Federal Register / Vol. 63, No. 13 / Wednesday, January 21, 1998 / Notices 3115

1The Agreement members are Hyundai Merchant

Marine, Ltd. (‘‘Hyundai’’ or ‘‘HMM’’), American

President Lines, Ltd. (‘‘APL’’), Mitsui O.S.K. Line,

Ltd. (‘‘MOL’’), and Orient Overseas Container Line,

Inc. (‘‘OOCL’’).

2The members of the agreement are Hyundai,

APL and MOL. Although the New Agreement is

intended to replace the Four Party Agreement, the

latter will remain in effect until canceled by the

parties according to its terms, to permit an orderly

transition in the parties’ operations.

FDIC, 550 17th Street, N.W., Room H–

11048, Washington, D.C. 20429.

Telephone: (202) 736–0168.

SUPPLEMENTARY INFORMATION:

Financial Institution in Receivership

Determined to Have Insufficient Assets

to Satisfy All Claims

Whitney Bank & Trust—4342 Hamden,

Connecticut

Dated: January 14, 1998.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

[FR Doc. 98–1345 Filed 1–20–98; 8:45 am]

BILLING CODE 6714–01–P

FEDERAL HOUSING FINANCE BOARD

[No. 98–N–2]

Submission for OMB Review;

Comment Request

AGENCY: Federal Housing Finance

Board.

ACTION: Notice.

SUMMARY: In accordance with the

requirements of the Paperwork

Reduction Act of 1995, the Federal

Housing Finance Board (Finance Board)

hereby gives notice that it has submitted

the information collection entitled

‘‘Personal Certification and Disclosure

Forms’’ to the Office of Management

and Budget (OMB) for review and

approval of a three-year extension of the

OMB control number, which is due to

expire on January 31, 1998.

DATES: Interested persons may submit

comments on or before February 20,

1998.

ADDRESSES: Submit comments to the

Office of Information and Regulatory

Affairs of OMB, Attention: Desk Officer

for the Federal Housing Finance Board,

Washington, D.C. 20503. Address

requests for copies of the information

collection and supporting

documentation to Elaine L. Baker,

Secretary to the Board, 202/408–2837,

Federal Housing Finance Board, 1777 F

Street, N.W., Washington, D.C. 20006.

FOR FURTHER INFORMATION CONTACT:

Patricia L. Sweeney, Program Analyst,

Compliance Assistance Division, Office

of Policy, 202/408–2872, or Janice A.

Kaye, Attorney-Advisor, Office of

General Counsel, 202/408–2505, Federal

Housing Finance Board, 1777 F Street,

N.W., Washington, D.C. 20006.

SUPPLEMENTARY INFORMATION:

A. Need For and Use of Information

Collection

Section 7 of the Federal Home Loan

Bank Act (Bank Act) and part 932 of the

Finance Board’s regulations establish

eligibility and reporting requirements

and the procedures for electing and

appointing Federal Home Loan Bank

(FHLBank) directors. See 12 U.S.C.

1427; 12 CFR part 932. The information

collection contained in the elective and

appointive FHLBank director personal

certification and disclosure forms and

§§ 932.18 and 932.21 of the Finance

Board’s regulations, is necessary to

enable the Finance Board to determine

whether prospective and incumbent

elective and appointive FHLBank

directors satisfy the statutory and

regulatory eligibility and reporting

requirements. See Finance Board forms

E–1, E–2, A–1, and A–2; 12 CFR 932.18

(appointive directors), 932.21 (elective

directors). Accordingly, Finance Board

staff uses the information collection to

determine whether respondents meet

the statutory and regulatory eligibility

requirements. The information

collection requires each respondent to

complete and submit to the Finance

Board for review a personal certification

and disclosure form prior to election or

appointment and, once elected or

appointed, annually during the term of

service. Incumbent directors also have a

continuing obligation promptly to notify

the Finance Board of any known or

suspected ineligibility. See 12 CFR

932.18(f)(2); 932.21(g)(2).

The OMB number for the information

collection is 3069–0002. The OMB

clearance for the information collection

expires on January 31, 1998.

B. Burden Estimate

The Finance Board estimates the total

annual average number of respondents

at 286, with one response per

respondent. The estimate for the average

hours per response is 1.3 hours. The

estimate for the total annual hour

burden is 376 hours (286 respondents ×

1 response/respondent × approximately

1.3 hours). The estimated annualized

cost to respondents of the information

collection is $35,175.00.

C. Comment Request

In accordance with the requirements

of 5 CFR 1320.8(d), the Finance Board

published a request for public

comments regarding this information

collection in the Federal Register on

November 6, 1997. See 62 FR 60093

(Nov. 6, 1997). The 60-day comment

period closed on January 5, 1998. The

Finance Board received no public

comments. Written comments are

requested on: (1) Whether the collection

of information is necessary for the

proper performance of the functions of

the Finance Board, including whether

the information has practical utility; (2)

the accuracy of the Finance Board’s

estimates of the burdens of the

collection of information; (3) ways to

enhance the quality, utility, and clarity

of the information collected; and (4)

ways to minimize the burden of the

collection of information on

respondents, including through the use

of automated collection techniques or

other forms of information technology.

Comments may be submitted to OMB in

writing at the address listed above.

By the Federal Housing Finance Board.

Dated: January 12, 1998.

William W. Ginsberg,

Managing Director.

[FR Doc. 98–1315 Filed 1–20–98; 8:45 am]

BILLING CODE 6725–01–U

FEDERAL MARITIME COMMISSION

[Docket No. 97–18]

APL/MOL/OOCL/HMM Reciprocal Slot

Exchange Agreement (Agreement No.

