying individual for its license. It was alleged that Metro and Mr. Samaha violated sections 10 (a)(1) and 19 (d)(4) of the Shipping Act of 1984 by obtaining transportation at less than the applicable rates and charges by creating and utilizing an NVOCC (Maritime Express Lines, Inc.), which did not provide common carrier services, to sign service contracts for the purpose of providing Metro's customers with unlawful access to service contract rates and charges. In addition, it was alleged that Metro collected freight forwarder compensation on shipments in which it had a beneficial interest. Metro paid the amount of $15,000 in compromise.

Orient Express Container Company, Ltd. Orient Express Container Company, Ltd. ("OEC") is a tariffed and bonded NVOCC located in Taipei, Taiwan operating in the Pacific trades. It was alleged that OEC violated section 10 (a)(1) of the Shipping Act of 1984 by obtaining transportation at less than the applicable rates and charges by means of commodity misdescriptions, misdeclarations of measurements and by other unjust and unfair devices. In compromise of these allegations, OEC paid the sum of $90,000.

In concluding these compromises, these entities did not admit any violations of the Shipping Act of 1984. The 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.

In announcing these compromise agreements Chairman Creel stated: "Unquestionably OSRA has brought about significant modification to and certain reductions in the regulatory requirements for the maritime shipping industry. However, this statute does contain a number of regulatory requirements, including adherence to rates and charges as set forth in published tariffs and filed service contracts. The Commission will continue to monitor and to enforce all statutory and regulatory obligations for activities prior to, as well as subsequent to, May 1, 1999, the effective date of OSRA. We will endeavor to encourage and ensure that all participants meet their compliance obligations in order that all appropriately may benefit from the new OSRA environment."