26506 Federal Register / Vol. 65, No. 89 / Monday, May 8, 2000 / Rules and Regulations

TABLE 8 TO SUBPART PPP.—ROUTINE REPORTS REQUIRED BY THIS SUBPART

Reference Description of report Due date

§ 63.1439(b) and subpart A of this part ............. Refer to § 63.1439(b), Table 1 of this subpart,

and to subpart A of this part.

Refer to subpart A of this part.

§ 63.1439(e)(3) ................................................... Initial notification .............................................. New affected sources w/ initial start-up at

least 90 days after June 1, 1999: submit

the application for approval of construction

or reconstruction in lieu of the initial notification report.

New affected sources w/ initial start-up prior

to 90 days after June 1, 1999:by 90 days

after June 1, 1999.

§ 63.1439(e)(4) ................................................... Precompliance Report a .................................... Existing affected sources: 12 months prior to

compliance date.

New affected sources: with the application for

approval of construction or reconstruction.

§ 63.1439(e)(5) ................................................... Notification of Compliance Status b .................. Within 150 days after the compliance date.

§ 63.1439(e)(6) ................................................... Periodic Reports .............................................. Semiannually, no later than 60 days after the

end of each 6-month period. See

§ 63.1439(e)(6)(i) for the due date for this

report.

§ 63.1439(e)(6)(iii) .............................................. Quarterly reports for sources with excursions

(upon request of the Administrator).

No later than 60 days after the end of each

quarter.

§ 63.506(e)(7)(i) .................................................. Storage Vessels Notification of Inspection ...... At least 30 days prior to the refilling of each

storage vessel or the inspection of each

storage vessel.

aThere may be two versions of this report due at different times; one for equipment subject to § 63.1434 and one for other emission points

subject to this subpart. bThere will be two versions of this report due at different times; one for equipment subject to § 63.1434 and one for other emission points subject to this subpart.

* * * * *

[FR Doc. 00–10418 Filed 5–5–00; 8:45 am]

BILLING CODE 6560–50–P

FEDERAL MARITIME COMMISSION

46 CFR Parts 515, 520, 530 and 535

[Docket No. 99–10]

Ocean Common Carriers Subject to the

Shipping Act of 1984

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

SUMMARY: The Federal Maritime

Commission is amending its regulations

implementing the Shipping Act of 1984

to clarify the definition of ‘‘ocean

common carrier’’ to reflect the

Commission’s interpretation of the term.

As a result, only common carriers that

operate vessels in at least one United

States trade will be subject to these

rules.

DATES: This rule becomes effective

August 7, 2000.

FOR FURTHER INFORMATION CONTACT:

Thomas Panebianco, General Counsel,

Federal Maritime Commission, 800

North Capitol Street, N.W., Room 1018,

Washington, D.C. 20573, (202) 523–

5740.

SUPPLEMENTARY INFORMATION:

Background

The Federal Maritime Commission

initiated this proceeding by Notice of

Proposed Rule (‘‘NPR’’) published in the

Federal Register on June 25, 1999. 64

FR 34183. The NPR noted that the

Commission was proposing to amend

several of its regulations to clarify the

definition of ‘‘ocean common carrier’’

contained in section 3(16) of the

Shipping Act of 1984 (‘‘Shipping Act’’),

46 U.S.C. app. § 1702(16), as amended

by the Ocean Shipping Reform Act of

1998 (‘‘OSRA’’), P.L. 105–258, 112 Stat.

1902, to reflect the Commission’s theninterpretation of that term. In essence,

the proposed rule defined ‘‘ocean

common carrier’’ to include only

common carriers that operate vessels

serving ports in at least one United

States trade.

The NPR solicited comment on the

proposed rule from the public, and the

Commission received comments from:

(1) The Ocean Carrier Working Group

(‘‘OCWG’’); (2) Maersk, Inc.; (3) Samskip

Hf (‘‘Samskip’’); (4) the Council of

European & Japanese National

Shipowners’ Associations (‘‘CENSA’’);

(5) the Calcutta, East Coast of India and

Bangladesh Conference and Waterman

Steamship Corporation (‘‘India

Carriers’’);(6) the National Industrial

Transportation League (‘‘NITL’’); (7) the

American International Freight

Association & Transportation

Intermediaries Association (‘‘AIFA/

TIA’’); and (8) Ocean World Lines, Inc.

(‘‘OWL’’).

The NPR

The NPR noted that the Commission

had previously proposed a new

definition for the term ‘‘ocean common

carrier’’ in the context of the rulemaking

governing agreements which was

undertaken to implement OSRA. Docket

No. 98–26, Ocean Common Carrier and

Marine Terminal Operator Agreements

Subject to the Shipping Act of 1984, 64

FR 11236, March 8, 1999. However, the

Commission received only two

comments on that particular proposal

and subsequently decided to provide

the public an additional opportunity to

comment through this proceeding. The

NPR then stated that the heart of the

matter was how to distinguish between

ocean common carriers (‘‘OCCs’’) and

non-vessel-operating common carriers

(‘‘NVOCCs’’). The distinction is

significant under the Shipping Act

because only OCCs can enter into and

file agreements with the Commission

and receive antitrust immunity therefor.

In addition, only OCCs can offer service

contracts to shippers, although NVOCCs

can enter into service contracts as

shippers.

The NPR conceded that at first glance

the defining of an OCC as a ‘‘vessel

operator’’ does not appear to be

ambiguous. However, the Commission

stated that its staff has encountered

Federal Register / Vol. 65, No. 89 / Monday, May 8, 2000 / Rules and Regulations 26507

several complex situations in attempting

to apply the term, e.g., where and when

vessels operated and what type of

vessels are employed. In this regard, the

NPR noted that various bureaus have

interpreted the Shipping Act to require

that an OCC must operate a vessel

calling at a U.S. port, and that if a

carrier is an OCC in one trade, it should

be considered an OCC for all U.S.

trades. The proposed rule therefore

codified this approach and stated:

Ocean common carrier means a common

carrier that operates, for all or part of its

common carrier service, a vessel on the high

seas or the Great Lakes between a port in the

United States and a port in a foreign country,

except that the term does not include a

common carrier engaged in ocean

transportation by ferry boat, ocean tramp, or

chemical parcel-tanker.