203/011588) and APL/MOL/HMM

Reciprocal Slot Exchange Agreement,

Agreement No. 203–011596; Order to

Show Cause and Motion To Dismiss

Denied

Introduction

The APL/MOL/OOCL/HMM

Reciprocal Slot Exchange Agreement,

Agreement No. 203–011588 (‘‘the Four

Party Agreement’’) is an agreement for

the reciprocal chartering of space aboard

vessels operated in the U.S. foreign

trades by agreement members.1 The

Four Party Agreement became effective

on October 17, 1997. Agreement No.

203–011596, the APL/MOL/HMM

Reciprocal Slot Exchange Agreement

(‘‘the New Agreement’’), is a space

charter agreement which is intended to

replace the Four Party Agreement.2

Under section 10(c)(6) of the Shipping

Act of 1984 (‘‘1984 Act’’), 46 U.S.C. app.

1709(c)(6), it is unlawful for any

conference or group of two or more

common carriers to:
3116 Federal Register / Vol. 63, No. 13 / Wednesday, January 21, 1998 / Notices

3That case is consolidated with Military Sealift

Command and United States v. FMC, No. 97–1084

and American President Lines v. FMC, No. 97–1085

which are, like No. 97–1083, petitions for review of

the Commission’s order in Military Sealift

Command v. Sea-Land Service, Inc., F.M.C. , 27

S.R.R. 874 (1996) (‘‘MSC’’).

4The procedural schedule in Docket No. 97–18

was postponed by the Secretary on December 1,

1997 until further Commission notice or action on

the Motion.

5 In MSC, the Commission determined that a

provision whose effect appears to be identical to

that of Article 5.1 of the Four Party Agreement and

Article 5.1 of the New Agreement constituted an

allocation of shippers prohibited under section

10(c)(6). Upon complaint filed by the Military

Sealift Command, Department of the Navy (‘‘MSC’’),

a shipper of U.S. preference cargo, the Commission

determined that the provision constituted an

allocation of shippers prohibited by the first clause

of section 10(c)(6). However, the Commission

further determined that the provision was not

unlawful because it was required by an order of the

Maritime Administration, Department of

Transportation (‘‘MarAd’’) which constituted ‘‘law

of the United States’’ within the meaning of the

‘‘except’’ clause of section 10(c)(6).

6Section 5 provides, in relevant part, that ‘‘(a)

true copy of every agreement (with respect to

activities subject to the Act as described in section

4) * * * shall be filed with the Commission

* * *.’’ Notice of the filing of the Agreement was

published in the Federal Register on December 2,

1997, 62 FR 63716 (December 2, 1997).

7Section 6(c), 46 U.S.C. app. section 1705,

provides, inter alia, that ‘‘(u)nless rejected by the

Commission * * *, agreements . . . shall become

effective * * * on the 45th day after filing, or on

the 30th day after notice of the filing is published

in the Federal Register, whichever day is later

* * *.’’

8The language quoted above is also used in

Article 5.1 of the Four Party Agreement, ‘‘Limited

Grant,’’ but it is preceded there by the provision

that: (n)othing in this Agreement shall be construed

as granting a right on the part of any other party

to carry aboard the vessels of American President

Lines, Ltd. cargoes shipped from or to the U.S.

Department of Defense or Agriculture, or any

subsidiary agencies thereof, or any other agency of

the U.S. Government whose shipments are subject

to cargo preference laws of the United States to the

extent requiring and reserved for transportation

aboard U.S.-flag vessels.

9The similar provision for severance of the cargo

preference provision upon a final finding of

unlawfulness in the Four Party Agreement is more

limited.

10MarAd’s waiver, for the remaining term of

APL’s ODS contract through December 1997 and for

Allocate shippers among specific carriers

that are parties to the agreement or prohibit

a carrier that is a party to the agreement from

soliciting cargo from a particular shipper,

except as otherwise required by the law of

the United States or the importing or

exporting country * * *.

The New Agreement contains terms,

also present in the Four Party

Agreement, by which carriage of cargo

subject to U.S. cargo preference laws is

restricted to the U.S.-flag carrier

participant, APL. In its Order to Show

Cause served on October 17, 1997,

Docket No. 97–18, 62 FR 55260 (October

23, 1997), 27 S.R.R. 1304 (1997) (‘‘Show

Cause Order’’), the Commission stated

that the Four Party Agreement appeared

on its face to present a violation of

section 10(c)(6). For reasons similar to

those stated in the Show Cause Order,

it appears that the New Agreement on

its face also presents a violation of

section 10(c)(6). Therefore, pursuant to

section 11 of the 1984 Act, the parties

to the New Agreement are ordered to

show cause why the New Agreement

should not be found to be in violation

of the 1984 Act and should not be

disapproved, canceled or modified

accordingly.

APL filed a Motion to Dismiss Docket

No. 97–18, on the grounds, inter alia,

that ‘‘changed circumstances’’ have

mooted this proceeding, and requested,

in the event that the Commission

determined not to dismiss the

proceeding, that the time for filing

Respondents’ opening submissions,

then due on December 2, 1997, be

extended to 30 days after the Court of

Appeals takes final action in Sea-Land

Service, Inc. v. FMC, D.C. Circuit No.

97–1083.3 Motion of APL to Dismiss the

Proceeding (‘‘Motion’’) at 1.4 The

Commission’s Bureau of Enforcement

(‘‘BOE’’) filed a reply to the Motion.

