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Hong Kong Company Fined for Violating U.S. Shipping Regulations

The Federal Maritime Commission announced on 12 May that it recently completed compromise agreements recovering a total of US$840,000 in civil penalties from five ocean transportation intermediaries. Of special note is a US$300,000 payment made by a registered non-vessel-operating common carrier with its principal office in Hong Kong to settle charges that it (i) misrepresented cargo to be that of certain named shippers to obtain the benefit of lower rates applicable under a service contract and (ii) provided OTI services to its customers at rates not in accordance with its NVOCC tariff.

The Shipping Act requires all NVOCCs operating in U.S. trades to publish a tariff, which must be open for public inspection and show all rates, charges, classifications, rules and practices between all points or ports on their service routes. Tariffs must be published after a licence has been issued and prior to commencement of services. A NVOCC must provide the FMC its organisation name, home office address, name and telephone number of the firm’s representative, the location of its tariff(s) and the publisher used to maintain its tariff(s) and must submit that information using Form FMC-1. Once Form FMC-1 is reviewed, an organisation number will be assigned. If there is any change to the information on Form FMC-1 it must be immediately submitted to the Commission. A non-U.S.-based NVOCC must list in its tariff an agent for service of process in the United States.

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