The NPR noted that this multi-trade

approach avoids making interpretations

as to a carrier’s status on a trade-bytrade basis, which would be

administratively impractical and might

prompt a less efficient redeployment of

vessels. The proposal was also intended

to clarify that companies that operate

vessels solely outside the U.S. are not

deemed to be OCCs. The NPR suggested

that the proposal was consistent with

legislative intent that a ‘‘vessel

operator’’ be one whose vessels call at

U.S. ports and all other common carriers

should be classified as NVOCCs.

The NPR further stated that if the

definition of OCC included carriers that

operate vessels only in foreign-toforeign trades, it could expand the scope

of antitrust immunity and also remove

certain carriers from NVOCC financial

responsibility requirements in U.S.

trades even though they have no vessels

or assets in the U.S. Lastly, the NPR

concluded, based on principles of

statutory construction, that when

Congress used the term ‘‘vessel’’ in the

definition of OCC, it likely was referring

to those vessels specified in the

definition of ‘‘common carrier,’’ i.e.,

those that operate on the high seas

between the U.S. and a foreign country.

Comments on Proposed Rule

A. OCWG

The OCWG agrees with the

Commission that the distinction

between OCCs and NVOCCs is

significant. It also supports continuation

of the Commission’s past practice that a

common carrier that operates a vessel in

one U.S. trade is an OCC for all U.S.

trades. It contends that this practice is

consistent with the Shipping Act and, as

a practical matter, has worked well in

the past, presenting no problems.

The OCWG submits that the proposed

rule would require members of vessel

sharing agreements (‘‘VSAs’’) to deploy

vessels in the U.S. solely to meet

regulatory requirements, something the

Commission has indicated it wishes to

avoid, citing the NPR at 5. The OCWG

asserts that various types of VSAs have

grown significantly, and offer more

efficient and frequent service at lower

cost. It contends that it is possible, for

a variety of operational factors, that the

parties may decide that all of the vessels

of a member be deployed in non-U.S.

trades and it will only serve the U.S. via

the vessels of its fellow members. The

OCWG concludes that such a carrier

would not be considered an OCC and

would have to withdraw from the U.S.

portion of the agreement or restructure

its service.

The OCWG therefore suggests a

modified definition. It would allegedly

preserve the ability of VSAs to function

efficiently, while at the same time

maintaining a distinction between

carriers that commit assets to a service

in U.S. trades and those that do not.

Next, the OCWG argues that the

proposed definition should not change

the applicable law regarding

transshipment agreements. It contends

that for over 50 years the Commission

has held that a person may be an OCC,

within the meaning of the Shipping Act

and its predecessor legislation, without

having a vessel call directly at a U.S.

port, citing Restrictions on

Transshipment at Canal Zone, 2

U.S.M.C. 675 (1943). It notes further that

in adopting OSRA, Congress did not

change the statutory definition of

‘‘common carrier’’ and contends,

therefore, that there is no statutory basis

for the change in law being proposed by

the Commission.

In addition, the OCWG maintains that

the proposed change would overturn

longstanding Commission precedent

that a carrier providing a portion of a

through vessel service to or from the

U.S. qualifies as an OCC even though its

vessels do not call at a U.S. port, citing

Transshipment & Apportionment

Agreements from Indonesian Ports to

U.S. Atlantic & Gulf Ports, 10 F.M.C.

183 (1964); and Transshipment and

Through Billing Arrangements Between

East Coast Ports of South Thailand and

U.S. Atlantic and Gulf Ports, 10 F.M.C.

201 (1966). These carriers therefore urge

the Commission to clarify in the

supplemental information that a

common carrier offering a through bill

of lading to or from the U.S. that

operates a vessel on which part of the

service is provided meets the definition

of OCC, even if its vessels do not call

directly at a U.S. port. The OCWG

further notes that these carriers would

be subject to tariff publication and other

regulatory requirements of the Shipping

Act and would maintain the distinction

between carriers that commit assets to a

service to or from the U.S. and those

that do not. Lastly, the OCWG argues

that the proposed approach would have

the effect of removing all transshipment

agreements from the scope of the

Commission’s jurisdiction and require

the Commission to repeal 46 C.F.R.

§ 535.306.

B. Maersk

Maersk observes that the

Commission’s proposed definition

would exclude feeder operators

providing foreign-to-foreign

transportation from the definition of

OCC. It suggests that the final rule

should accommodate such activity. In

addition, Maersk believes that a carrier

signatory to a vessel sharing agreement

(‘‘VSA’’) should be considered an OCC

when another carrier participating in

the agreement contributes ships making

U.S. port calls.

C. Samskip

Samskip, a self-defined vesseloperating common carrier, argues that

the proposed rule overturns

Commission precedent that carriers

providing a portion of vessel service to

or from the U.S. qualify as OCCs even

though their vessels do not actually call

at U.S. ports. It suggests, therefore, that

the supplemental information to the

final rule state that a common carrier

which offers a through bill of lading and

operates a vessel on which part of the

service is provided is an OCC, even if

the vessels it operates do not call

directly at a U.S. port. Lastly, Samskip

urges the Commission to adopt a

definition of OCC that provides that a

common carrier that becomes an OCC

by virtue of carriage in a transshipment

situation should be considered an OCC

for purposes of entering into slot

chartering and vessel space sharing

agreements with other OCCs.

D. CENSA

CENSA supports that portion of the

proposed rule that states that a carrier

operating a vessel in one U.S. trade is

an OCC for all U.S. trades. However,

CENSA believes that the requirement

that a carrier must have at least one

vessel calling at a U.S. port may exclude

two categories of carriers—those

involved in VSAs and transshipment

arrangements.

CENSA contends that most OCCs are

parties to one or more forms of VSAs—

space charters, slot charters, and

alliances—many of which are global in

26508 Federal Register / Vol. 65, No. 89 / Monday, May 8, 2000 / Rules and Regulations

scope. CENSA submits that it is possible

that a VOCC member of a VSA will

deploy its vessels in non-U.S. trades,

but will serve the U.S. via the vessels of

the agreement members. CENSA

believes that under the proposed

definition such a carrier would not be

an OCC and would consequently have

to withdraw from the U.S. portion of the

agreement or restructure its service to

have a vessel call at a U.S. port. It

suggests amending the definition to

include a VOCC that contributes vessels

to a VSA.