OOCL filed a Response to the Order to

Show Cause. We address both the New

Agreement and the Motion and

Response in this Order.

Background

This proceeding was instituted

pursuant to sections 10(c)(6) and 11, 46

U.S.C. app. 1710, to determine whether

the Four Party Agreement should be

found to be in violation of the 1984 Act,

and be disapproved, canceled or

modified accordingly. Citing the

Commission’s holding in MSC, the

Commission ordered the parties to the

Four Party Agreement to show cause

why the Agreement should not be found

to violate section 10(c)(6) inasmuch as

Article 5.1 of the Four Party Agreement

appears to effectively allocate U.S.

government shippers of cargo via

agreement members, subject to U.S.

cargo preference laws, to APL, the sole

U.S. carrier member of the Agreement.5

A. The New Agreement

The New Agreement was filed with

the Commission on November 18, 1997,

pursuant to section 5 of the 1984 Act,

46 U.S.C. app. section 1704,6 and

became effective on January 2, 1998.7

The New Agreement authorizes the

parties to charter space on each other’s

vessels on a reciprocal basis in the

trades between ports and points in the

U.S. served via U.S. Pacific Coast ports

and ports and points in the Far East.

The Agreement provides for the

reciprocal sale, exchange or use of up to

an annualized average of 6,000 TEUs of

space per week by Hyundai on vessels

operated by APL and MOL, and for use

by APL and MOL of 7,000 TEUs of

space per week on Hyundai vessels

operating in the trade. The parties may

also agree on feeder operations, sailing

schedules, service frequency, port calls,

addition or withdrawal of capacity, and

the number, type and size of vessels

they will use in the trade. No party may

charter or sub-charter space aboard

another party’s vessel to a third-party

carrier without the consent of the party

operating the vessel.

Article 5.1 of the New Agreement,

‘‘Limited Grant,’’ provides:

Nor shall anything in this Agreement be

construed as granting a right on the part of

any party to carry aboard the vessel of any

other party any cargoes subject to cargo

preference laws of the country of registry of

such other party’s vessel or the country of

citizenship of its owner.8

Article 5.1 further provides:

If the (preceding) sentence * * * shall be

determined to violate U.S. law with respect

to U.S. preference cargoes by a court or

agency of competent jurisdiction and any

stay upon the order of such court or agency

giving effect to such determination arising by

reason of an appeal of such order shall have

ceased to be effective, then the [preceding]

sentence * * * shall be deemed severed with

respect to U.S. preference cargoes,* * *.9

B. APL’s Motion to Dismiss Docket No.

97–18

1. The Motion

APL repeatedly points out that the

Show Cause Order ‘‘focused’’ on the

second sentence of Article 5.1 of the

Four Party Agreement, i.e., the language

quoted above at note 6. Motion at 2, 4.

APL describes various ‘‘intervening

events’’ which purportedly render the

Order to Show Cause moot. APL states

that, with respect to APL’s participation,

the Four Party Agreement has never

been implemented and will never be

implemented because APL intends to

withdraw from that Agreement upon

effectiveness of the New Agreement.

APL also indicates that, in connection

with the acquisition of APL by Neptune

Orient Lines and the transfer of APL’s

ODS Agreements and Maritime Security

Program (‘‘MSP’’) contracts with MarAd

to an independent vessel-operating

company bareboat chartering the

vessels, MarAd withdrew the letter of

March 11, 1997 from the MarAd

Secretary to APL Vice President Michael

Murphy, granting APL a waiver under

section 804(b) of the Merchant Marine

Act, 1936 (‘‘1936 Act’’), 46 U.S.C. app.

1222(b), for APL’s use of foreign-flag

capacity.10 Motion at 4–5. In addition,
Federal Register / Vol. 63, No. 13 / Wednesday, January 21, 1998 / Notices 3117

the full term of each of APL’s nine operating

agreements under the Maritime Security Program

(‘‘MSP’’), included as ‘‘condition D’’ that:

No space on APL’s U.S.-flag vessels that are

subject to space sharing agreements with any

foreign operator shall be utilized for the carriage of

cargo reserved for U.S.-flag vessels under any

statute, resolution or regulation unless such cargo

is carried pursuant to bills of lading or contracts of

carriage issued to, or entered into with, the shipper

of such cargo by or for a citizen of the United States.

Thus, MarAd was alleged to have required the

provision of the Agreement allocating U.S.

preference cargo to APL.

APL suggests that, as a consequence of

the joint Department of Defense

(‘‘DOD’’)-MarAd Voluntary Intermodal

Sealift Agreement (‘‘VISA’’) program,

‘‘DOD itself now reserves its peacetime

cargoes to U.S.-flag vessel operators that

are participants in VISA, thus by

regulation mandating the same result as

the reservation provisions in the

commercial agreements * * *.’’ Motion

at 5. Finally, APL submits that it would

be appropriate to await the possibly

‘‘definitive guidance’’ of the D.C. Circuit

on the issues raised in MSC, which ‘‘are

relevant to the Show Cause order.’’ Id.

at 6.

APL’s request that the proceeding be

dismissed focuss on the parties’

intention, stated by APL, that the

agreement which was the subject of the

Show Cause Order will be supplanted

by the New Agreement and the narrow

scope of the Commission’s focus in that

order, i.e., the second sentence of

Article 5.1, ‘‘which will then have no

possible future significance.’’ Id. at 7.

