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Questions, Answers, and Helpful Information

Categories

Tariffs
Service Contracts
NVOCC Service Arrangements
Ocean Transportation Intermediaries
Moving Household Goods
Other Maritime Issues
Passenger Vessel Operators

Tariffs
What is a common carrier tariff?
Who must publish a common carrier tariff?
How do I file an agreement with the Commission?
How do I get a copy of an agreement?
Can I get a list of agreements by carrier, type, geographic region?
What must be included in a tariff?
What types of services are exempt from tariff publication requirements?
Does the minimum rate display requirement of 46 C.F.R. § 520.6(e) require a list of assessorial charges that actually apply to the shipment?
Does the access date capability required by 46 C.F.R. § 520.10(b) only apply to historical data or does it also apply to future dates?
Can carriers use codes other than those in the Standard Terminology Appendix?
What is Form FMC-1?
Is Form FMC-1 required in order to offer service pursuant to a tariff(s)?
How are changes submitted to Form FMC-1?
How do I obtain an Organization Number?
How do I access a carrier or conference automated tariff system?
When do I file a special permission application?
How do I correct a clerical error in a tariff?
What is a special docket application for permission to refund or waive freight charges?
If a tariff is canceled, who should provide written notice of cancellation to the Commission?
Once a tariff has been canceled, superceded, or withdrawn, how long must its data be maintained in a carrier’s publication system?
What if a carrier or conference designates an agent to publish, on its behalf, its tariff in CATS?
What if a carrier or conference fails to pay a designated agent for publishing and maintaining historical tariff data in CATS?
When must my tariff be published?
Can a non-binding discussion agreement publish a common tariff?
Will the blanket special permission for new tariffs with no increases permitting them to go into effect without the 30 days’ advance notice requirement also apply to controlled carriers?

Service Contracts
What is a service contract?
Must all service contracts be filed with the Commission?
Who must file service contracts?
How are service contracts filed?
What is SERVCON?
Which document formats will the Commission’s SERVCON internet-based filing system accept?
Are there user fees associated with SERVCON?
How do I register to file service contracts?
What is Form FMC-83?
Who is required to file Form FMC-83?
How can a copy of Form FMC-83 be obtained and filed with the Commission?
Are SERVCON filings confidential?
Are there any publishing requirements related to service contracts?
What is an Essential Terms Publication?
Must the public Essential Terms ETs) appear in any particular format?
Where can I find a common carrier's or conference's public ETs?
When must public ETs be published?
How and where must the public ETs of a non-conference agreement be published?
May service contracts cross reference other material, specifically a published tariff?
Must common service contract standard terms ("boiler plate") be filed in every service contract?
Must service contracts for inland movements in Europe be filed with the Commission?
Must ocean common carriers enter into service contracts?
Who may offer a service contract?
For purposes of service contracts, what is a "shipper"?
Can a freight forwarder act as a shipper party to a service contract?
Can a freight forwarder sign a service contract as an agent for a shipper?
Can an NVOCC act as a shipper party to a service contract?
Must a shipper provide certification of its status under a service contract?
Who is responsible for verifying that an NVOCC shipper signing a service contract has tariff and financial responsibility related to a service contract?
What is a shipper affiliate?
What is a correction?
How does a person correct an error in a filed service contract?
How do I file a correction to an electronic transmission error?
How are service contract effective dates determined?

NVOCC Service Arrangements
What are Non-Vessel-Operating Common Carrier Service Arrangements ("NSAs")?
How does the NSA option affect NVOCC/shipper business relationships?
Is the use of NSAs restricted in any way?
How does an NVOCC File an NSA?
What terms of a service arrangement may cross reference other material? What may that referenced material be, specifically, can it include a published tariff?
Where must service arrangement "boiler plate" be filed?

Ocean Transportation Intermediaries
What is an ocean transportation intermediary (OTI)?
What is an ocean freight forwarder?
What is an NVOCC?
What are OTI services?
When is an OTI license required?
Can I be both an ocean freight forwarder and an NVOCC?
Do I need an OTI license from the FMC to forward shipments by air or modes of ground transportation in foreign or domestic commerce?
Do I need an OTI license to move cargo by ship domestically within the United States or its territories?
May I share my license to operate as an OTI with an unlicensed person or company?
May I perform ocean freight forwarding activities without being licensed?
How does an ocean freight forwarder OTI get paid?
If I, as a shipper, forward my own shipments, am I entitled to receive ocean freight forwarder compensation from the ocean carrier?
Do I have to renew my license?
My license as an OTI has an “F” or an “N” on it. What does it mean?
If I am licensed and decide I no longer want to operate as an OTI or I am a joint NVOCC and freight forwarder OTI and I no longer want to operate one of my services, what must I do?
Where can I find regulations regarding OTIs?
How do I obtain an OTI license?
How do I submit a license application?
May I apply for an OTI license as both an ocean freight forwarder and an NVOCC on the same Form FMC-18?
Can a lawyer or other third party prepare Form FMC-18?
What documentation must be submitted with application Form FMC-18?
What fees are required?
How long will it take to process my application?
What experience must an applicant have?
Who can be a qualifying individual of an OTI?
How is the work experience of the QI verified?
May one person be a qualifying individual for two or more OTI applicants?
What are the financial responsibility requirements?
How do I file my proof of financial responsibility?
When must I provide proof of financial responsibility?
If I am licensed as both an ocean freight forwarder and an NVOCC, may I provide proof of financial responsibility using one combined instrument?
How do I find a surety bonding company?
I am a licensed OTI and my instrument of financial responsibility is cancelled, what may I expect?
I am an unlicensed foreign NVOCC OTI and my instrument of financial responsibility is cancelled. What may I expect?
If my proof of financial responsibility is cancelled and my license is revoked and I obtain new coverage, what must I do?
What is the Optional Rider for Additional NVOCC Financial Responsibility (“Optional Rider”)?
Can the PRC seek to collect fines and penalties against the entire NVOCC bond?
Is the Optional Rider available to shippers, carriers or others seeking claims for transportation-related activities under the Shipping Act?
Where may I direct questions regarding the shipping regulations of the PRC?
How may I obtain the Optional Rider?
Where may I obtain a copy of the Optional Rider?
May I terminate the Optional Rider and keep the base bond in effect?
How may I determine which NVOCCs have filed an Optional Rider?
What are the requirements for an unincorporated branch office and one that is separately incorporated?
If my headquarters office does not perform OTI services, but my unincorporated branch office performs those services, can I only report the branch office and provide financial responsibility for that office only?
How does an applicant identify its business affiliations or ownership?
Are OTIs required to publish a tariff?
Where do I find the regulations as to publishing a tariff?
How can I find a tariff publisher?
I am already licensed as an OTI. What changes in my operations must I report to the Commission?
What should I do if a sole-proprietor dies, or if a qualifying individual leaves?
What must I do if I incorporate my business? Change my name?
What must I do if I change my headquarters address?
What must I do if I open or close an unincorporated branch office?
What are the requirements of an unlicensed foreign-based NVOCC OTI?
May a foreign-based NVOCC OTI obtain an OTI license?
I am an unlicensed foreign-based NVOCC OTI and I no longer want to serve the United States trades, what must I do?

Moving Household Goods
What are some examples of things that can go wrong on my move?
How do I protect myself and find a reputable mover to move my goods overseas?
Why does my mover need to be FMC licensed and bonded?
The Company’s website states that it is FMC licensed. How can I verify this?
I just gave a deposit to a company that is not licensed. What can I do?
An unlicensed company just picked up my goods and they will not return my calls. What can I do?

Other Maritime Issues
Where do I find the value and weight of the waterborne imports and exports?
Where do I find statistics on the commercial movement of foreign and domestic cargos or waterborne commerce?
What type and how many vessels are calling at U.S. Ports?
What are the top U.S. container ports?
Where do I find transportation statistics?
Where do I find trade statistics?
Where do I find information on the carriage of cargo by water in the U.S. domestic trade?