CENSA further asserts that

longstanding Commission precedent

holds that carriers that provide a portion

of vessel service to or from the U.S.

qualify as OCCs even though their

vessels do not call at U.S. ports. CENSA

suggests that there is no need to

overrule this precedent and that

Congress is presumed to have been

aware of it when it adopted the

definition of ‘‘common carrier’’ in

OSRA.

E. India Carriers

The India Carriers contend that the

proposed rule would classify a carrier

which operates oceangoing vessels as an

NVOCC, if the vessels did not call at

U.S. ports. They believe that this

contradicts the definition of NVOCC in

the Shipping Act—i.e., a common

carrier that does not operate the vessels

by which the ocean transportation is

provided. They further submit that an

OCC that serves the U.S. trades by slotchartering space on another carrier’s

vessels, but issues its own bills of

lading, would be held to be a ‘‘shipper’’

under the proposed definition. This,

they argue, could confuse the traditional

liability relationship between shipper

and carrier under the Carriage of Goods

by Sea Act (‘‘COGSA’’), 46 U.S.C. 1310–

1315.

The India Carriers also argue that the

proposed rule would exclude carriers

that operate vessels as only part of their

U.S. service, thereby overturning

longstanding precedent. In addition,

they contend that the rationalization of

vessel space through various

cooperative agreements allows carriers

to provide service more efficiently and

at a reduced cost. The proposed rule

allegedly might prompt carriers to

redeploy vessels solely to satisfy a

regulatory requirement.

The India Carriers note that vessels

operating under slot charters or other

VSAs are presently subject to the

Commission’s regulatory requirements,

including that they publish tariffs. They

also contend that FMC or court

judgments could be enforced by

requiring carriers who offer through

service but do not call at U.S. ports to

maintain a bond or other guarantee

similar to that required of NVOCCs.

F. NITL

NITL supports the interpretation that

a carrier that operates a vessel in a

single trade is an OCC in all trades. It

maintains that the plain language of the

statute does not require a trade-by-trade

analysis and to do so would lead to

inefficiencies. NITL is concerned,

however, about the exclusion of carriers

that do not offer direct port calls but

instead offer indirect ocean

transportation by way of VSAs or

similar arrangements.

NITL asserts that the proposed

definition is narrower than the statutory

definition, which simply defines an

OCC as a ‘‘vessel-operating common

carrier’’ and does not restrict the trade

lanes in which the vessel can operate.

NITL contends that there is no support

for the Commission’s assertion that the

‘‘vessel’’ in the definition of OCC was

likely the vessels specified in the

definition of ‘‘common carrier.’’ NITL

further states that under that definition

a common carrier does not need to

operate a vessel; it must merely

‘‘utilize’’ a vessel in U.S. trades for part

or all of the transportation. It concludes

that the ‘‘other part’’ of the

transportation can be wholly outside the

U.S., i.e., foreign-to-foreign. It further

contends that the plain language of the

statute, unchanged by the passage of

OSRA, does not restrict the provision of

OCC service to only those carriers that

make direct calls at U.S. ports.

NITL also finds the proposed

definition inconsistent with the policy

objective of OSRA, particularly section

2(4), which requires the FMC to

administer the law in a manner that

promotes competitive and efficient

ocean transportation services and relies

to a greater extent on the marketplace.

It notes that carriers may decide that the

U.S. market is more efficiently and

economically served through a VSA and

claims that the Commission’s narrow

definition of OCC would prevent some

VOCCs from offering such services to

shippers through service contracts.

Ultimately, NITL believes the FMC

should maintain the existing statutory

definition of OCC in its regulations and

should broadly construe it. It contends

that there is nothing in the Shipping Act

or OSRA that indicates that Congress

intended a more narrow definition.

G. AIFA/TIA

AIFA/TIA supports the proposed

definition as providing necessary, clear,

and precise guidance to the ocean

transportation industry. It notes that the

definition of ‘‘common carrier’’ in

section 3(6) of the Shipping Act refers

to a person who provides transportation

by water and utilizes a vessel for all or

part of that transportation, and that an

OCC is defined simply as ‘‘a vesseloperating common carrier.’’ AIFA/TIA

submits that the Commission should put

these two definitions together and issue

a statement that an entity that otherwise

meets the definition of common carrier

and operates a single vessel on a single

route between a single U.S. port and a

single foreign port, over either the high

seas or the Great Lakes, must be treated

as an OCC for all of its operations in

U.S. trades. This interpretation would

allegedly extend the status of OCC to the

largest possible universe of operators.

AIFA/TIA also does not object to

proposals that carriers involved in

nonexclusive transportation agreements

also should be accorded OCC status

even if they have no operations directly

between a U.S. and foreign port.

H. OWL

OWL, one of the largest NVOCCs in

the world, proposes a significant change

in the traditional carrier/shipper

relationship between VOCC and

NVOCC. Instead of obtaining space from

a vessel owner by a service contract,

OWL presents a scenario in which an

NVOCC would obtain space via a slot

charter with a VOCC. Under such

circumstances, OWL argues that the

NVOCC would no longer be a shipper,

vis-a-vis the VOCC, and would instead

be a co-venturer, who should likewise

be permitted to hold itself out to the

public as an OCC in the trade lanes.

OWL thus suggests a bifurcated

approach to the definition of OCC: (1)

The Commission’s multi-trade approach

for vessel operators in one or more trade

lanes; and (2) a trade-by-trade approach

for NVOCCs slot chartering with

VOCCs.

OWL’s proposal is premised on the

assumption that a slot charter between

a VOCC and an NVOCC provides the

NVOCC with sufficient operational

interest or nexus in the voyages to

warrant classification as an OCC in that

trade. If the Commission decides

otherwise, then OWL asserts that the

Commission should not allow a VOCC

in one trade to become a VOCC in

another by virtue of a slot charter. At the

very least, OWL submits that the FMC

should set out guidelines similar to

those recently adopted by the U.S.

Customs Service (‘‘Customs’’) which

require a slot or time-chartering

common carrier to have significant

responsibility or involvement in the

actual operation of the vessels before

being considered a VOCC.

Federal Register / Vol. 65, No. 89 / Monday, May 8, 2000 / Rules and Regulations 26509

OWL concedes that slot charters

would be inherently risky for NVOCCs,

but it is willing to face those risks in

order to be able to offer service

guarantees (i.e., service contracts) to its

underlying shipper clients. It contends

further that the enhanced competition of

new entrants would outweigh any

possible adverse impact of possibly

broadening the scope of antitrust

immunity. OWL also believes that the

Commission’s concerns about its and

shippers’ ability to arrest or attach a

vessel are unfounded. It suggests that

the best way to protect shippers is by

requiring adequate insurance or a surety

bond, such as it already possesses.

