61544 Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Proposed Rules 

FEDERAL MARITIME COMMISSION 

46 CFR Part 515 

[Docket No. 13–05] 

RIN 3072–AC44 

Ocean Transportation Intermediary 

Licensing and Financial Responsibility 

Requirements, and General Duties 

AGENCY: Federal Maritime Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Federal Maritime 

Commission proposes to amend its rules 

governing the licensing, financial 

responsibility requirements and duties 

of Ocean Transportation Intermediaries. 

The proposed rule is intended to adapt 

to changing industry conditions, 

improve regulatory effectiveness, 

improve transparency, streamline 

processes and reduce regulatory 

burdens. 

DATES: Comments are due on or before 

December 12, 2014. 

ADDRESSES: Address all comments 

concerning this proposed rule to: 

Karen V. Gregory, Secretary, 

Federal Maritime Commission, 

800 North Capitol Street NW., 

Washington, DC 20573–0001, 

Phone: (202) 523–5725, 

Email: secretary@fmc.gov. 

FOR FURTHER INFORMATION CONTACT: 

Vern W. Hill, Managing Director, 

Office of the Managing Director, 

Federal Maritime Commission, 

800 North Capitol Street NW., 

Washington, DC 20573–0001, 

Tel.: (202) 523–5800, 

Email: OMD@fmc.gov. 

SUPPLEMENTARY INFORMATION: 

Submit Comments: Include in the 

subject line: Docket No. 13–05, 

Comments on Ocean Transportation 

Intermediary Regulation Revisions. 

Non-confidential filings may be 

submitted in hard copy or as a Microsoft 

Word or PDF attachment addressed to 

secretary@fmc.gov. Confidential filings 

must be accompanied by a transmittal 

letter that identifies the filing as 

‘‘confidential’’ and describes the nature 

and extent of the confidential treatment 

requested. Any comment that contains 

confidential information must consist of 

the complete filing and be marked by 

the filer as ‘‘Confidential-Restricted,’’ 

with the material claimed to be 

confidential clearly marked on each 

page. A public version must be 

submitted with the confidential version 

if applicable. The Commission will 

provide confidential treatment to the 

extent allowed by law for submissions, 

or parts of submissions, for which the 

filer requests confidentiality. Questions 

regarding filing or treatment of 

confidential responses to this notice 

should be directed to the Commission’s 

Secretary, Karen V. Gregory, at the 

telephone number or email provided in 

this notice. 

Background 

In 1998, Congress passed the Ocean 

Shipping Reform Act (OSRA), Public 

Law 105–258, 112 Stat. 1902, amending 

the Shipping Act of 1984 in several 

respects relating to ocean freight 

forwarders (OFFs) and non-vesseloperating common carriers (NVOCCs), 

defining both as ocean transportation 

intermediaries (OTIs). The Commission 

thereafter adopted new regulations at 46 

CFR Part 515 to implement changes 

effectuated by OSRA. Licensing, 

Financial Responsibility Requirements, 

and General Duties for Ocean 

Transportation Intermediaries, 28 SRR 

629–654 (March 8, 1999). (Docket No. 

98–28 Final Rule). 

On May 21, 2013 the Commission 

published an Advance Notice of 

Proposed Rulemaking (ANPR) 

proposing the first significant 

modifications to Part 515 in fourteen 

years. 78 FR 32946, May 31, 2013. The 

Commission received over eighty 

comments from the public within the 

extended comment closing date. Though 

OTIs submitted the largest number of 

comments, significant comments were 

also submitted by associations of OTIs, 

vessel operating common carriers 

(VOCCs), groups of VOCCs, individual 

financial responsibility providers and 

surety associations. After reviewing the 

comments and identifying provisions 

that had drawn strong views from a 

sizeable number of OTIs and others, the 

Commission determined to make the 

following changes in the modifications 

proposed in the ANPR: 

• Drop all proposed financial 

responsibility increases. ANPR section 

515.21. The current required levels will 

remain unchanged. 

• Eliminate new potential 

qualifications specified for OTIs and 

their Qualifying Individuals (QIs). 