Passenger Vessel Operators
What is the Federal Maritime Commission’s Passenger Vessel Operator Certification Program (“PVO Program”)?
When is a vessel subject to the PVO program?
Does the program cover non-U.S. citizens?
Does the program cover U.S. citizens who embark a foreign port?
What constitutes “non-performance?”
Is there a separate application form to apply for Certificate (Performance) and a Certificate (Casualty)?
When should the Form FMC-131 application form be filed for a Certificate (Casualty)?
Must I apply for the Certificate (Casualty) at the same time as I apply for the Certificate (Performance)?
When should the casualty coverage be filed with the Commission?
What types of coverage may be filed to establish proof of financial responsibility for casualty?
What can happen if the Certificates are required but not obtained?

Frequently Asked Questions

Tariffs
Q: What is a common carrier tariff?
A:

A tariff is a publication containing the actual rates, charges, classifications, rules, regulations and practices of a common carrier or a conference of common carriers.

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Q: Who must publish a common carrier tariff?
A:

Each vessel operating common carrier, non-vessel-operating common carrier, and conference, except with regard to bulk cargo, forest products, recycled metal scrap, new assembled motor vehicles, waste paper, and paper waste. 46 C.F.R. § 520.3(a).

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Q: How do I file an agreement with the Commission?
A:

Agreements subject to filing are to be submitted to the Secretary of the Commission at 800 North Capitol Street, NW, Washington, DC 20573. Along with the original signed copy of the agreement, the parties are to submit seven extra copies of the agreement and the appropriate filing fee (see 46 CFR 535.401(g)). Certain agreements also require the submission of an Information Form, see 46 CFR 535.501 for applicability.

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Q: How do I get a copy of an agreement?
A:

Contact the Bureau by phone 202-523-5796, by fax 202-523-4372, or via email Tradeanalysis@fmc.gov. In the near future, the public will be able to view and download copies of agreements from this website.

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Q: Can I get a list of agreements by carrier, type, geographic region?
A:

The Bureau can provide listings of agreements indexed on various keys such as individual carrier name, the type of agreement, for example a list of all conferences, and by a particular region of the world, Asia, North Europe, Indian Subcontinent, and the like. Contact the Bureau as indicated above. There is a nominal fee for this service.

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Q: What must be included in a tariff?
A:

Rates, charges, classifications, rules, and practices between all points or ports on a carrier’s or conference’s own route and on any through transportation route that has been established must be included in the published tariff.  Content requirements for tariff provisions include: places between which cargo will be carried; level of ocean transportation intermediary compensation; each terminal or other charge; sample copies of bills of lading; any tariff rules; organization record; commodity descriptions; commodity index; and tariff rate items. 46 C.F.R. § 520.4.

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Q: What types of services are exempt from tariff publication requirements?
A:

Tariff publication exemptions extend to equipment interchange agreements between common carriers subject to 46 C.F.R. Part 520 and inland carriers where such agreements are not referred to in carriers’ tariffs and do not affect the tariff rates, charges or practices of the carriers as well as terminal barge operators in Pacific Slope states transporting containers and containerized cargo by barge between points in the U.S. in certain instances.  46 C.F.R. § 520.13(b)(1), (2), and (3). Also tanker services and non-regularly scheduled liner services, such as with tramp vessel operations are exempt from tariff publication requirements.

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Q: Does the minimum rate display requirement of 46 C.F.R. § 520.6(e) require a list of assessorial charges that actually apply to the shipment?
A:

Yes. Any assessorial charge that will be added to the basic ocean freight rate must be listed individually. If there are other rules or charges that may otherwise affect the shipment under certain circumstances (e.g., minimum quantity rules, quantity discounts, or demurrage) the tariff should also indicate them.

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Q: Does the access date capability required by 46 C.F.R. § 520.10(b) only apply to historical data or does it also apply to future dates?
A:

The requirement that tariffs provide the capability for a retriever to enter an access date to obtain data in effect on that date was primarily intended to apply to historical tariff data. Nonetheless, if carriers know what rates are going to be in effect on some future date, they are free to provide accurate information about such rates in their tariff publication. In these circumstances, access data capabilities should apply to "objects" that will become effective on a future date.

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Q: Can carriers use codes other than those in the Standard Terminology Appendix?
A:

As stated in 46 C.F.R. § 520.5(a), the Standard Terminology Appendix serves as a standard baseline for tariff publishers. However, the rule makes clear that publishers can use additional codes, if they clearly define them in their tariffs.

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Q: What is Form FMC-1?
A:

Form FMC-1 is an internet-based electronic form to collect tariff location addresses and other specific organizational information of conferences, ocean common carriers, OTIs and MTOs. The information is entered directly into the FMC-1 Form on-line via the internet. 

The Commission’s Rules governing Form FMC-1 are located under 46 C.F.R. § 520.3(d) and (e) for common carriers/conferences and 46 C.F.R. § 525.3(f) for marine terminal operators. Electronic submission of the Form FMC-1 data is mandatory under Commission Rules. The system processes the information collected in the electronic form and posts the carriers, ocean transportation intermediaries, conferences, and marine terminal operators’ tariff location addresses on the FMC-1 List at Links to Tariffs located on the Commission’s homepage. The Commission uses the information collected to access the actual tariff publication and review for compliance with Commission rules and regulations. The public uses the FMC-1 List to locate carriers’ tariff location addresses to access tariff publications, and to verify OTI/NVOCC status as set forth under 46 C.F.R. § 515.27(d). Click Here To File a Form FMC-1.  For assistance completing the form, please click the HELP button in the upper right-hand corner of the form or contact the Commission at (202) 523-5856.

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Q: Is Form FMC-1 required in order to offer service pursuant to a tariff(s)?
A:

Yes. Each common carrier (including NVOCCs) and conferences shall notify the Bureau of Trade Analysis , prior to the commencement of common carrier service pursuant to a published tariff, of its organization number, home office address, name and telephone number of the firm’s representative, the location of its tariffs, and the publisher, if any, used to maintain its tariffs, by electronically submitting Form FMC-1 via the Commission’s website at www.fmc.gov. 46 C.F.R. § 520.3(d).

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Q: How are changes submitted to Form FMC-1?
A:

Any changes to the FMC-1 information shall be immediately transmitted to the Bureau of Trade Analysis . 46 C.F.R. § 520.3(d). The filer’s changes can be entered electronically from the Tariff Registration Form (FMC-1) main menu, by selecting "Edit an Existing FMC-1 Form" via the Commission’s website, www.fmc.gov.

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Q: How do I obtain an Organization Number?
A:

The Commission’s staff will provide a unique organization number to a new entity operating as a common carrier or conference in the foreign commerce. 46 C.F.R. § 520.3(d). When an organization changes its name, a new organization number is assigned. The filer completes an "Initial" FMC-1 Form submission and may leave the organization number field blank. A number will be assigned by FMC staff.

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Q: How do I access a carrier or conference automated tariff system?
A:

Go to the Commission’s website, www.fmc.gov, Click on Links to Tariffs, Click on tab for FMC 1 VOCC, or FMC-1 OTI/NVOCC for "accepted filings," scroll down the list alphabetically to the desired carrier, obtain from the Location of Tariff(s) column the carrier’s tariff location address, then logon to the internet using the tariff location address to find the carrier’s tariff publication in the carrier’s automated tariff system ("CATS"). Some CATS may require that you register to obtain a logon and password to access the system. In addition, a reasonable charge may be assessed to access a CATS system.

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Q: When do I file a special permission application?
A:

Where there may be good cause shown to permit a common carrier to deviate from the provisions of rules governing tariffs under part 520, e.g., for issuance of effective dates on less than the statutory notice under the Commission’s rules; or typographical or clerical errors in tariff publication that cause defective tariff material. 46 C.F.R. § 520.14(a) and (b).

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Q: How do I correct a clerical error in a tariff?
A:

An application for special permission ("SP") may be submitted, in letter form in duplicate, to the Bureau of Trade Analysis , accompanied with a filing fee of $195. The application must contain: organization name, number and trade name of the conference or carrier; tariff number and title; and the rate, commodity, or rules related to the application, and the special circumstances which the applicant believes constitutes good cause to depart from the requirements of the Commission’s rules under 46 C.F.R. Part 520, Carrier Automated Tariffs. Should the authority sought under the SP application be granted and assigned a Special Case number, implementation of the authority granted by the Commission must be used in its entirety, including the prompt publishing of the material for which permission was requested. The Applicants shall use the special case number assigned by the Commission. 46 C.F.R. § 520.14(c) and (d).