OWL contends that there is no statute,

code or policy that would prohibit it

from obtaining space on vessels by

means of space charters, and the fact

that such space charters are not within

the scope of the Shipping Act does not

mean they are prohibited. In this regard,

OWL references a decision of the

European Commission (‘‘EC’’) relating to

the Trans-Atlantic Conference

Agreement (‘‘TACA’’). Commission

Decision of 16 September 1998 Relating

to a Proceeding Pursuant to Articles 85

and 86 of the EC Treaty. (Case No. I/

35.134) (‘‘EC Decision’’). That decision

discussed two types of NVOCCs—(1)

those that operate vessels in another

trade, and (2) those that do not operate

vessels anywhere. The EC stated that

neither type competes with VOCCs in

terms of quality of service, but the first

is able to compete on price. OWL

further asserts that the EC Decision

recognizes three types of common

carriers: (1) A VOCC in the trade; (2)

VOCCs in another trade; and (3)

NVOCCs. It submits that the critical

distinction is not that the second owns

vessel in another trade, but that it has

the ability to compete with VOCCs on

price through its space charter

arrangements. OWL seeks this ability to

compete on price by means of space

charters and be deemed an OCC.

OWL further contends that the term

‘‘vessel operator’’ is growing

increasingly ambiguous in light of

vessel sharing and consortia agreements.

It submits that the Commission has not

faced the difficult question of what

degree of involvement is required to be

considered a vessel operator and has

instead taken a rudimentary approach of

defining a VOCC as a common carrier

that operates a vessel somewhere in the

U.S.

OWL notes that Customs has

struggled with the definition of VOCC

for the past 25 years in the context of

the Sixth Proviso to the Jones Act, 46

U.S.C. app. 883, that exempts coastwise

movements of empty containers owned

or leased by the ‘‘owner or operator’’ of

a vessel transporting those containers

for its own use in the foreign commerce

of the U.S. In this regard, Customs has

issued several rulings dealing with

carriers involved in slot charter

agreements. In 1977, Customs

purportedly issued a ruling holding that

a time charterer was not a vessel

operator and, in 1983, expanded this

position to slot charterers. In that case,

Customs allegedly looked at one trade

lane without reference to status in other

lanes. In 1999, Customs reviewed a joint

service agreement between Italian Line

and d’Amico Line. It determined that

both were VOCCs because they shared

operational control under the

agreement.

The Final Rule

General Discussion

For the reasons set forth below, and

in full consideration of all of the

comments, the Commission has decided

to adopt the proposed rule as the final

rule. As a result, the term ‘‘ocean

common carrier’’ will include only

those common carriers who actually

operate a vessel in at least one United

States trade. In addition, if a common

carrier is an ocean common carrier in

one U.S. trade, it can act as an ocean

common carrier in all U.S. trades.

This decision is fully supported by a

straightforward reading of the relevant

definitions contained in the Shipping

Act. Section 3(16) of the Shipping Act

defines an ‘‘ocean common carrier’’ as

‘‘a vessel-operating common carrier.’’

And, section 3(6) of the Shipping Act

defines a ‘‘common carrier’’, in part, as:

* * * a person holding itself out to the

general public to provide transportation by

water of passengers or cargo between the

United States and a foreign country for

compensation that—

(A) assumes responsibility for the

transportation from the port or point of

receipt to the port or point of destination,

and

(B) utilizes, for all or part of that

transportation, a vessel operating on the high

seas or the Great Lakes between a port in the

United States and a port in a foreign country.

***

When these two definitions are read

together, it is logical to conclude that

the vessels operated by an ocean

common carrier are those referenced in

the common carrier definition, i.e.,

those ‘‘operating on the high seas or the

Great Lakes between a port in the

United States and a port in a foreign

country.’’

The Commission recognizes that the

definition of common carrier refers to

one who ‘‘utilizes, for all or part of that

transportation’’ a vessel operating

between the U.S. and a foreign country.

Congress employed the word ‘‘utilize’’

so that the definition of common carrier

could encompass both ocean common

carriers and NVOCCs; the very

definition of ocean common carrier as

‘‘vessel-operating common carrier’’

indicates that Congress intended ocean

common carriers actually to operate, not

merely utilize, vessels. The reference to

‘‘all or a part of the transportation’’

simply reflects the fact that a common

carrier can offer port-to-port

transportation or point-to-point through

transportation, using inland carriers for

the latter.

The final rule is also consistent with

Congress’ intent to delineate between

ocean common carriers and NVOCCs. In

adopting the Shipping Act, Congress

clearly wanted to distinguish between

those common carriers that operate

vessels and those that do not. The

former are ocean common carriers and

the latter are NVOCCs. As the House

Committee on Merchant Marine and

Fisheries noted with respect to H.R.

1878:

The Shipping Act does not contain a

definition of ‘‘non-vessel-operating common

carrier.’’ One is added to this bill so that the

distinction may be made between those

carriers that operate vessels and those that do

not. Both types are included in the term

‘‘common carrier.’’

The term ‘‘ocean common carrier’’ is based

on the definition of ‘‘common carrier by

water in foreign commerce’’ in section 1 of

the Shipping Act with the added provision

that the carrier must operate the vessel

providing the transportation by water.

H.R. Rep. No. 53, 98th Cong., 1st Sess.

29 (1983) (‘‘House Report’’). See also, S.

Rep. No. 3, 98th Cong., 1st Sess. 20

(1983) (‘‘Senate Report’’). In addition,

Congress wanted to ensure that carriers

operating solely through ports of

contiguous nations not be included in

the definition of ‘‘common carrier.’’ See,

House Report at 29; Senate Report at 19.

Congress’ concern not to establish the

Commission’s jurisdiction over carriers

operating through ports in countries

contiguous to the United States reflects

its overall determination not to expand

the Commission’s jurisdiction, and with

it, the conferring of antitrust immunity,

to carriers operating solely between

foreign ports.