APL recognizes, however, that the New

Agreement retains the more general

cargo reservation language, but contends

that this provision was not identified as

a basis of potential violation of section

10(c)(6) in the Show Cause Order. Thus,

says APL,

if the Commission should consider this

provision to raise section 10(c)(6) issues that

require Commission consideration, the

appropriate context in which to evaluate

those issues—which are necessarily broader

than and different from those identified in

the Commission’s October 22, 1997 Order—

would be with respect to an agreement in

which that provision has continued effect.

Id. In the event the Commission elects

not to dismiss the proceeding, or to

institute a new proceeding relating to

the New Agreements, APL requests that

the time for filing of Respondents’

opening submissions be extended to a

date 30 days after final court action in

MSC.

2. BOE’s Reply to the Motion

BOE opposes the Motion on the

ground that the issues in Docket No. 97–

18 are not moot, and the proceeding

should not be dismissed, until APL

actually withdraws from the Four Party

Agreement. BOE does not, however,

oppose APL’s request that the time for

Respondents’ initial filing be extended

until 30 days after final action by the

D.C. Circuit in MSC. Although BOE

noted that the New Agreement was

being considered by the staff, it did not

further comment on the validity of the

substantive representations of fact or

law in the Motion.

C. OOCL’s Response to Order to Show

Cause

OOCL filed a Response to the Order

to Show Cause, stating that it has given

notice on December 1, 1997 of its

intention to withdraw from the APAC

Agreement and ‘‘hence will no longer be

a party to (the Four Party) Agreement

* * *.’’ Response To Order To Show

Cause (‘‘Response’’) at 1. In its

Response, OOCL moves that it be

dismissed as a party to this proceeding.

In the alternative, OOCL adopts the

position of APL that the proceeding

should be dismissed, or, in the

alternative, if the proceeding is directed

to a new agreement, that the time for

Respondents’ opening submissions be

extended to 30 days after issuance of the

D.C. Circuit’s mandate in MSC.

OOCL suggests that the Commission

take administrative notice of the filing

of a successor agreement to the Four

Party Agreement, of which OOCL is not

a member. OOCL also joins in APL’s

representations that subsequent events

have rendered the current proceeding

moot.

D. The Maritime Administrator’s Letter

It is not the FMC’s role to decide on

the validity of a MarAd order. MSC, 27

S.R.R. at 888. In initiating this

proceeding, we noted that the

Commission did not undertake to

review the actions of the Maritime

Administrator under his statutory

authority, but to determine whether an

agreement filed pursuant to the 1984

Act required action by MarAd under a

statute which authorizes that agency to

command carrier obedience to orders

cognizable as ‘‘law of the United

States,’’ and whether it had so required

the action specifically taken by the

parties in this instance. We also directed

the Commission’s Secretary to invite the

Acting Administrator to participate

amicus curiae in this proceeding, which

the Secretary did by letter of October 24,

1997.

The Acting Administrator advised the

Commission on December 16, 1997, that

APL ceased to be a party to an ODS

contract as of November 12, 1997, and

therefore is no longer subject to section

804 or the waiver and conditions

imposed in MarAd’s March 11, 1997

letter. The Acting Administrator further

advised the Commission that,

notwithstanding APL’s request that

MarAd impose a similar condition on

APL’s new charter arrangements, MarAd

Did not * * * consider whether such a

condition should be imposed under the

various statutes MarAd administers as a

result of an October 19, 1993 opinion by the

Office of Legal Counsel (OLC) of the

Department of Justice. That opinion * * *

concluded that even though conditions

contained in charter orders approved by

MarAd impose legal obligations on the

chartering parties, those obligations are not

‘‘otherwise required by law’’ for purposes of

the second prong of section 10(c)(6), and that

MarAd lacks authority to impose such

conditions since, in OLC’s view, they would

violate the first prong of section 10(c)(6). The

OLC opinion remains the unified position of

the United States. Given this, MarAd does

not believe that it should participate at this

time as an amicus in the pending FMC

proceeding.

Finally, the Acting Administrator,

noting the filing of the New Agreement

and APL’s announced intention to

withdraw from the Four Party

Agreement, suggested that questions

relating to the lawfulness of the Four

Party Agreement are now moot and that,

in the event the FMC decides

nevertheless to continue the proceeding,

the matter should be held in abeyance

pending the decision of the D.C. Circuit

on review of MSC.

Discussion

A. The New Agreement

The language of Article 5.1 of the New

Agreement does not contain the

language in the Four Party Agreement

which was specifically cited by the

Commission in its Show Cause Order.

However, it does contain the following

more general language which is also in

the Four Party Agreement:

Nor shall anything in this Agreement be

construed as granting a right on the part of

any party to carry aboard the vessel of any

other party any cargoes subject to cargo

preference laws of the country of registry of

such other party’s vessel or the country of

citizenship of its owner.

While this language does not refer

specifically to U.S.-government agency

shippers, its general reference to ‘‘cargo

preference laws’’ would certainly

include those U.S. cargo preference laws

which by their terms effectively allocate

the Department of Defense, the

Department of Agriculture, and other

U.S. government departments and

agencies to U.S.-flag vessels for all or a

major portion of their shipments. Thus

it would have the same effect as the

more specific language of the Four Party
3118 Federal Register / Vol. 63, No. 13 / Wednesday, January 21, 1998 / Notices

11The vessel sharing agreements (‘‘VSAs’’)

involved in MSC provided for the use of twelve

U.S.-flag vessels owned by a U.S. carrier to be

operated on behalf of all of the parties to the

agreements, and to replace all U.S.-flag and foreignflag vessels previously operated by the parties in

the covered trade. By chartering space on a U.S.-

flag vessel, the foreign carriers gained eligibility to

submit bids for military and other government

preference cargoes reserved to U.S.-flag vessels.