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Q: What is a special docket application for permission to refund or waive freight charges?
A:

A common carrier or a shipper may file a special docket application seeking permission for a common carrier or conference to refund or waive collection of a portion of freight charges if there is:  an error in the tariff; an error in failing to publish a new tariff; or, an error in quoting a new tariff.  Such application must be submitted to the Office of the Secretary, Federal Maritime Commission.  See the Commission’s Rules of Practice and Procedure at 46 C.F.R. § 502.271 for further information.

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Q: If a tariff is canceled, who should provide written notice of cancellation to the Commission?
A:

Carriers and conferences shall inform BTA, in writing, whenever a tariff is canceled and the effective date of that cancellation. 46 C.F.R. § 520.7(b). A carrier or conference may designate its agent to submit, on its behalf, the written cancellation notice to the Commission.

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Q: Once a tariff has been canceled, superceded, or withdrawn, how long must its data be maintained in a carrier’s publication system?
A:

Carriers and conferences shall maintain the data that appeared in its their tariff publication system for a period of five (5) years from the date such information is superseded, canceled or withdrawn, and shall provide on-line access to such data for two (2) years. After two (2) years, such data may be retained on-line or in other electronic form, and shall be made available to any person or the Commission upon request in a reasonable period of time. Carriers and conferences may charge a reasonable fee for the provision of historical data, not to exceed the fees for obtaining such data on-line.  No fee shall apply to federal agencies. 46 C.F.R. § 520.10(a).

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Q: What if a carrier or conference designates an agent to publish, on its behalf, its tariff in CATS?
A:

It is a carrier’s or conference’s responsibility to publish tariffs in CATS, although they may designate an agent to do so on their behalf. 46 C.F.R. § 520.3(a) and (c). The Commission periodically reviews CATS and may prohibit the use of any system that fails to meet the requirements of rules governing tariffs under 46 C.F.R. Part 520. 46 C.F.R. § 520.10(c).

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Q: What if a carrier or conference fails to pay a designated agent for publishing and maintaining historical tariff data in CATS?
A:

The matter of payment for services between a carrier or conference and its agent involving CATS is a matter between the parties.

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Q: When must my tariff be published?
A:

The tariff must be published on or before transportation services commence thereunder, or on the tariff’s effective date. 46 C.F.R. Part 515.

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Q: Can a non-binding discussion agreement publish a common tariff?
A:

No. The Shipping Act of 1984, as amended only recognizes tariffs of individual common carriers or conferences. Moreover, the definition of "tariff" in 46 C.F.R. § 520.2 states that it is "a publication containing the actual rates, charges, classifications, rules, regulations and practices of a common carrier or a conference of common carriers." The definition further notes that "practices" in tariffs, "in the case of conferences, must be restricted to activities authorized by the basic conference agreement."

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Q: Will the blanket special permission for new tariffs with no increases permitting them to go into effect without the 30 days’ advance notice requirement also apply to controlled carriers?
A:

Yes, to the extent the rates of the controlled carrier are not decreased also. Any action of a controlled carrier in publishing a new tariff that would deviate from other requirements applicable to controlled carriers would require separate special permission.

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Service Contracts
Q: What is a service contract?
A:

A service contract is a contract, other than a bill of lading, between a shipper and an ocean common carrier or an ocean common carrier agreement in which the shipper commits to provide a certain minimum quantity of cargo over a fixed period of time and the ocean common carrier or the ocean common carrier agreement commits to a certain rate or rate schedule and a defined level of service. 46 C.F.R. § 530.3(q).

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Q: Must all service contracts be filed with the Commission?
A:

Generally, yes, although there are exceptions for service contracts for certain commodities:  bulk cargo, forest products, recycled metal scrap, new assembled motor vehicles and waste paper or paper waste. 46 C.F.R. § 530.13.

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Q: Who must file service contracts?
A:

Carrier parties, i.e. ocean common carriers, agreements among ocean common carriers or conferences, are responsible for filing service contracts with the Commission.  46 C.F.R. § 530.5

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Q: How are service contracts filed?
A:

All service contracts must be filed electronically in SERVCON, the Commission’s internet-based filing system.  See 46 C.F.R. Part 530.

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Q: What is SERVCON?
A:

SERVCON is the Federal Maritime Commission’s internet-based filing system for ocean common carrier service contracts and non-vessel-operating common carrier service arrangements ("NSAs").  It is located on the Commission’s website, www.fmc.gov, under SERVCON.  For more information on NSAs, see NSA FAQs on this website.

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Q: Which document formats will the Commission’s SERVCON internet-based filing system accept?
A:

SERVCON accepts service contracts and amendments written in more than 90 off-the-shelf software formats, including e.g., WordPerfect, Microsoft Word, WordStar and ASCII.

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Q: Are there user fees associated with SERVCON?
A:

There is no user fee required at this time for SERVCON filings.

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Q: How do I register to file service contracts?
A:

Anyone wishing to file service contracts on their own behalf or as an agent for an ocean common carrier must register to access the SERVCON system by filing Form FMC-83.

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Q: What is Form FMC-83?
A:

Form FMC-83 is a service contract registration form.   Form FMC-83 must be filed in order for a filer to obtain user identification, logon and password, to access the SERVCON system to file service contracts.

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Q: Who is required to file Form FMC-83?
A:

Carriers or conferences that enter into service contracts subject to the Commission’s rules governing service contracts must file a FMC-83 Form.  46 C.F.R. § 530.5(c).

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Q: How can a copy of Form FMC-83 be obtained and filed with the Commission?
A:

Go to the Commission’s website, www.fmc.gov, click on Forms and Applications, scroll down to For Service Contracts, click on Service Contract Registration (FMC-83), print a copy of the form, fill out the form completely with the information requested, and fax a copy of the completed form to the Office of Service Contracts and Tariffs at (202) 523-5867.  If there are no problems with the FMC-83, a request is forwarded to the Commission’s Office of Information Technology (OIT) to assign a logon and password ID.  OIT will send the ID by certified mail to the person named on Line 7 of the form authorized to access SERVCON and file service contracts.

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Q: Are SERVCON filings confidential?
A:

Yes.  Except for the public essential terms, discussed below in these FAQs, the Commission keeps all service contracts and amendments to service contracts confidential.  Shipping Act of 1984, as amended.  The parties may elect to disclose the terms of their service contracts, if they so agree. 

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Q: Are there any publishing requirements related to service contracts?
A:

Yes. All authorized persons who have a duty to file service contracts under 46 C.F.R. § 530.5 (i.e. carrier parties) must also make available to the public, contemporaneously with the filing of each service contract with the Commission, and in tariff format, a concise statement of the following essential terms ("public ETs"): (1) origin and destination port ranges; (2) the commodity or commodities; (3) cargo minimum quantity or portion; and (4) the duration.  46 C.F.R. § 530.12

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Q: What is an Essential Terms Publication?
A:

An Essential Terms Publication (ETP) is a quasi-tariff formatted publication that contains the public ETs only of a carrier or conference in a single publication made available to the public at the location of the carrier’s or conference’s tariff(s).

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Q: Must the public Essential Terms ETs) appear in any particular format?
A:

Federal law requires that public ETs be made public in "tariff format." Shipping Act of 1984, as amended.  The Commission’s rules require that public ETs be published in a separate part of the carrier party’s tariff publication. 46 C.F.R. § 530.12(c).  Carrier parties may publish public ETs in a separate service contract essential terms publication tariff.  Public ETs may be organized in any manner, e.g., by trade, as a separate tariff type, etc. All public ETs must include a reference to a carrier-assigned service contract ("SC") number.

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Q: Where can I find a common carrier's or conference's public ETs?
A:

The public ETs are available at the common carrier’s or conference’s tariff location.  A list of tariff locations associated with a particular common carrier or conference is available on the FMC’s website Links to Tariffs.

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Q: When must public ETs be published?
A:

Public ETs must be made available to the public contemporaneously with the filing of each service contract with the Commission.  46 C.F.R. § 530.12(a).