As noted in the preamble to the NPR,

Congress viewed vessel operators as

those whose vessels call at U.S. ports

and classified all other common carriers

in U.S. commerce as non-vesseloperating common carriers. For

example, in its report on the Shipping

Act, the Senate Commerce, Science, and

Transportation Committee observed:

26510 Federal Register / Vol. 65, No. 89 / Monday, May 8, 2000 / Rules and Regulations

1 In Transpacific Westbound Rate Agreement v.

Federal Maritime Comm’n, 951 F.2d 950 (9th Cir.

1991), the court upheld the Commission’s decision

that it did not have jurisdiction over foreign-toforeign portions of agreements that also had U.S.-

to-foreign portions. As a result, foreign-to-foreign

portions of agreements are generally not filed with

the Commission, even for informational purposes.

The Committee strongly believes that it is

in our national interest to permit cooperation

among carriers serving our foreign trades to

permit efficient and reliable service. * * *

Our carriers need; a stable, predictable, and

profitable trade with a rate of return that

warrants reinvestment and a commitment to

serve the trade; greater security in

investment. * * *

Senate Report at 9. We continue to

believe that Congress intended to

provide antitrust immunity and other

special privileges and protections only

to those carriers that have made the

financial commitment to provide vessel

service in United States trades.

The importance of the distinction

between OCC and NVOCC was noted in

the preamble to the proposed rule: an

OCC can be a party to agreements filed

with the Commission and receive

antitrust immunity therefor, and can

enter into service contracts with

shippers. An NVOCC can do neither.

Moreover, NVOCCs are subject to a

financial responsibility requirement,

with foreign NVOCCs subject to higher

amounts under the scale promulgated

by Commission regulation. Thus, there

is ample incentive for NVOCCs to

characterize themselves as OCCs, and

this could inure to the detriment of their

shipper customers who would

otherwise have been protected by an

NVOCC’s financial responsibility.

The Commission continues to be

concerned about the effect of the

definition of ocean common carrier on

the scope of antitrust immunity

envisioned by Congress under the

Shipping Act. If the definition of OCC

somehow included carriers that

operated vessels only in foreign-toforeign trades, this could substantially

expand the scope of antitrust immunity

beyond that contemplated by Congress.

In this regard, we note the longstanding

judicial policy of narrowly construing

antitrust exemptions. See, Federal

Maritime Commission v. Seatrain Lines,

Inc., 411 U.S. 726, 733 (1973).

Vessel Sharing Arrangements

Several of the commenters (Maersk,

CENSA, OCWG, India Carriers and

NITL) suggest that the definition of OCC

should be extended to include shipping

lines who are parties to VSAs serving

U.S. ports but who themselves do not

call at U.S. ports. While the term VSA

is undefined by the commenters, they

suggest it is virtually any cooperative

arrangement among OCCs. These

commenters note that VSAs have grown

over the years and are likely to continue

to grow. These arrangements often

permit carriers to offer more efficient

and frequent service to the shipping

public and at a lower cost. The OCWG

further contends that a variety of

operational and other factors will

dictate how a member of a VSA will

deploy its vessels in non-U.S. trades and

that such a carrier may choose to serve

U.S. trades solely with vessel space

obtained on its partners’ ships.

Some commenters suggest that the

proposed definition could discourage

the formation of VSAs or prevent the

parties from maximizing the benefits of

such cooperation by redeploying vessels

out of U.S. trades. Maersk, CENSA and

the OCWG thus propose an exception to

the proposed definition for a vessel

operating common carrier that

contributes vessels to a VSA that serves

the U.S. NITL likewise believes that

VSAs should be encouraged, but

suggests that this could be

accomplished simply by maintaining

the existing statutory definition and by

broadly construing it. Lastly, OWL

argues that if the Commission does not

adopt its proposal concerning NVOCC

space chartering, then parties to VSAs

should be considered OCCs only if they

have significant responsibility or

involvement in the actual day-to-day

operations of the vessels.

While the intended benefit of the

exception urged by some of the

commenters is to facilitate formation

and operation of efficient VSAs, there

are several problems with this approach.

First, it appears to address a mostly

theoretical concern. Commenters do not

identify, nor is the Commission aware

of, any instances where entities are

planning to operate major VSAs with

parties who are not in the U.S. trades,

or where current, vessel-operating

members of VSAs are contemplating

withdrawing vessel service from U.S.

trades and proposing to serve the U.S.

only through space-sharing

arrangements with fellow VSA

members. In addition, this type of

arrangement would expand the reach of

antitrust immunity well beyond that

envisioned by Congress when it recently

passed OSRA. Since 1984, the only

carriers that could enter into agreements

subject to the Act and receive antitrust

immunity were ‘‘ocean common

carriers.’’ The inclusion of VSA

participants in the OCC definition

would effectively confer antitrust

immunity to carriers who do not make

a commitment to serve the U.S. trades

by operating their own vessels.

In addition to these very serious

policy-based concerns, the carriers’

proposal raises other technical or legal

problems, and may generate further

confusion or ambiguity. Since the term

VSA is undefined, but seems to include

an almost unlimited range of carrier

relationships, the proposed exemption

would appear to encompass a broad and

indefinite class of foreign companies.

Also, it refers to a vessel sharing

agreement that ‘‘operates’’ vessels.

However, VSAs do not collectively

operate vessels—their individual carrier

members do so. Moreover, if the

members are subject to an arrangement

that covers more than the U.S. trades,

those non-U.S. portions of the

arrangement would not be in the VSA

and filed with the Commission.1 The

Commission could be left unable to

determine the full extent of any such

arrangement or ascertain whether the

carrier involved is a vessel operator in

some non-U.S. trade, and not an NVOCC

or some other entity unlawfully seeking

VOCC status. Lastly, this proposal

provides no protection to the shipping

public who might use the services of

such a carrier in its U.S. service. The

carrier would have no attachable assets

in the U.S. and might not have an agent

for service of process in the U.S. to

receive the claims of injured parties.

This too would appear to contravene

OSRA’s general objective of providing

more, not fewer, protections to U.S.

interests utilizing foreign entities, as

reflected in the strengthened ocean

transportation intermediary (‘‘OTI’’) and

controlled carrier provisions, for

example.

For the reasons stated above, the

Commission is not adopting the carrier

proposal concerning VSAs. This does

not mean that a VSA member without

ships calling at a U.S. port would be

precluded from offering a common

carriage service to the U.S. However, it

would simply have to offer its service as

an NVOCC. It could then enter into

service contracts with OCCs, but could

not offer its own service contracts or fix

rates with other vessel operators in a

trade.