However, the foreign carriers agreed that they

would not use any vessels or space chartered from

the U.S. carrier for carriage of government

preference cargo.

12Section 9(c) provides that, with certain

exceptions not relevant here, ‘‘a person may not,

without the approval of the Secretary of

Transportation—

(1) sell, mortgage, lease, charter, deliver, or in any

manner transfer, or agree to sell, mortgage, lease,

charter, deliver, or in any manner transfer, to a

person not a citizen of the United States, any

interest in or control of a documented vessel * * *

owned by a citizen of the United States * * *.’’

46 U.S.C. app. 808(c). The Secretary has

delegated to the Maritime Administrator authority

to carry out sections 9 and 41 of the 1916 Act. 49

CFR 166(a).

13MarAd acted under section 9 on each

individual charter of a U.S.-flag vessel and

incorporated conditions requiring restriction of U.S.

preference cargo to the U.S.-flag carrier member of

the agreements in each of the ‘‘charter orders’’

approving the arrangement, as required by section

41. MarAd has apparently dispensed with

individualized approvals of charters of U.S.-flag

vessels like those at issue in MSC. See 46 CFR

221.13(a)(1) (except as limited by provisions not

relevant here, MarAd ‘‘hereby grants the approval

required by [section 9(c) of the 1916 Act] for the

* * * Charter * * * to a Noncitizen of an interest

in or control of a Documented Vessel owned by a

Citizen of the United States * * *.’’).

14Section 603, 46 U.S.C. app. 1173(a), provides

that, upon approval of an application for ODS

under section 601, the Secretary of Transportation

may enter into a contract with the applicant

‘‘subject to such reasonable terms and conditions

* * * as the Secretary * * * shall require to

effectuate the purposes and policy * * *’’ of the

Act. Section 804(a) provides that it is ‘‘unlawful for

any contractor receiving an operating-differential

subsidy under title VI * * * to own, charter, * * *

or operate any foreign-flag vessel which competes

with any American-flag service’’ on a route deemed

essential by the Secretary, except as provided in

section 804(b). Section 804(b), 46 U.S.C. app.

1222(b), authorizes the Secretary to waive the

prohibition for a specific period of time ‘‘(u)nder

special circumstances and for good cause shown

* * *.’’ The March 11, 1997 MarAd letter states

that the Administrator has found ‘‘special

circumstances’’ and ‘‘good cause’’ for granting the

waiver and that the waiver granted ‘‘is subject to the

* * * conditions and will terminate in the event

any of the conditions are not fulfilled * * *.’’

15The Agreement parties do not represent that

APL sought MarAd approval pursuant to section 9

for use of its U.S.-flag vessels in operations under

the Agreement. The March 11, 1997 MarAd letter

grants authority to APL only under section 804(b)

of the 1936 Act, and does not refer to sections 9 and

41 of the 1916 Act of MarAd authority under those

provisions.

16 In any event, as we noted in the Show Cause

Order, the Military Security Act of 1996, Pub. L.

104–239, 110 Stat. 3118, substantially amended the

1936 Act, creating the Military Security Fleet

Program, 46 U.S.C. app. 1187, et seq. It is a

condition for including any vessel in the Fleet that

the owner or operator of the vessel enter into an

operating agreement governed by the section’s

provisions with the Secretary of Transportation,

which will be one-year, renewable contracts.

Subsection (c) provides that ‘‘[a] contractor of a

vessel included in an operating agreement under

this part may operate the vessel in the foreign

commerce of the United States without restriction,

and shall not be subject to any requirement under’’

certain sections of the 1936 Act dealing with record

keeping, equitable distribution of contracts among

U.S. ports, and discrimination. 46 U.S.C. app.

1187a(c). Section 804 was substantially amended as

well: a new subsection 804(f) provides that nothing

in section 804(a) will preclude a contractor

receiving ODS or MSP assistance from ‘‘entering

into time or space charter or other cooperative

agreements with respect to foreign-flag vessels

* * *.’’ 46 U.S.C. app. 1221(f)(5). The new section

804(f) was made effective as to carriers with

existing ODS contracts on the date on which such

a contractor entered into an MSP contract with

MarAd. 46 U.S.C.A. app. 1222, Historical and

Statutory Notes. APL entered into operating

agreements with MarAd for nine vessels for January

21, 1997.

17 It thus does not appear to be necessary for a

U.S.-flag carrier with an MSP operating agreement

to seek a waiver under section 804(b) in order to

participate in a space charter or vessel sharing

agreement. Nevertheless, on January 17, 1997, APL

filed a request with MarAd for a waiver under

section 804(b) of the 1936 Act for operation of up

to 18 foreign-flag vessels. Notice of its filing was

published January 29, 1997. 62 FR 4377 (January

29, 1997). The March 11, 1997 MarAd letter granted

APL’s request. The waiver provides that APL may

‘‘own, operate or charter’’ up to 18 foreign-flag

vessels.

Agreement: U.S. government entities

which ship cargo via agreement

members are allocated to APL.