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Q: How and where must the public ETs of a non-conference agreement be published?
A:

Where a service contract is entered into by an agreement among ocean common carriers that is not a conference, each individual carrier party to such a service contract must publish the ETs in its individual tariff publication and clearly indicate the relevant FMC-assigned agreement number.  46 C.F.R. § 530.12(c)(2).

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Q: May service contracts cross reference other material, specifically a published tariff?
A:

Service contracts may refer to any widely available published material which is well known in the industry. 46 C.F.R. Part 530. An example of such cross-referencing would be to the currency exchange rates as published in the Wall Street Journal. Such cross-referencing may also include reference to the carrier party’s general rules tariff. Filers should particularly note that the terms of service contracts may not be "uncertain, vague or ambiguous." 46 C.F.R. § 530.8(c)(1).

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Q: Must common service contract standard terms ("boiler plate") be filed in every service contract?
A:

Standard, repetitive or common contract terms ("boiler plate") may either be published as a general rules tariff and cross-referenced to the carrier’s tariff or kept confidential by incorporating the terms into the filed service contract.

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Q: Must service contracts for inland movements in Europe be filed with the Commission?
A:

Unlike U.S. federal law, the European Union views inland movements as separate and distinct from the ocean movement and does not allow common pricing by carriers offering such through movements.  U.S. law, on the other hand, views the entire movement as ocean shipping.  As such, contracts for through movements are service contracts and should be filed in their entirety.  Accordingly, if an ocean common carrier provides continuous transportation involving more than one mode of service (e.g., ship, rail, motor, air) for pickup or delivery at a point beyond the port at which the vessel calls, the service contracts covering the entire intermodal movement must be filed.  If the rate for an intermodal movement between the United States and Europe is computed by adding an ocean contract rate and an inland contract rate, both contracts must be filed with the Commission.

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Q: Must ocean common carriers enter into service contracts?
A:

No.  Ocean common carriers may either offer service pursuant to a tariff or a service contract.  However agreements among ocean common carries must not prohibit or restrict its individual members from offering or negotiating service contracts. Shipping Act of 1984, as amended.

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Q: Who may offer a service contract?
A:

An individual ocean common carrier, conference or an agreement between or among ocean common carriers may enter into a service contract. 46 C.F.R. § 530.2.  NVOCCs may offer NVOCC service arrangements ("NSAs").  See FAQs on NSAs.

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Q: For purposes of service contracts, what is a "shipper"?
A:

A shipper means cargo owner, person for whose account the ocean transportation is provided, the person to whom delivery is to be made, a shippers' association, or NVOCCs that accept responsibility for payment of all applicable charges under the service contract. 46 C.F.R. § 530.3(r).

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Q: Can a freight forwarder act as a shipper party to a service contract?
A:

Generally, no.  See discussion at FMC Order Denying Petition No. P5-98.

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Q: Can a freight forwarder sign a service contract as an agent for a shipper?
A:

In general, one party may sign a service contract "as agent for" or "on behalf of" a second party so long as both parties are clearly identified.  However, it should be clear that it is the second party which is the contract party and it is that party’s cargo, not the agent’s cargo,  that is entitled to service contract rates. 

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Q: Can an NVOCC act as a shipper party to a service contract?
A:

Generally, yes.  To sign service contracts as shipper, an NVOCC must be in compliance with Commission tariff, licensing and financial responsibility regulations, as shown on the shipper status certification.  46 C.F.R. § 530.8(b)(10).

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Q: Must a shipper provide certification of its status under a service contract?
A:

Yes.  The shipper party must certify its shipper status (e.g., owner of the cargo, shippers’ association, NVOCC)  as well as the status of any affiliates with access to service under the service contract, and sign on the signature page of a service contract or amendment.  46 C.F.R. § 530.8(b)(10).

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Q: Who is responsible for verifying that an NVOCC shipper signing a service contract has tariff and financial responsibility related to a service contract?
A:

An NVOCC must provide proof that it has a published tariff and financial responsibility when signing a service contract.  46 C.F.R. § 530.6(c); 46 C.F.R. § 515.27.  It is the responsibility of the ocean common carrier, conference, or ocean common carrier agreement to obtain the proof.  Such information can be obtained from the Commission’s website at its NVOCC List and its NVOCC Tariff List.

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Q: What is a shipper affiliate?
A:

Although "affiliate" is not defined by the Commission’s rules governing service contracts, the Commission is guided by this commonly-accepted definition, such as that included in its licensing and NSA regulations:  associated with, under common control with, or otherwise related through stock ownership or common directors or officers. 46 C.F.R. § 515.11(c); 46 C.F.R. 531.3(b).  

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Q: What is a correction?
A:

A correction is any change to a service contract which has retroactive effect.  46 C.F.R. § 530.10(a)(2).

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Q: How does a person correct an error in a filed service contract?
A:

For clerical or administrative errors in a filed service contract, either of the service contract parties may file an original and duplicate request for a correction with the Commission’s Office of the Secretary within (45) forty-five days of the contract’s filing with the Commission, accompanied by remittance of a $315 service fee.  46 C.F.R. § 530.10(c).

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Q: How do I file a correction to an electronic transmission error?
A:

Commission rules permit VOCCs to correct an original filing that is defective due to an electronic transmission clerical error. The time to correct such SERVCON filing errors is limited to two business days after the initial, defective, electronic transmission. 46 C.F.R. § 530.10(d).

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Q: How are service contract effective dates determined?
A:

A service contract must be filed with the Commission on or before cargo may move under it. The specific beginning and ending dates must be specified in the service contract.  The effective date starts at 12:01 a.m. eastern standard time on the beginning of the effective date, which cannot take place until the service contract is filed.  This rule also applies to effective dates of amendments to service contracts.  46 C.F.R. § 530.3(i).

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NVOCC Service Arrangements
Q: What are Non-Vessel-Operating Common Carrier Service Arrangements ("NSAs")?
A:

An exemption issued by the Federal Maritime Commission (FMC), allows non-vessel-operating common carriers (NVOCCs) to enter into service arrangements with their shipper/customers called non-vessel-operating common carrier service arrangements (NSAs). 46 CFR Part 531.

Under the Commission's rules, an NSA is a written contract, other than a bill of lading or receipt, between one or more NSA shippers and an individual NVOCC or two or more affiliated NVOCCs, in which the NSA shipper makes a commitment to provide a certain minimum quantity or portion of its cargo or freight revenue over a fixed time period, and the NVOCC commits to a certain rate or rate schedule and a defined service level. 46 CFR 531.3(p).

An NSA shipper is the cargo owner, the person for whose account the ocean transportation is provided, the person to whom delivery is to be made, a shippers' association, or a non-vessel-operating common carrier. 46 CFR 531.3(o).

NSAs have been established as a possible alternative for NVOCCs to negotiate confidential shipping arrangements with their shipper customers

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Q: How does the NSA option affect NVOCC/shipper business relationships?
A:

Specifically, the exemption allows individual NVOCCs (including corporately affiliated NVOCCs), who are compliant with the other requirements of the Shipping Act and the FMC's regulations at 46 CFR Part 515 and 46 CFR Part 520, to enter into an NSA with one or more NSA shippers. 46 CFR 531.2. The FMC's rule allows NVOCCs to enter into service arrangements with their customers in lieu of publishing those arrangements in a publicly-available tariff, as otherwise would be required by sections 8(a) and 10 of the Shipping Act.

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Q: Is the use of NSAs restricted in any way?
A:

The FMC limited NVOCC actions through NSAs to ensure shippers and ports are protected in a similar manner under section 10 of the Shipping Act: service rendered under an NSA must be according to rates and charges appearing in a properly filed NSA. 46 CFR 531.6(d)(1); and no NVOCC may employ an NSA to unfairly or unjustly discriminate (with respect to rates or charges), or grant any unreasonable preference or impose any unreasonable prejudice with respect to any port. 46 CFR 531.6(d)(2), (3).

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Q: How does an NVOCC File an NSA?
A:

An NVOCC in compliance with the Commission's regulations needs to complete Form FMC-78, NVOCC Service Arrangement Registration, and file it with the Commission.