The Commission is fully cognizant of

the new policy objective added to the

Shipping Act by OSRA—i.e., promoting

the growth and development of United

States exports through competitive and

efficient ocean transportation and by

placing a greater reliance on the

marketplace. The Commission further

believes that there may be arrangements

between common carriers that offer

more efficient and rationalized services,

while at the same time providing

shippers with more service options and

lower costs for their ocean

Federal Register / Vol. 65, No. 89 / Monday, May 8, 2000 / Rules and Regulations 26511

2Nonexclusive transshipment agreements do not

prohibit either carrier from entering into similar

agreements with other carriers.

3 In Docket No. 98–31, Publication of Inactive or

Inaccurate Ocean Common Carrier Tariffs, order

served May 19, 1999, the Commission found that

13 NVOCCs operating in the Far East trades held

themselves out to be VOCCs.

transportation, and that some of these

arrangements may be precluded by the

final rule as a result of specific statutory

constraints limiting the Commission’s

flexibility in interpreting the Shipping

Act. We appreciate commenters’

arguments regarding efficient

operations. We fully support and wish

to encourage arrangements and

operations that enhance efficiency and

competition. However, we do not think

it appropriate to adopt an overly broad

exception to address what, to date, is

only a hypothetical problem. We would

remind the carriers that the Commission

would, as always, give serious

consideration to any petition for

rulemaking, reconsideration of this rule,

or an exemption.

Transshipment Arrangements

Transshipment agreements are

arrangements between ocean common

carriers by which one carrier serving a

port of origin and the other carrier

serving a port of destination provide

transportation between such ports via

an intermediate port at which the cargo

is transferred from one carrier to the

other. See 46 CFR 535.306(a).

Nonexclusive transshipment agreements

are exempt from the filing requirements

of the Shipping Act, 46 CFR

535.306(b),2 but exclusive

transshipment agreements must still be

filed with the Commission.

Several commenters have raised

concerns about the effect of the

proposed rule on the status of vessel

operator parties to transshipment

agreements who do not directly serve

the United States. They contend that the

rule would overturn longstanding

Commission precedent that such

carriers are considered to be OCCs. As

a result, Maersk has proposed an

additional exception to include feeder

operators in the rule, while Samskip

and the OCWG suggest that the

Commission can address the issue in the

supplemental information to the final

rule without further amending the

actual definition.

Beginning in 1943, in the Canal Zone

case, the Commission’s predecessor

found that ocean carriers moving cargo

from Colombia or Ecuador to the Canal

Zone and then transferring that cargo to

carriers moving it to the U.S., under

through bills of lading, were ‘‘engaged

in the transportation by water of

property between the United States and

a foreign country’’ and consequently

were ‘‘common carriers by water’’

subject to the Shipping Act, 1916. This

position was reaffirmed and further

explicated by the Commission in 1966,

in the two Transshipment Cases. In the

first case, the Commission found

carriers moving cargo from Indonesian

outports to the U.S. under a through bill

of lading who transshipped the cargo at

a base port to be common carriers by

water, and stated:

Where there exists a unitary contract of

affreightment such as a through bill of lading

by which two or more carriers or conferences

of carriers hold themselves out to transport

cargo from a specified foreign port to a point

in the United States with transshipment at

one or more intermediate points from one

carrier to another, each of the carriers so

involved is ‘‘engaged in’’ transporting cargo

by water from a foreign country to the United

States.

10 F.M.C. at 191. The Commission

reached a similar conclusion in the

second Transshipment case, 10 F.M.C.

201 (1966), where carriers moving cargo

from Thailand to Singapore were also

held to be subject to the 1916 Act.

The Commission does not believe that

these cases are controlling today. The

Transshipment cases were decided

under the 1916 Act, which defined

‘‘common carrier by water in foreign

commerce’’ to mean ‘‘a common carrier

engaged in the transportation by water

of passengers or property between the

United States * * * and a foreign

country.’’ When Congress enacted the

Shipping Act it chose different language

to define ‘‘common carrier’’ in section

3(6), 46 U.S.C. app. 1702(6), and

separately defined ‘‘ocean common

carrier’’ and ‘‘non-vessel-operating

common carrier.’’ In light of the fact that

the Commission decided the

Transshipment cases prior to the

statutory distinction being drawn

between NVOCCs and OCCs, the

Commission finds that the

Transshipment cases are noncontrolling as to these issues and

declines to adopt the commenters’

recommendations with regard thereto.

As noted in the House Report, the

difference between a ‘‘common carrier

by water’’ and an ‘‘ocean common

carrier’’ is that the latter has ‘‘the added

provision that the carrier must operate

the vessel,’’ a significant distinction.

Thus, the Transshipment cases are

probably controlling as to whether

someone is a ‘‘common carrier,’’ but

irrelevant to ‘‘ocean common carrier’’

status.

Avoidance of OTI Responsibilities

The NPR raised concerns about

permitting vessel operators in foreignto-foreign trades to be considered OCCs

in U.S. trades by virtue of VSA or

transshipment arrangements. In

particular, it noted that this could

remove certain companies from the

scope of the NVOCC bonding

requirement even though they have no

vessels or assets in the U.S. that can be

attached to satisfy a Commission or U.S.

court judgment. NPR at 6. As noted

earlier, there is a very strong incentive

under the Shipping Act, as modified by

OSRA, for NVOCCs to want to be

considered OCCs. They can then offer

confidential service contracts to their

shipper customers and avoid the costs

of maintaining a bond as required by the

Act and the Commission’s regulations.

Some NVOCCs are likely to engage in

complex machinations to be considered

OCCs under some of the proposals

suggested by certain commenters. This

is not some idle threat or hypothetical

fear—even before passage of OSRA

many NVOCCs were simply holding

themselves out as OCCs.3 Now, postOSRA, a review of the carriers holding

themselves out as VOCCs on the

Commission’s web page reveals that

many of these carriers may well be

NVOCCs, a matter for probable

enforcement action. In addition, it

appears that some carriers that may

have at one time served U.S. ports with

their own vessels are continuing to hold

themselves out as OCCs even though

they have withdrawn these vessels from

service.

Multi-trade Approach

Almost all of the commenters support

the Commission’s multi-trade approach

to determining OCC status—if a carrier

is an OCC in one U.S. trade, it will be

considered an OCC for all U.S. trades.