As we noted in our Show Cause Order

concerning the Four Party Agreement,

the New Agreement presents issues

similar to those decided by the

Commission in MSC.11 The VSAs

involved in MSC required the approval

of the Secretary of Transportation for

the charter or transfer of a U.S.-flag

vessel to a non-citizen under section 9

of the Shipping Act, 1916 (‘‘1916 Act’’),

46 U.S.C. app. 808, subject to the broad

power to prescribe conditions—

violations of which are crimes

punishable by fines, imprisonment and

vessel forfeiture—given the Secretary in

section 41.12 MarAd’s approval of the

charters of the U.S.-flag vessels and

vessel space to foreign-flag carrier

members of the VSAs were conditioned

on the exclusion of the foreign-flag

participants from use of the vessels to

carry U.S. preference cargo.13 The

Commission specifically found that the

conditional charter orders issued by

MarAd pursuant to sections 9 and 41 of

the 1916 Act had the force and effect of

law because they were compulsory and

the statute provided criminal penalties

for noncompliance. MSC, 27 S.R.R. at

889.

The Commission’s inquiry in MSC

included the threshold conclusion that

MarAd action under the 1916 Act was

a prerequisite for the existence of the

agreement at issue: the U.S.-flag vessels

could not be chartered to the foreign

carrier agreement parties without

approval. Id. at 876. Here, as we noted

in the Show Cause Order with respect

to the Four Party Agreement, no similar

nexus between the New Agreement and

the statutory authority of the Maritime

Administrator is evident. This case

apparently does not involve the 1916

Act authority exercised by MarAd with

respect to the space charter agreements

at issue in MSC.

Until the November 12, 1997

consummation of its acquisition by

Neptune Orient Line (‘‘NOL’’), APL

operated U.S.-flag vessels under

operating-differential subsidy contracts

with MarAd pursuant to Title VI and

sections 801 and 804 of the 1936 Act,

46 U.S.C. app. 1171 et seq. and 1211

and 1222.14 MarAd’s March 11, 1997

letter granted APL’s request for a waiver

under section 804(b) of 1936 Act for

APL to own, operate or charter up to 18

foreign-flag vessels in line haul service

between U.S. and foreign ports for the

remaining term of APL’s Operating

Differential Subsidy Agreement

(‘‘ODSA’’), Contract MA/MSB–417,

through December 31, 1997 and for the

full term of each of APL’s nine operating

agreements under the MSP, Contract

Nos. MA/MSP–1 through MA/MSP–9,

subject to the conditions imposed.15

During FMC review of the Four Party

Agreement, APL suggested that the

March 11, 1997 MarAd letter should be

considered ‘‘law of the United States’’

within the meaning of the ‘‘except

clause’’ of section 10(c)(6). This

argument was dealt with a length in the

Show Cause Order. 62 FR 55262–55263,

27 S.R.R. 1306–1308.16

Moreover, as MarAd noted in

promulgating its final regulations for the

MSP, ‘‘[u]nlike the operating differential

subsidy * * * program, the MSP has

few restrictions on vessels operating in

the U.S.-foreign commerce * * *.’’ 62

FR 37733 (July 15, 1997). Under the

provisions of the 1936 Act, as amended

by the Maritime Security Act of 1996,

no recourse to the Maritime

Administration appears to be required

for APL’s participation in the Four Party

Agreement or the New Agreement.17

MarAd’s withdrawal of the March 11,

1997 section 804 waiver, which

occurred after issuance of our Show

Cause Order, would suggest that this

argument no longer may be said to

apply to APL’s operations under the

Four Party Agreement or the New

Agreement. No colorable argument that

the effective allocation of U.S.

government shippers of cargo subject to

the U.S. cargo preference laws by
Federal Register / Vol. 63, No. 13 / Wednesday, January 21, 1998 / Notices 3119

18No stay was requested or suggested as

necessary by any party in the context of the MSC

proceeding.

Article 5.1 of the New Agreement is

‘‘required by the law of the United

States’’ as a result of the March 11, 1997

MarAd letter or other MarAd action

under the 1936 Act appears to exist.

In discussion with the staff

concerning Article 5.1 of the New

Agreement, and in its Motion, however,

APL advanced the view that the

allocation issue was essentially moot as

a result of various actions of MarAd and

DOD, including significant policy

changes by DOD relating particularly to

the VISA program. Thus, in the Motion

and in discussions concerning the New

Agreement, APL has argued that the

effect of the VISA program is to

authorize or require the allocation

provision of the New Agreement. As it

noted in MSC, the Commission must,

‘‘[u]nder ordinary circumstances, * * *

consider the text and any relevant

analyses of the proffered law [said to

create an exception to the prohibition of

section 10(c)(6)], and render a

conclusion as to whether the law

commanded the actions that otherwise

might fall within section 10(c)(6)’s

prohibition clause.’’ MSC, 27 S.R.R. at

888.

MarAd administers the VISA program

under authority of section 708 of the

Defense Production Act of 1950, as

amended, 50 U.S.C. app. 2158. The

VISA program provides for agreements

entered into between MarAd and the

operators of U.S.-flag vessels and

establishes a ‘‘prioritized order for

utilization of commercial sealift

capacity to meet DOD peacetime and

contingency requirements * * *.’’ 62

FR 6840 (February 13, 1997). The

program emphasizes use of U.S.-flag

vessel capacity operated by VISA

participants or available to VISA

participants under VSAs for the carriage

of DOD peacetime cargo and assures the

availability of U.S.-flag capacity for

DOD contingency use. Although the

program establishes priorities under

which DOD will call upon the operators

of U.S-flag vessels to provide capacity,

by awarding contracts and booking

cargo, neither the MarAd rules for the

VISA program itself nor any DOD policy

or contract provision thus far called to

our attention appears to reserve

aggregate DOD peacetime cargo to VISA

participants. No prohibition against the

use of the vessel capacity of a VISA

participant made available to a non-U.S.

carrier member of a VSA for carriage of

DOD cargo is contained in the

regulations promulgated by MarAd.