Fill Form FMC-78 out completely, and submit to the Office of Service Contracts ("OSCT") by:

  • Fax to (202) 523-5856 or,
  • Mail to OSCT, Bureau of Trade Analysis (BTA), Federal Maritime Commission, 800 North Capitol Street, NW, Washington, DC 20573.

If an agent has been designated to file NSAs with the Commission on an NVOCC's behalf, a delegation of authority must accompany the form.

This form is usually processed in approximately five days. Registrants will be notified by certified mail of their User ID. There are no Commission fees associated either with registering to file or with filing NSA's.

Once an FMC-issued User ID is received, an NVOCC (or its designated publisher or agent) can use the User ID to access the SERVCON system, enter minimal information regarding the NSA filing (e.g., organization number, NSA number, amendment number, and effective date), and upload NSAs into the Commission's automated SERVCON system via the internet.

NSAs must be filled using the complete terms as outlined in 46 CFR 531. Parties may include additional terms and conditions in their filling not outlined in the CFR.

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Q: What terms of a service arrangement may cross reference other material? What may that referenced material be, specifically, can it include a published tariff?
A:

The parties may agree to make their NSAs refer to any widely available published material which is well known in the industry. An example of such cross-referencing would be to the currency exchange rates as published in the Wall Street Journal. Such cross-referencing may also include reference to an NVOCC's general rules tariff. Filers should particularly note that the terms of NSAs may not be "uncertain, vague or ambiguous." 46 CFR 531.9(b)(1). Reference may not be made to a tariff of a common carrier other than that of the NVOCC offering the NSA.

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Q: Where must service arrangement "boiler plate" be filed?
A:

"Boiler plate" may either be published as a general rules tariff and cross-referenced in the NSA or kept confidential by filing the terms in the text of each NSA filed in SERVCON.

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Ocean Transportation Intermediaries
Q: What is an ocean transportation intermediary (OTI)?
A:

An OTI may be either an ocean freight forwarder, a non-vessel-operating common carrier (NVOCC), or both an ocean freight forwarder and an NVOCC.

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Q: What is an ocean freight forwarder?
A:

An ocean freight forwarder is an individual or company in the United States that dispatches shipments from the United States via common carriers and books or otherwise arranges space for those shipments on behalf of shippers.Ocean freight forwarders also prepare and process the documentation and perform related activities pertaining to those shipments.

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Q: What is an NVOCC?
A: An NVOCC is a common carrier that does not operate the vessels by which ocean transportation is provided, and is a shipper in relation to the involved ocean common carrier.

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Q: What are OTI services?
A:

Freight Forwarding OTI services refer to the dispatching of shipments on behalf of others to facilitate shipments by common carriers, including ordering cargo to port; preparing or processing export declarations, bills of lading and other export documentation; booking or confirming cargo space; arranging for warehouse space; arranging cargo insurance; clearing shipments in accordance with United States Government export regulations; preparing and/or sending advance notice of shipments to banks, shippers, and consignees; handling freight monies on behalf of shippers; coordinating the movement of shipments from origin to the vessel; and giving expert advice to exporters.

NVOCC OTI services refers to the provision of transportation by water of cargo between the United States and a foreign country (whether import or export) for compensation without operating the vessels by which the transportation is provided. NVOCC OTI services may include purchasing transportation services from vessel-operating common carriers for resale; payment of port-to-port or multi-modal transportation charges; entering into affreightment agreements with underlying shippers; issuing bills of lading or equivalent documents; arranging and paying for inland transportation on through transportation movements; paying lawful compensation to ocean freight forwarders; leasing containers; and entering into arrangements with origin or destination agents.

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Q: When is an OTI license required?
A: An OTI license is required of any individual or entity which is resident in or incorporated in the United States and performs OTI services in the foreign commerce of the United States.

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Q: Can I be both an ocean freight forwarder and an NVOCC?
A: Yes, an entity can operate as a freight forwarder and as an NVOCC, but generally cannot be compensated for serving in both roles on the same transaction. That is, if you issue your own NVOCC bill of lading and collect ocean freight at your published rate for that shipment, you cannot also collect forwarding compensation on that same shipment.

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Q: Do I need an OTI license from the FMC to forward shipments by air or modes of ground transportation in foreign or domestic commerce?
A: No, although other federal agencies may have specific requirements.

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Q: Do I need an OTI license to move cargo by ship domestically within the United States or its territories?
A:

No, however, there may be requirements imposed by the Surface Transportation Board ("STB"). You may view the STB website at http://www.stb.dot.gov or call the general information phone number at (202) 565-1500 for further information.

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Q: May I share my license to operate as an OTI with an unlicensed person or company?
A: No, only a licensee may operate pursuant to its license.

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Q: May I perform ocean freight forwarding activities without being licensed?
A: Yes, but only in certain situations. A shipper (a person whose primary business is the sale of merchandise) may perform freight forwarding activities on behalf of its own shipments or the shipments of a parent, subsidiary, affiliate, or associated company. An ocean common carrier, or its agent, may perform freight forwarding activities with respect to cargo carried under the carrier’s own bill of lading. Fees for performing these activities must be filed in the carrier’s tariff. However, except as provided, unlicensed freight forwarders may not book or arrange vessel space for others, process shipping documentation or collect freight forwarder compensation from the ocean carriers.

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Q: How does an ocean freight forwarder OTI get paid?
A: In providing its various services, an ocean freight forwarder charges fees to its customers (the shippers) and may also collect compensation from the common carrier in accordance with the terms of its tariff.

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Q: If I, as a shipper, forward my own shipments, am I entitled to receive ocean freight forwarder compensation from the ocean carrier?
A: No, only licensed OTI freight forwarders may receive forwarder compensation. Freight forwarders may not receive compensation on shipments in which they have a beneficial interest.

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Q: Do I have to renew my license?
A: No, but if a license is surrendered or revoked by the Commission for cause, you must reapply.

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Q: My license as an OTI has an “F” or an “N” on it. What does it mean?
A: The “F” or “N” identifies a licensee as a freight forwarder (“F”) or an NVOCC (“N”).

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Q: If I am licensed and decide I no longer want to operate as an OTI or I am a joint NVOCC and freight forwarder OTI and I no longer want to operate one of my services, what must I do?
A:

If you no longer want to operate as an OTI, you must:

- Surrender your license to the Bureau of Certification and Licensing, Federal Maritime Commission, 800 North Capitol Street, N.W., Washington, D.C. 20573.

- Advise your financial responsibility provider, and if you are an NVOCC, your tariff publisher, that you no longer are operating as an OTI.

The Commission will issue you a letter of voluntary surrender and the surrender will be effective the date your license was received by the Commission. If you are an NVOCC OTI, your FMC-1 listing will be designated as inactive on the Commission website. A notice of the surrender will be published in the Federal Register. You may no longer offer OTI services once you have surrendered your license. If you are a joint NVOCC/freight forwarder OTI and wish to surrender a portion of your license, you must notify the Commission and your financial responsibility provider of your surrender. A letter of surrender will be issued to you with regard to the surrendered service and a notice published in the Federal Register. You must contact your financial responsibility provider to cancel the coverage of the surrendered service. If you are surrendering the NVOCC portion of your license, you must notify your tariff publisher to cancel your tariff and the Commission will designate your FMC-1 listing as inactive. You will be issued a new license indicating the service you will continue to offer and you must return the joint "NF" license that you held. A reissuance notice will be published in the Federal Register.

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Q: Where can I find regulations regarding OTIs?
A:

Regulations governing OTIs can be viewed on the Commission’s website at www.fmc.gov. Please click on the "Regulations" heading. Part 515, Licensing, Financial Responsibility Requirements, and General Duties for Ocean Transportation Intermediaries, contains the regulations relating to OTIs. In addition, Part 520, Carrier Automated Tariffs, Part 530, Service contracts, and Part 531, NVOCC Service Arrangements, apply to NVOCC OTIs.

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Q: How do I obtain an OTI license?
A:

Submit a completed Form FMC-18 to the Commission demonstrating that the applicant has the required experience and character to offer OTI services. The applicant must include the appropriate fee and documentation supporting the application and provide evidence of financial responsibility for licensing. Commission staff will review the application, contact references and conduct an investigation of the applicant. If staff determines the applicant has the requisite experience and character, an OTI license will be issued.

