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FMC Considers Comments to Proposed Rules at Commission Meeting

February 22, 1999

FEDERAL MARITIME COMMISSION

FMC CONSIDERS COMMENTS
TO PROPOSED RULES
AT COMMISSION MEETING

Washington, D.C. 20573

NR 99-04


CONTACT: BRYANT L. VANBRAKLE, Office of the Secretary at (202) 523-5725.

FOR RELEASE: February 22, 1999

The Commission considered comments received from the public in response to four notices of  proposed  rulemaking to implement the Ocean  Shipping Reform  Act  of  1998

("OSRA"). After careful consideration of the comments, the Commission took the following actions:

1. Docket No. 98-28 - Rulemaking for 46 CFR Part 515 - Licensing, Financial Responsibility Requirements, and General Duties for Ocean Transportation Intermediaries ("OTI"). The Commission considered a draft final rule prepared by the Commission's staff that addressed the various issues and options raised by the Notice of Proposed Rulemaking and the comments submitted. The Commission decided to issue a final rule that will, among other things: (1) define "in the United States" for licensing purposes as "resident in or incorporated or established under the laws of the U.S." The Commission also determined that all unlicensed foreign-based OTIs, may only use persons licensed under this part to provide OTI service in the United States; (2)establish financial responsibility levels for freight forwarder OTIs in the United States in the amount of $50,000, $75,000 for licensed NVOCC/OTIs in the United States, and $150,000 for unlicenced foreign-based NVOCC/OTIs; and (3)allow those NVOCC/OTIs who have a tariff and bond in effect on April 30, 1999, to continue operating without satisfying the requisite licensing requirements. The final rule should be issued early this week.

2. Docket No. 98-29 - Rulemaking for 46 CFR Part 520 - Carrier Automated Tariffs. The Commission considered a draft final rule prepared by the Commission's staff that addressed the various issues and options raised by the Notice of Proposed Rulemaking and the comments submitted. The Commission decided to significantly reduce the requirements that had been included in the Notice of Proposed Rulemaking. It voted to eliminate, among other things, the requirement for rule titles, the mandatory use of the Harmonized Code and 10-digit commodity codes, and the requirement for a minimum rate calculation capability. The Commission also determined that the current ATFI system would not be available for tariff filing after April 30, 1999. This final rule also is expected to be issued early this week. This rule and the rule on OTIs will be placed on the Commission's Web page as soon as they are completed.

3. Docket No. 98-30 - Rulemaking for 46 CFR Part 530 - Service Contracts. The Commission considered a staff recommendation that addressed the various issues and options raised by the Notice of Proposed Rulemaking and the comments submitted. The Commission again decided to significantly reduce the various requirements that had been included in the Notice of Proposed Rulemaking. The Commission considered and approved a staff recommended

approach for an Internet-based service contract filing system that would permit contract filers to use "off the shelf software" to file service contracts utilizing standard word processing format. The Commission also determined that the ATFI-based service contract filing system described in the Notice of Proposed Rulemaking would remain as an option for a brief period to assist filers' transition to this new system. A draft final rule on this matter will be considered by the Commission at a meeting it has announced for 10:00 A.M. February 25, 1999.

4. Docket No. 98-26 - Rulemaking for 46 CFR Part 535 - Ocean Common Carrier and Marine Terminal Operator Agreements Subject to the Shipping Act of 1984. The Commission considered a staff recommendation that addressed the various issues and options raised by the Notice of Proposed Rulemaking and the comments submitted. The Commission determined to remove the service contract reporting requirements contained in the proposed rule, and voted to retain the proposal calling for the elimination of specific form and manner requirements related to the filing of agreements. The Commission also determined to eliminate the portion of the proposed rule which purported to implement the provisions of OSRA dealing with "voluntary guidelines" for individual service contracting. The Commission directed the staff to explore possible rule language that could address the OSRA voluntary guideline provisions for Commission consideration at its meeting on February 25, 1999. The Commission also determined to defer adoption of the proposed rule's definition of "ocean common carrier," and directed the staff to prepare a recommendation for a separate proceeding to solicit further comment on this issue.