Moreover, those regulations and the

VISA program itself relate only to cargo

shipped by DOD. Other U.S.

government departments and agencies,

which are also subject to the U.S. cargo

preference laws, are unaffected by the

VISA program. These shippers would be

allocated to APL by the terms of Article

5.1 of the New Agreement. No

requirement for the exclusion of

agreement parties other than APL from

bidding on DOD or other governmentshipped cargo arises from the VISA

regulations or other U.S. law, or the

DOD contracts under VISA.

The parties apparently recognize that

the allocation issues raised by the New

Agreement would most appropriately be

addressed in a formal proceeding: both

APL’s Motion and OOCL’s Response

suggest such a course of action. In view

of the possibility that Agreement No.

203–011596 may be merely an interim

measure to see the parties through the

restructuring of their various alliances,

and may be replaced by yet another

version of the parties’ space sharing

arrangement, we find it most

appropriate to address these issues in

the context of the existing proceeding,

Docket No. 97–18, rather than to initiate

a new proceeding.

Therefore, the parties to the New

Agreement are ordered to show cause

why it does not violate section 10(c)(6)

for the same reasons which prompted us

to institute a proceeding against the

Four Party Agreement: A prima facie

case appears to exist that the provision

is unlawful and is not otherwise

required by the law of the United States.

The parties to the New Agreement are

ordered to show cause why Article 5.1

of the New Agreement should not be

disapproved, canceled or modified, as

part of this proceeding.

B. The Motion and Response

We agree with BOE that dismissal of

the Show Cause proceeding with respect

to the Four Party Agreement is

premature. Termination of this

proceeding with respect to the Four

Party Agreement may be proper when

and if the Four Party Agreement itself is

terminated. However, it does not appear

at this time that either APL’s or OOCL’s

cessation of operations under the Four

Party Agreement will occur

simultaneously with the effectiveness of

the New Agreement. We may act to

modify the proceeding at any time it

appears appropriate, with or without

further request of the parties.

APL’s further suggestion that the

Commission delay action on this issue

until 30 days after the D.C. Circuit has

acted in MSC is without merit. This

would effectively stay the Commission’s

determination that the allocation of

preference cargo in an agreement

permitting the charter of space on U.S.-

flag vessels by foreign lines constitutes

a violation of section 10(c)(6). The

Commission’s determination of this

legal issue remains in effect, no stay

having been entered by the Commission

or any court of competent jurisdiction.18

As we noted in MSC, an order by an

administrative agency is presumed to be

valid until such time as it is overturned

by a court of competent jurisdiction.

See, e.g., Citizens to Preserve Overton

Park, Inc. versus Volpe, 401 U.S. 402,

415–16 (1971); Motor Vehicle

Manufacturers Association of the

United States, Inc. versus Ruckelshaus,

719 F.2d 1159, 1164 (D.C. Cir. 1983).

Accordingly, the appeal of the MSC

decision provides no basis to permit the

effectiveness, without investigation, of

allocation language based on U.S. cargo

preference laws having the same or

similar effects to that found in MSC to

constitute a violation of section 10(c)(6).

Therefore, the Motion is denied with

respect to delay of the filing of initial

submissions until 30 days after issuance

of the decision in MSC by the D.C.

Circuit. A new procedural schedule for

the conduct of this proceeding is

established below.

As a result of MarAd’s withdrawal of

the March 11, 1997 section 804 waiver,

no question remains as to whether that

letter constitutes ‘‘law of the United

States,’’ within the meaning of section

10(c)(6), requiring the cargo preference

reservation in either of the Agreements.

It would therefore appear that no basis

exists as a matter of law or of fact at this

time for dismissal of the existing

proceeding with respect to the Four

Party Agreement.

Now therefore, it is ordered, that

pursuant to section 11 of the Shipping

Act of 1984, American President Lines,

Ltd., Mitsui O.S.K. Line, Ltd., and

Hyundai Merchant Marine, Ltd. show

cause why they should not be found to

have violated section 10(c)(6) of the

Shipping Act of 1984 by prohibiting

specific carriers that are parties to the

APL/MOL/HMM Reciprocal Slot

Exchange Agreement, Agreement No.

203–011596, from soliciting cargo from

a particular shipper or shippers;

It is further ordered, that American

President Lines, Ltd., Mitsui O.S.K.

Line, Ltd., and Hyundai Merchant

Marine, Ltd. show cause why an order

should not be issued disapproving,

canceling or modifying the APL/MOL/

HMM Reciprocal Slot Exchange

Agreement, Agreement No. 203–011596;

It is further ordered, that the Motion

to Dismiss Docket No. 97–18 of

American President Lines, Ltd. is

denied;
3120 Federal Register / Vol. 63, No. 13 / Wednesday, January 21, 1998 / Notices

It is further ordered, that the Motion

of Orient Overseas Container Lines, Inc.

to be dismissed as a party to Docket No.