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Q: How do I submit a license application?
A:

Applicants must file Form FMC-18 in duplicate. This form may be downloaded and printed from the Commission’s website at www.fmc.gov (click on "Forms" under "Bureau of Certification and Licensing") or obtained from the Office of Ocean Transportation Intermediaries. The application must be accompanied by a money order, a certified check, cashier’s check, or a personal check made payable to the Federal Maritime Commission. The fee for an initial application is $825, and for an amended application, $525. Failure to include the proper fee with your application will cause it to be returned without processing. The completed application may be mailed or sent by courier to:

Federal Maritime Commission
Bureau of Certification and Licensing
800 North Capitol Street, NW
Washington, D.C. 20573

If you require evidence of delivery, please enclose a stamped, self-addressed envelope and an extra copy of the cover letter or the first page of the application. Commission staff will date stamp the extra copy of the cover letter or the first page of the application and return it to you.

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Q: May I apply for an OTI license as both an ocean freight forwarder and an NVOCC on the same Form FMC-18?
A: Yes. When applying for both NVOCC and ocean freight forwarder authority on the same application, the filing fee is $825. If the applicant is an existing licensed NVOCC OTI and wishes to add freight forwarding service to its license or is an existing licensed freight forwarder and wishes to add NVOCC OTI service to its license, the fee is $525.

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Q: Can a lawyer or other third party prepare Form FMC-18?
A:

Yes, but the Form FMC-18 must be signed by the applicant.

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Q: What documentation must be submitted with application Form FMC-18?
A:

Documentation that must be submitted with Form FMC-18 includes: Proof of the applicant’s name and existence: If sole proprietor: business license and driver’s license If corporation: articles of incorporation and certificate of good standing (or its equivalent) If partnership: partnership agreement If a trade name is used: fictitious name statement (or equivalent) issued by the state Proof of the qualifying individual’s position: If a corporation:corporate minutes or resolution showing the appointment of the qualifying individual as an officer of the applicant corporation If a partnership: partnership agreement

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Q: What fees are required?
A: As noted above, the fee for an initial application for an OTI license is $825. The fee for applications for changes in operations that require the reissuance of a license is $525. When applying for both NVOCC and ocean freight forwarder authority on the same application, the filing fee is $825. All payments may be made by money order, certified check, cashier’s check, or personal check made payable to “Federal Maritime Commission.” Please do not send cash. Failure to include the proper fee with your application will cause it to be returned without processing. Fees will not be refunded in any instance where the application has been processed in whole or in part.

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Q: How long will it take to process my application?
A: Applications are normally approved within 45 days from receipt of the application, assuming the application is complete and the Commission’s investigation does not reveal any circumstances that would preclude licensing.

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Q: What experience must an applicant have?
A: The applicant must designate a qualifying individual who has a minimum of three (3) years’ experience in OTI activities in the United States. A foreign NVOCC seeking to be licensed must also demonstrate that its proposed qualifying individual has a minimum three years experience in OTI activities. However, such experience may be gained outside of the United States. Academic study or course work may not be substituted for this experience. In addition, a potential qualifying individual must possess the necessary character to render OTI services.

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Q: Who can be a qualifying individual of an OTI?
A:

A qualifying individual is the person who possesses the OTI experience and necessary character to qualify the OTI applicant for licensing. The qualifying individual must be:

(1) for a sole proprietorship, the applicant sole proprietor.

(2) for a partnership, at least one of the active managing partners, but all partners must execute the application.

(3) for a corporation, at least one of the active corporate officers. Corporate officers include president, vice president, secretary or treasurer. Positions which are largely descriptive of job function, i.e., director of operations or vice president of export, typically are not recognized by state authorities as officers of a corporation.

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Q: How is the work experience of the QI verified?
A: The application must provide the name, address, telephone number, position, and work relationship of at least 3 non-related references who have first hand knowledge of the QI's work experience.

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Q: May one person be a qualifying individual for two or more OTI applicants?
A: A qualifying individual of one active licensee may serve as the qualifying individual of another OTI only if both entities are commonly owned or where one directly controls the other. Separately incorporated branch offices may fit this definition.

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Q: What are the financial responsibility requirements?
A:

Every OTI must furnish proof of acceptable financial responsibility in the form of a surety bond, insurance, or guaranty to cover its transportation-related activities while the OTI is acting as an ocean freight forwarder or an NVOCC.

An ocean freight forwarder must furnish proof of financial responsibility in the amount of $50,000 plus $10,000 for each unincorporated branch office in the United States.

 An NVOCC operating in the United States must furnish proof of financial responsibility in the amount of $75,000 plus $10,000 for each unincorporated branch office in the United States.

An unlicensed, foreign-domiciled OTI must furnish proof of financial responsibility in the amount of $150,000.

A licensed foreign-domiciled OTI must furnish proof of financial responsibility in the amount of $75,000 plus $10,000 for each additional unincorporated branch office in the United States (not counting the unincorporated presence it has established in the United States to qualify for licensing).

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Q: How do I file my proof of financial responsibility?
A:

Typically, applicants provide proof of financial responsibility in the form of a surety bond filed on Form FMC-48. This Form may be downloaded from the Commission’s website or obtained from the Office of Ocean Transportation Intermediaries or the Office of Passenger Vessels and Information Processing. The proof of financial responsibility must be signed by both a representative of the OTI and the financial responsibility provider.

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Q: When must I provide proof of financial responsibility?
A: You may file proof of financial responsibility with your application to save time. You must file proof of financial responsibility upon notification by the Commission that your application has been approved. The license will not be issued until the Commission has received acceptable proof of financial responsibility. The applicant’s name as principal on the proof of financial responsibility must match exactly the legal name of the applicant, including abbreviations, punctuation, capitalization and assumed or trade names. The address on the proof of financial responsibility must be that of the headquarters office, and the addresses of unincorporated branch offices must be listed and the amount of the proof of financial responsibility increased accordingly. In the case of surety bonds, a power of attorney issued by the surety must be attached to the bond. If more than six (6) months lapse from the time the Commission approves an application and the date it receives the proof of financial responsibility, the Commission may undertake a supplementary investigation to determine the continued qualification of the applicant. The fee for any such supplementary investigation is $225. Should the Commission not receive proof of financial responsibility from the applicant within two (2) years from the date of approval, the Commission will consider the application void.

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Q: If I am licensed as both an ocean freight forwarder and an NVOCC, may I provide proof of financial responsibility using one combined instrument?
A: No. Separate proofs of responsibility must be provided. The NVOCC proof of financial responsibility will only cover claims arising from the NVOCC’s transportation-related activities and the freight forwarder proof of financial responsibility will only cover claims arising from its freight forwarder services.

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Q: How do I find a surety bonding company?
A:

The Department of Treasury maintains a list of approved surety bonding companies (Circular 570). It can be viewed at their website: http://www.fms.treas.gov/c570/index.html. You also may contact the Department of Treasury in writing at the following address:

U.S. Department of Treasury Financial Management Service
(FMS) Surety Bond Branch
3700 East-West Highway Room 6FO7
Hyattsville, MD 20782.

You may also call FMS at (202) 874-6850 or send a facsimile to (202) 874-9978.

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Q: I am a licensed OTI and my instrument of financial responsibility is cancelled, what may I expect?
A: The financial responsibility provider will send notice to the Commission that your coverage will be terminated. Termination becomes effective 30 days after receipt by the Commission of the notice or the date designated by the provider if the cancellation date is greater than 30 days. The Commission will issue you a letter notifying you of the provider’s cancellation and the effective date of the cancellation. The provider, and if applicable, your tariff publisher, will receive a copy of this letter. The letter advises you that your license will be revoked by the Commission without hearing or other proceeding after the effective date of the cancellation unless you provide replacement coverage or the provider issues a recission of the cancellation. If you are an NVOCC OTI, you will be directed to cancel all NVOCC tariffs by the cancellation date. If you fail to provide replacement coverage, an Order of Revocation will be issued to you and notice of the revocation will be published in the Federal Register. Revocation is effective on the date of the coverage cancellation. You will be ordered to return your license and will be prohibited from performing OTI services. If you are an NVOCC OTI, the Commission will designate your FMC-1 listing as inactive.