NITL suggests that this approach is

supported by the plain language of the

statute. The OCWG notes that this is

simply a continuation of past

Commission practice and avoids having

to make status determinations on a

trade-by-trade basis. It further argues

that making such determinations on a

trade-by-trade basis would be

impractical and inefficient. As reflected

by the endorsement of the commenters,

the Commission’s position in this regard

is a sound one, and the Commission

will continue the multi-trade approach

to determining OCC status in the final

rule.

OWL’s Proposal

OWL’s proposal to consider NVOCCs

who space charter from VOCCs to be

considered OCCs on a trade-by-trade

basis is most problematic. At the very

26512 Federal Register / Vol. 65, No. 89 / Monday, May 8, 2000 / Rules and Regulations

least, such a proposal is outside the

scope of the proposed rule and would

require additional notice and comment

were the Commission inclined to pursue

such an approach. But, more

importantly, OWL’s proposal does not

appear to be a proper matter for a

rulemaking proceeding. OWL is not

asking that the Commission explicate

some statutory or regulatory provision.

Instead, it is asking the Commission to

rewrite the Shipping Act to give certain

NVOCCs the ability to offer service

contracts to their shipper customers.

Regardless of whether this is sound

policy, Congress recently and very

consciously chose not to permit such

activity when it enacted OSRA. The

Commission will not now do what

Congress declined to do.

Effective Date

It appears that there may be some

vessel operators currently holding

themselves out as ocean common

carriers even though they do not operate

vessels that directly serve U.S. ports.

The Commission understands that these

carriers may have been confused about

the legitimacy of such services, in light

of the Commission’s pre-1984 policies

implementing the 1916 Shipping Act.

Regardless of the validity of this

position, the Commission appreciates

the situation these carriers are in and

desires to give them sufficient time to

restructure their services in accordance

with the final rule. As a result, the final

rule will not become effective for 90

days. And, of course, the rule will not

be enforced retroactively as to such

carriers.

It is also possible that some of these

carriers operating as OCCs may have

entered into service contracts with

shippers that may still be effective. At

the very least, our decision here should

operate as the type of force majeure

situation that would warrant the

termination of such contracts without

any penalty to the shipper. If the parties

to such contracts wish to continue

operating under them, the Commission

believes that this would not be possible

since the carrier would no longer be

considered an ocean common carrier,

but rather would be an NVOCC.

However, a similar arrangement might

possibly be reflected in the common

carrier’s tariff rates or perhaps as a time/

volume rate.

Amendment to Part 515

In the final rule of Docket No. 98–28,

Licensing, Financial Responsibility

Requirements, and General Duties for

Ocean Transportation Intermediaries,

adding section 515 to part 46 CFR, the

Commission stated in the

supplementary information section that

payment against financial responsibility

should only be made on ‘‘final’’

judgments; however, it mistakenly

failed to add the word ‘‘final’’ in the

actual language of § 515.23(b)(2). In

response to petitions for reconsideration

of the final rule in 46 CFR 515, the

Commission ordered the correction of

this oversight to be made in the instant

rulemaking proceeding in order to

preserve resources. Therefore, in

accordance with the Commission’s

decision in Docket No. 98–28, we are

amending 46 CFR 515.23(b)(2) to add

the word ‘‘final.’’

In accordance with the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq., the

Chairman of the Federal Maritime

Commission has certified to the Chief

Counsel for Advocacy, Small Business

Administration, that the rule will not

have a significant impact on a

substantial number of small entities. In

its Notice of Proposed Rulemaking, the

Commission stated its intention to

certify this rulemaking because the

proposed changes affect only ocean

common carriers and passenger vessel

operators, entities the Commission has

determined do not come under the

programs and policies mandated by the

Small Business Regulatory Enforcement

Fairness Act. As no commenter refuted

this determination, the certification

remains unchanged.

List of Subjects

46 CFR Part 515

Exports; Freight forwarders; Nonvessel-operating common carriers;

Ocean transportation intermediaries;

Licensing requirements; Financial

responsibility requirements; Reporting

and recordkeeping requirements.

46 CFR Part 520

Common carrier; Freight; Intermodal

transportation; Maritime carriers;

Reporting and recordkeeping

requirements.

46 CFR Part 530

Freight; Maritime carriers; Reporting

and recordkeeping requirements.

46 CFR Part 535

Administrative practice and

procedure; Maritime carriers; Reporting

and recordkeeping requirements.

Therefore, for the reasons set forth

above, Parts 515, 520, 530, and 535 of

Subchapter C of Title 46 Code of Federal

Regulations, are amended as follows:

PART 515—LICENSING, FINANCIAL

RESPONSIBILITY REQUIREMENTS,

AND GENERAL DUTIES FOR OCEAN

TRANSPORTATION INTERMEDIARIES

1. The authority citation continues to

read as follows:

Authority: 5 U.S.C. 553; 31 U.S.C. 9701; 46

U.S.C. app. 1702, 1707, 1709, 1710, 1712,

1714, 1716, and 1718; Pub. L. 105–383, 112

Stat. 3411; 21 U.S.C. 862.

2. In § 515.2 revise paragraph (m) to

read as follows:

§ 515.2 Definitions

* * * * *

(m) Ocean common carrier means a

common carrier that operates, for all or

part of its common carrier service, a

vessel on the high seas or the Great

Lakes between a port in the United

States and a port in a foreign country,

except that the term does not include a

common carrier engaged in ocean

transportation by ferry boat, ocean

tramp, or chemical parcel-tanker.

* * * * *

3. Revise § 515.23(b)(2) to read as

follows:

§ 515.23 Claims against an ocean

transportation intermediary.

* * * * *

(b) * * *

(2) If the parties fail to reach an

agreement in accordance with paragraph

(b)(1) of this section within ninety (90)

days of the date of the initial

notification of the claim, the bond,

insurance, or other surety shall be

available to pay any final judgment for

damages obtained from an appropriate

court. The financial responsibility

provider shall pay such judgment for

damages only to the extent they arise

from the transportation-related activities

of the ocean transportation intermediary

ordinarily within 30 days, without

requiring further evidence related to the

validity of the claim; it may, however,

inquire into the extent to which the

judgment for damages arises from the

ocean transportation intermediary’s

transportation-related activities.

* * * * *

PART 520—CARRIER AUTOMATED

TARIFF SYSTEMS

1. The authority citation for part 520

continues to read as follows:

Authority: 5 U.S.C. 553; 46 U.S.C. app.