97–18 is denied;

It is further ordered, that any person

having an interest and desiring to

intervene in this proceeding in

connection with the APL/MOL/HMM

Reciprocal Slot Exchange Agreement,

Agreement No. 203–011596, shall file a

petition for leave to intervene in

accordance with Rule 72 of the

Commission’s rules of practice and

procedure, 46 CFR 502.72. Such petition

shall be accompanied by the petitioner’s

memorandum of law and affidavits of

fact, if any, and shall be filed no later

than the day fixed below;

It is further ordered, that affidavits of

fact and memoranda of law addressing

issues with respect to both the Four

Party Agreement and the New

Agreement shall be filed by

Respondents and any intervenors in

support of Respondents no later than

February 20, 1998;

It is further ordered, that reply

affidavits and memoranda of law

addressing issues with respect to both

the Four Party Agreement and the New

Agreement shall be filed by the Bureau

of Enforcement and any intervenors in

opposition to Respondent no later than

March 20, 1998;

It is further ordered, that rebuttal

affidavits and memoranda of law

addressing issues with respect to both

the Four Party Agreement and the New

Agreement shall be filed by

Respondents and intervenors in support

no later than April 3, 1998;

It is further ordered, that, should any

party believe that an oral argument is

required, that party must submit a

request specifying the reasons therefore

and why argument by memorandum is

inadequate to present the party’s case.

Any request for oral argument shall be

filed no later than April 3, 1998;

It is further ordered, that notice of this

Order to Show Cause be published in

the Federal Register, and that a copy

thereof be served upon Respondents;

It is further ordered, that all

documents submitted by any party of

record in this proceeding shall be filed

in accordance with Rule 118 of the

Commission’s rules of practice and

procedure, 46 CFR 502.118, as well as

being mailed directly to all parties of

record;

Finally, it is ordered, that pursuant to

the terms of Rule 61 of the

Commission’s rules of practice and

procedure, 46 CFR 502.61, the Order to

Show Cause served October 17, 1997 in

this proceeding is amended to require

that the final decision of the

Commission in this proceeding shall be

issued by July 3, 1998.

By the Commission.

Joseph C. Polking,

Secretary.

[FR Doc. 98–1291 Filed 1–20–98; 8:45 am]

BILLING CODE 6730–01–M

FEDERAL RESERVE SYSTEM

Agency Information Collection

Activities: Submission to OMB Under

Delegated Authority

Background

Notice is hereby given of the final

approval of proposed information

collections by the Board of Governors of

the Federal Reserve System (Board)

under OMB delegated authority, as per

5 CFR 1320.16 (OMB Regulations on

Controlling Paperwork Burdens on the

Public). The Federal Reserve may not

conduct or sponsor, and the respondent

is not required to respond to, an

information collection that has been

extended, revised, or implemented on or

after October 1, 1995, unless it displays

a currently valid OMB control number.

FOR FURTHER INFORMATION CONTACT:

Chief, Financial Reports Section--Mary

M. McLaughlin--Division of Research

and Statistics, Board of Governors of the

Federal Reserve System, Washington,

DC 20551 (202-452-3829).

OMB Desk Officer--Alexander T. Hunt-

-Office of Information and Regulatory

Affairs, Office of Management and

Budget, New Executive Office

Building, Room 3208, Washington,

DC 20503 (202-395-7860).

Final approval under OMB delegated

authority of the extension for three

years, with revision, of the following

report:

1. Report title: Government Securities

Dealers Reports

Agency form number: FR 2004A, FR

2004B, FR 2004C, FR 2004SI, FR

2004WI

OMB Control number: 7100-0003

Frequency: weekly and on occasion

Reporters: primary dealers in U.S.

government securities

Annual reporting hours: 11,817

Estimated average hours per response:

1.0 (FR 2004A, B, C, SI); 0.25 (FR

2004WI)

Number of respondents: 39

Small businesses are not affected.

General description of report: This

information collection is voluntary (12.

U.S.C. 248(a)(2), 353-359, and 461) and

is given confidential treatment (5 U.S.C.

552 (b)(4)).

Abstract: This group of reports is used

to collect data on positions,

transactions, and financing activity in

the government securities market from

primary dealers in U.S. government

securities. The Federal Reserve uses the

data to monitor the condition of the U.S.

government securities market in its

surveillance of the market and to assist

the U.S. Department of the Treasury.

The revisions are effective beginning

with the January 28, 1998, report date.

On the FR 2004A and FR 2004B a line

has been added to report position and

transaction volumes with respect to

Treasury Inflation-Index Securities. On

the FR 2004A and FR 2004B four lines

have been added to provide greater

detail regarding the dealers’ federal

agency securities positions and

transaction volumes. On the FR 2004C,

two columns of matched-book financing

transactions have been deleted. The

revisions, on a net basis, have no effect

on the current annual reporting burden.

The Board of Governors received one

comment, from The Bond Market

Association, which strongly endorsed

the revisions.

Final approval under OMB delegated

authority of the extension for three

years, without revision, of the following

reports:

1. Report title: Domestic Branch

Notification

Agency form number: FR 4001

OMB control number: 7100-0097

Frequency: on occasion

Reporters: state member banks

Annual reporting hours: 201

Estimated average hours per response:

30 minutes for expedited notifications;

1 hour for nonexpedited notifications

Number of respondents: 316 expedited,

43 nonexpedited

Small businesses are affected.

General description of report: This

information collection is mandatory (12

U.S.C. 321) and is not given confidential

treatment.

Abstract: The Federal Reserve System

requires a state member bank to file a

notification whenever it proposes to

establish a domestic branch. There is no

formal reporting form; banks notify the

Federal Reserve by letter prior to

making the proposed investment. The

Federal Reserve uses the information to

fulfill its statutory obligation to obtain

public comment on such proposals

before acting on them, and to otherwise

supervise state member banks.

2. Report title: Investment in Bank

Premises Notification

Agency form number: FR 4014

OMB control number: 7100-0139

Frequency: on occasion

Reporters: state member banks

Annual reporting hours: 8

Estimated average hours per response:

30 minutes