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Q: I am an unlicensed foreign NVOCC OTI and my instrument of financial responsibility is cancelled. What may I expect?
A: The financial responsibility provider will send notice to the Commission that your coverage will be terminated. Termination becomes effective 30 days after receipt by the Commission of the notice or the date designated by the provider if the cancellation date is greater than 30 days. The Commission will issue you a letter notifying you of the provider’s cancellation and the effective date of the cancellation. The provider and your tariff publisher will receive a copy of this letter. The letter directs you to cancel your tariffs by the effective date of the cancellation and advises that you may no longer operate as an OTI NVOCC in the foreign trades of the United States. The Commission will designate your FMC-1 filing as inactive.

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Q: If my proof of financial responsibility is cancelled and my license is revoked and I obtain new coverage, what must I do?
A:

If the effective date of the new coverage is no later than the effective date of the cancellation of the prior coverage (and license revocation effective date), you must notify the Office of Passenger Vessels and Information Processing by phone at (202) 523-5818, facsimile at (202) 523-5830 or e-mail at OTIbonds@fmc.gov and submit the replacement coverage. In most cases you will be reissued a license effective the date of the prior coverage cancellation and license revocation. If you are an NVOCC OTI, you will need to have your tariff publisher file a replacement FMC-1 form and publish a replacement tariff. If there is a break in OTI bond coverage, you will need to reapply for licensing by submitting Form FMC-18, a fee of $825 and the replacement coverage.

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Q: What is the Optional Rider for Additional NVOCC Financial Responsibility (“Optional Rider”)?
A:

The Optional Rider (located on the FMC Forms Page) is a rider that NVOCCs serving the U.S.-China Trade may attach to their NVOCC bond to meet the NVOCC licensing requirements of the People’s Republic of China ("PRC"). The rider is a convenience offered by the Commission to U.S. NVOCCs as a result of a bilateral maritime agreement between the United States and the PRC. The agreement’s Memorandum of Consultations provides that the PRC will not require U.S. NVOCCs to make a cash deposit in a Chinese bank, as long as the NVOCC:

(1) is a legal person registered by U.S. authorities;

(2) obtains an OTI License from the Commission; and

(3) provides evidence of financial responsibility in the total amount of $96,000. The rider adds an additional $21,000 to the $75,000 bond already maintained by the NVOCC as a condition of licensing.

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Q: Can the PRC seek to collect fines and penalties against the entire NVOCC bond?
A: No. The PRC may only collect fines and penalties for violations of its shipping statutes and regulations from the Optional Rider. It may not collect such fines and penalties from the base $75,000 bond.

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Q: Is the Optional Rider available to shippers, carriers or others seeking claims for transportation-related activities under the Shipping Act?
A: No. The Optional Rider is available only to provide coverage should the PRC seek fines and penalties against the NVOCC for violation of its shipping laws.

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Q: Where may I direct questions regarding the shipping regulations of the PRC?
A: The Commission cannot provide guidance for questions regarding the shipping regulations of the PRC. You should contact the PRC Ministry of Communications to obtain advice.

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Q: How may I obtain the Optional Rider?
A: You may contact the underwriter of your OTI NVOCC bond to determine whether it will be willing to issue an Optional Rider to your bond. If so, it will file the rider to your OTI NVOCC bond. The Optional Rider will be effective on the date shown in 1.c. of the Optional bond.

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Q: Where may I obtain a copy of the Optional Rider?
A:

You may view and copy the Optional Rider forms under the Bureau of Certification and Licensing/Forms heading on the Commission’s website at www.fmc.gov. The Optional Rider for the individual OTI bond form, Form FMC-48, is numbered Form FMC-48A and the Optional rider for the OTI group bond, Form FMC-69, is numbered Form FMC- 69-A.

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Q: May I terminate the Optional Rider and keep the base bond in effect?
A: Yes. The Optional Rider may be terminated by either the NVOCC or the surety. Termination will become effective 30 days after receipt of the Notice of Termination by the Commission and proof that the PRC Minister of Communication has been notified.

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Q: How may I determine which NVOCCs have filed an Optional Rider?
A: You may consult the OTI List on the Commission’s website and look at the Optional Bond Rider for China Trade column. A date in that field indicates the effective date of the Optional Rider on file with the Commission for the corresponding NVOCC. .

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Q: What are the requirements for an unincorporated branch office and one that is separately incorporated?
A: A branch office is any office in the United States maintained by or under the control of a licensee, performing OTI services, that operates under a common corporate charter. Individual unincorporated branch offices are not required to be licensed provided that they have been reported to the Commission and are covered by increased financial responsibility. A separately incorporated branch office is one operating under a separate corporate charter from its parent or affiliated licensee. Each separately incorporated branch office must provide its own proof of financial responsibility and be separately licensed, but may have the same qualifying individual.

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Q: If my headquarters office does not perform OTI services, but my unincorporated branch office performs those services, can I only report the branch office and provide financial responsibility for that office only?
A: No. Even though the headquarters office does not provide OTI services, its address must appear on the financial responsibility coverage as the headquarters. The branch office must also appear on the coverage and the coverage increased $10,000 for that branch office.

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Q: How does an applicant identify its business affiliations or ownership?
A: Business ownership and all related business affiliations must be explained on the application form by providing the names, addresses, and contact numbers. The percentage of ownership must be indicated and total 100%.

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Q: Are OTIs required to publish a tariff?
A: Freight forwarders are not required to publish tariffs. NVOCCs are required to publish tariffs. However, if a separately incorporated and licensed NVOCC branch office performs OTI services solely for the headquarters office, the branch office does not need to publish its own tariff. The branch office, in this instance, however, must still file an FMC-1 form and indicate the location of the headquarters tariff.

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Q: Where do I find the regulations as to publishing a tariff?
A:

Tariff regulations may be found at 46 CFR Part 520. These are accessible at the Commission website at www.fmc.gov. (Click on "Regulations")

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Q: How can I find a tariff publisher?
A:

A list of tariff publishers can be obtained from the Commission. You may contact the Bureau of Trade Analysis, Office of Service Contracts and Tariffs by telephone at (202) 523-5856.

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Q: I am already licensed as an OTI. What changes in my operations must I report to the Commission?
A: Generally, all changes in the information contained in a licensee’s initial application must be reported to the Commission. A replacement or the addition of a qualifying individual requires Commission approval. In addition, the transfer of a license or change in legal name, including trade name, requires Commission approval. Changes in business structure or address of headquarters or branch offices must be reported. In most instances, changes must be reported within 30 days from their occurrence.

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Q: What should I do if a sole-proprietor dies, or if a qualifying individual leaves?
A: If a licensed sole-proprietor dies, the licensee’s executor, administrator, heirs, or assign(s) may continue operating only for those shipments for which the deceased had undertaken to provide OTI services. The death must be reported to the Commission and to all principals and shippers within 30 days. The acceptance or solicitation of any other shipments is prohibited until a new license is issued. If the qualifying individual of a partnership or corporation leaves, the licensee must report the departure to the Commission within 30 days. Within this same 30 days, the licensee must nominate and detail the OTI experience of another managing partner or officer to qualify the licensee. The licensee may continue to operate while the Commission investigates the qualifications of the newly designated qualifying individual.

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Q: What must I do if I incorporate my business? Change my name?
A: Newly incorporated licensees, or licensees that have changed their names, must file an amended FMC-18. A fee of $525 will be charged to reissue the license. A corporate charter or amended corporate charter must accompany the application.

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Q: What must I do if I change my headquarters address?
A: If you move, report your new address by letter or on an amended FMC-18. The Commission does not charge for such notification. You must also notify your financial responsibility provider to amend your coverage to show the new address. If you are an NVOCC OTI, you will need to contact your tariff publisher so that a revised FMC-1 Form is filed and your tariff is updated.