1701–1702, 1707–1709, 1712, 1716; and sec.

424 of Pub. L. 105–383, 112 Stat. 3411.

2. In § 520.2 revise the definition of

ocean common carrier to read as

follows:

Federal Register / Vol. 65, No. 89 / Monday, May 8, 2000 / Rules and Regulations 26513

§ 520.2 Definitions

* * * * *

Ocean common carrier means a

common carrier that operates, for all or

part of its common carrier service, a

vessel on the high seas or the Great

Lakes between a port in the United

States and a port in a foreign country,

except that the term does not include a

common carrier engaged in ocean

transportation by ferry boat, ocean

tramp, or chemical parcel-tanker.

* * * * *

PART 530—SERVICE CONTRACTS

1. The authority citation for part 530

continues to read as follows:

Authority: 5 U.S.C. 553; 46 U.S.C. app.

1704, 1705, 1707, 1716.

2. In § 530.3 revise paragraph (n) to

read as follows:

§ 530.3 Definitions.

* * * * *

(n) Ocean common carrier means a

common carrier that operates, for all or

part of its common carrier service, a

vessel on the high seas or the Great

Lakes between a port in the United

States and a port in a foreign country,

except that the term does not include a

common carrier engaged in ocean

transportation by ferry boat, ocean

tramp, or chemical parcel-tanker.

* * * * *

PART 535—AGREEMENTS BY OCEAN

COMMON CARRIERS AND OTHERS

SUBJECT TO THE SHIPPING ACT OF

1984

1. The authority citation for part 535

is amended to read as follows:

Authority: 5 U.S.C. 553; 46 U.S.C. app.

1701–1707; 1709–1710, 1712 and 1714–1718;

Pub. L. 105–383, 112 Stat. 3411.

2. Revise § 535.101 to read as follows:

§ 535.101 Authority.

The rules in this part are issued

pursuant to the authority of section 4 of

the Administrative Procedure Act (5

U.S.C. 553), sections 2, 3, 4, 5, 6, 7, 8,

10, 11, 13, 15, 16, 17 and 19 of the

Shipping Act of 1984 (‘‘the Act’’), and

the Ocean Shipping Reform Act of 1998,

Pub. L. 105–258, 112 Stat. 1902.

3. In § 535.104 revise paragraph (u) to

read as follows:

§ 535.104 Definitions.

* * * * *

(u) Ocean common carrier means a

common carrier that operates, for all or

part of its common carrier service, a

vessel on the high seas or the Great

Lakes between a port in the United

States and a port in a foreign country,

except that the term does not include a

common carrier engaged in ocean

transportation by ferry boat, ocean

tramp, or chemical parcel-tanker.

* * * * *

By the Commission.

Bryant L. VanBrakle,

Secretary.

[FR Doc. 00–11338 Filed 5–5–00; 8:45 am]

BILLING CODE 6730–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 54

[CC Docket No. 96–45; FCC 00–126]

Federal-State Joint Board on Universal

Service

AGENCY: Federal Communications

Commission.

ACTION: Final rule; petition for

reconsideration.

SUMMARY: This document concerning

the Federal-State Joint Board on

Universal Service clarifies the method

by which quarterly line count data will

be incorporated in the new high-cost

mechanism for purposes of calculating

and targeting support amounts. It also

clarifies that, until the Commission

adopts new line count input values,

forward-looking costs for universal

service support purposes shall be

estimated using the line count input

values adopted in the Tenth Report and

Order. Finally, it clarifies that high-cost

support shall be available on a regular

quarterly basis for competitive eligible

telecommunications carriers serving

lines in areas served by non-rural

incumbent local exchange carriers.

DATES: Effective May 8, 2000.

FOR FURTHER INFORMATION CONTACT:

Katie King, Attorney, Common Carrier

Bureau, Accounting Policy Division,

(202) 418–7400.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s

Twentieth Order Reconsideration, CC

Docket No. 96–45; FCC 00–126, released

on April 7, 2000. The full text of this

document is available for public

inspection during regular business

hours in the FCC Reference Center,

Room CY–A257, 445 Twelfth Street,

S.W., Washington, D.C., 20554.

I. Introduction

1. In this Order, we clarify certain

aspects of the new high-cost universal

service support mechanism for nonrural carriers adopted in the Ninth

Report and Order, 64 FR 67416

(December 1, 1999), on October 21,

1999. Specifically, we clarify the

method by which quarterly line count

data will be incorporated in the new

high-cost mechanism for purposes of

calculating and targeting support

amounts.

We also clarify that, until the

Commission adopts new line count

input values, forward-looking costs for

universal service support purposes shall

be estimated using the line count input

values adopted in the Tenth Report and

Order, 64 FR 67372 (December 1, 1999).

This clarification does not alter the

methodology adopted in the Ninth

Report and Order except to account for

line growth when the wire center line

count data reported quarterly by the

carriers differs from the input values

used to estimate forward-looking cost.

Finally, we clarify that high-cost

support shall be available on a regular

quarterly basis for competitive eligible

telecommunications carriers serving

lines in areas served by non-rural

incumbent local exchange carriers.

II. Discussion

2. In general, there are four stages in

the forward-looking high-cost

mechanism for non-rural carriers where

line count information is required: (1)

To estimate forward-looking costs of

providing supported services; (2) to

determine statewide support amounts;

(3) to target those statewide support

amounts to individual wire centers; and

(4) to determine the per-line support

amounts in individual wire centers.

In addition, the interim hold-harmless

provision uses line counts to target

carrier-by-carrier hold-harmless support

amounts to individual wire centers. The

interim hold-harmless provision also

uses line counts to determine the perline support amounts in individual wire

centers. As discussed, we provide

specific guidance on how these line

counts are used in the four stages of the

forward-looking mechanism and the

interim hold-harmless provision.

3. Estimating Forward-Looking Costs.

We clarify that the line counts used in

the model to estimate forward-looking

economic costs shall be used to

calculate average forward-looking costs

in all the cost calculations in the

methodology adopted in the Ninth

Report and Order for determining

support. This approach is consistent

with the Commission’s and the FederalState Joint Board’s decision to use a cost

model. The model estimates the

forward-looking costs of providing the

supported services in each wire center

served by non-rural carriers. We clarify

that model lines shall be used in