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Q: What must I do if I open or close an unincorporated branch office?
A: If you close an unincorporated branch office which was used to perform OTI services, or open an unincorporated branch office, you will need to report this change to the Commission by letter or amended Form FMC-18. Further, you will need to contact your financial responsibility provider so that your coverage is amended to reflect the change. The Commission charges no fees for changes regarding unincorporated branch offices.

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Q: What are the requirements of an unlicensed foreign-based NVOCC OTI?
A: A foreign-based OTI NVOCC that is not resident in, or incorporated or established under, the laws of the United States and intends on remaining unlicensed, must file proof of financial responsibility in the amount of $150,000. It must also identify an agent for service of process in the United States and use a licensed OTI for any OTI services performed in the United States on its behalf. It must also file Form FMC-1 with the Commission and publish a tariff.

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Q: May a foreign-based NVOCC OTI obtain an OTI license?
A: A foreign-based NVOCC OTI may obtain a license by following the requirements mentioned above for obtaining a license. Its qualifying individual may obtain experience outside the United States. The NVOCC must also establish an unincorporated presence in the United States that meets the requirements of the state in which it is located. If the Commission approves the application, the OTI must provide acceptable proof of financial responsibility in the amount of $75,000 plus $10,000 for each additional unincorporated branch office in the United States (not counting the presence established for licensing purposes).

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Q: I am an unlicensed foreign-based NVOCC OTI and I no longer want to serve the United States trades, what must I do?
A:

You must notify the Office of Passenger Vessels and Information Processing by phone at (202) 523-5818, facsimile at (202) 523-5830 or e-mail at OTIbonds@fmc.gov that you no longer are operating in the United States trades. You must also notify your tariff publisher and your financial responsibility provider. The Commission will designate your FMC-1 listing as inactive. After this is done, you are prohibited from providing OTI NVOCC services in the foreign commerce of the United States.

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Moving Household Goods
Q: What are some examples of things that can go wrong on my move?
A:

The Commission receives a number of complaints. Some frequent problems encountered are:

  • Late shipments
  • The moving company cannot be reached
  • The moving company is demanding additional charges such as storage charges, incurred through no fault of  the consumer.
  • The moving company claims the original estimate as to weight or measure was inaccurate, and demands additional charges.
  • The shipment cannot be located, and no one seems to have any idea where it is.
  • Goods are damaged and the consumer paid for insurance, but the moving company did not purchase any insurance on behalf of the consumer.

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Q: How do I protect myself and find a reputable mover to move my goods overseas?
A:

We strongly urge all individuals undertaking an international move to hire a moving company that is FMC licensed and bonded. If you have questions regarding a company you may call FMC’s Office of Consumer Affairs & Dispute Resolution Services at 202-523-5807.

It is also important to receive several quotes from different companies who have performed an onsite inspection of your goods. Do not rely on a company’s telephone quotations as these are often inaccurate. For additional information on selecting a mover please visit www.protectyourmove.gov.

Avoid rogue movers who may offer low quotes but are not FMC licensed and bonded. Unlicensed movers may promise low rates but often charge 2-3 times the promised amount and hold the consumer’s goods hostage for more money. There are several red flags associated with rogue movers. For example:

  • No onsite inspection of goods or only provides a phone estimate
  • Refusal to accept credit cards and requests for large upfront cash deposits
  • Lack of a locak address or licensing information

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Q: Why does my mover need to be FMC licensed and bonded?
A:

Federal law (i.e., the Shipping Act of 1984) requires Ocean Transportation Intermediaries to be licensed and bonded. This provides protection for consumers. In the event that there is a transportation dispute with the company that cannot be resolved, the consumer may submit a claim against that company’s bond. In cases where consumers hire unlicensed/ unbonded entities it is much more difficult to seek recovery.

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Q: The Company’s website states that it is FMC licensed. How can I verify this?
A:

Rogue movers often claim to be FMC licensed when they are not and provide false licensing numbers. The only way to guarantee that your mover is licensed is to confirm that the mover is FMC licensed and bonded on our website.

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Q: I just gave a deposit to a company that is not licensed. What can I do?
A:

In many situations the best thing to do is to cancel the shipment, cut your losses, and hire a licensed company. While you may lose the deposit you save more time, money, and energy in the long run.

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Q: An unlicensed company just picked up my goods and they will not return my calls. What can I do?
A:

Please call the Office of Consumer Affairs & Dispute Resolution Services immediately at 202-523-5807, or email to complaints@fmc.gov. Someone will assist you in attempting to locate your goods and ensure delivery.

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Other Maritime Issues
Q: Where do I find the value and weight of the waterborne imports and exports?

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Q: Where do I find statistics on the commercial movement of foreign and domestic cargos or waterborne commerce?

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Q: What type and how many vessels are calling at U.S. Ports?

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Q: What are the top U.S. container ports?

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Q: Where do I find transportation statistics?

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Q: Where do I find trade statistics?

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Q: Where do I find information on the carriage of cargo by water in the U.S. domestic trade?

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Passenger Vessel Operators
Q: What is the Federal Maritime Commission’s Passenger Vessel Operator Certification Program (“PVO Program”)?
A:

The Office of Passenger Vessels and Information Processing at The Federal Maritime Commission ("Commission") issues Certificates (Performance) and Certificates (Casualty) to cruise lines which have provided proof of financial responsibility in an amount sufficient to reimburse passengers for claims against the cruise line for failure to perform cruises, and claims to cover death or injury to passengers and other persons.

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Q: When is a vessel subject to the PVO program?
A:

A vessel is subject to the PVO program when: 

(1)  the vessel has berth or stateroom accommodations for 50 or more passengers, and
(2) the vessel embarks passengers at U.S. ports.

To be considered a passenger, the individual must have embarked at a U.S. port and purchased a ticket entitling him to water transportation aboard that vessel.

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Q: Does the program cover non-U.S. citizens?
A: Yes. The regulations do not make a distinction as to citizenship of the passenger.

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Q: Does the program cover U.S. citizens who embark a foreign port?
A:

No. The program covers only those passengers who embark at a U.S. port, regardless of citizenship.

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Q: What constitutes “non-performance?”
A:

In general, non-performance is the failure to commence or complete cruises upon which payment has been made. To date, the instances of non-performance which resulted in a payout from the coverage filed as proof of financial responsibility have been caused by the bankruptcy of a cruise line.

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Q: Is there a separate application form to apply for Certificate (Performance) and a Certificate (Casualty)?
A:

No. The same form (Form FMC-131) is used to apply for either Certificate. The applicant needs to indicate on the form which type of certificate is requested.

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Q: When should the Form FMC-131 application form be filed for a Certificate (Casualty)?
A:

An application for Certificate (Casualty) should be filed with the Office of Passenger Vessels and Information Processing at least 60 days in advance of the first sailing. In addition, an amended application or written description is required to be filed within 5 days should a change in service occur which results in a decrease or increase in the amount of coverage required.

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Q: Must I apply for the Certificate (Casualty) at the same time as I apply for the Certificate (Performance)?
A:

No. You may apply at different times. In most cases, the cruise line will apply for the Certificate (Performance) on a new vessel, much earlier than the Certificate (Casualty), since the Certificate (Performance) is required before advertising may begin but the Certificate (Casualty) is required before embarkation.

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Q: When should the casualty coverage be filed with the Commission?
A: Casualty coverage should be filed with the Form FMC-131 application for Certificate (Casualty) or shortly thereafter.

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Q: What types of coverage may be filed to establish proof of financial responsibility for casualty?
A:

Cruise lines file acceptable guaranties or insurance. The guarantor must be acceptable to the Commission, i.e., a protection and indemnity association with sufficient assets in the U.S. The insurance company must have an acceptable financial rating. The guaranty form is available by clicking on the Forms link at the Bureau of Certification and Licensing home page. Please contact the Office of Passenger Vessels and Information Processing to ensure the coverage to be provided is acceptable.

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Q: What can happen if the Certificates are required but not obtained?
A:

U.S. Customs is required to refuse clearance to any vessel that is required to have a Certificate (Performance) and a Certificate (Casualty) but has failed to secure such certificates from the Commission. In addition, the Commission may impose civil penalties of $220 per passage sold against any cruise line it finds to be in violation of the PVO Certification Program.

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