ANPR sections 515.2(p), 515.11(a)(1)– 

(2), (b), (c), (e). Also dropped the 

proposed shortened deadline for 

replacing a QI after the QI’s death, 

retirement or resignation. ANPR section 

515.20(c). The current 30-day 

requirement to replace a QI is retained. 

• Remove the proposed additional 

bases specified for revocation or 

suspension of licenses (ANPR section 

515.16) and termination or suspensions 

of registrations of foreign-based 

NVOCCs (ANPR section 515.19(g)). 

• Delete the proposed tiered claim 

and claim processing system that would 

give shippers priority to the proceeds of 

an OTI’s financial responsibility. ANPR 

section 515.23(c)–(d). The current rules 

covering claims and claim processing 

remain unchanged. The requirement in 

ANPR section 515.21(a)(4), that OTIs 

restore their financial responsibility to 

the full required amount within 60 days 

of a claim being paid against it, is also 

dropped. 

• Eliminate draft requirements on 

common carriers and marine terminal 

operators to notify the Commission of 

their court or other transportation 

claims against OTIs, as well as the 

requirement that such notifications 

would be published on the 

Commission’s Web site. ANPR section 

515.23(e)–(f). 

• Delete the proposed added 

documentation requirements for OTIs 

and agents (ANPR section 515.31(a) and 

(c)), including a requirement for agency 

agreements to be in writing (ANPR 

section 515.31(k)). 

• Remove the potential provision 

establishing a rebuttable presumption 

that an agent acts on its own behalf if 

it does not include the name and license 

or registration number of an OTI on 

documents the agent issues. ANPR 

section 515.23(a). 

• Drop the proposed new 

requirements on OTIs to include their 

license and registration numbers in their 

advertisements and to require their 

agents to include their principals’ 

names and addresses in their 

advertising. ANPR section 515.31(j)(1). 

• Remove a new requirement on OTIs 

and agents not to include false or 

misleading information in 

advertisements. ANPR section 

515.31(j)(2). 

• Remove proposed provision 

establishing a rebuttable presumption 

that an entity has performed the services 

it advertised. ANPR section 515.31(j)(3). 

• Delete the term ‘‘Advertisement’’ in 

ANPR section 515.2(a), as a 

consequence of the elimination of ANPR 

section 515.31(j). 

• Drop fees for renewals of OTI 

licenses and registrations. 

• Drop the proposal for a Certificate 

of Good Standing to be submitted for 

renewals. 

The Commission determined to drop 

from this proceeding further 

consideration of a new NVOCC license 

category for those operating only in the 

household goods trade. Features of such 

a license category would be a lower 

financial responsibility requirement, 

tailored standards for such OTIs, and 

the development of guidelines for such 

a separate license category. Such a 

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Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Proposed Rules 61545 

license category was included as one of 

a number of recommendations adopted 

by the Commission with respect to its 

consideration of the Final Report for 

Fact Finding Investigation No. 27, 

Potentially Unlawful, Unfair or 

Deceptive Ocean Transportation 

Practices Related to the Movement of 

Household Goods or Personal Property 

in U.S.-Foreign Oceanborne Trades. 

Other suggestions deemed beyond the 

scope of the changes proposed for the 

Commission’s OTI regulations will not 

be considered for purposes of this 

NOPR. 

The Notice of Proposed Rulemaking 

The modifications in this NOPR 

address changes in industry conditions, 

streamline internal processes, improve 

transparency, and remove unwarranted 

regulatory burdens. The NOPR also 

reflects the Commission’s experience in 

implementing the current regulations 

since 1999, and addresses issues and 

questions that have arisen over time. 

The NOPR includes several issues 

first addressed in the ANPR: 

• Carries forward requirements for 

renewal of licenses and registrations but 

the frequency is changed to every three 

years (from 2 years), and provides that 

renewal forms will be entirely on-line 

and user-friendly. 

• Carries forward the requirement 

that common carriers verify OTI 

licenses and registrations, tariff 

publication and financial responsibility, 

provided such verifications can be made 

at a single location on the Commission’s 

Web site. 

• Carries forward a new expedited 

hearing procedure, subject to the 

following provisions: (1) The procedure 

will not result in summary revocations, 

terminations or suspensions; (2) a 

licensee must be given notice and a 

hearing for failure to renew; and, (3) 

appeals to the Commission remain 

available for adverse decisions. 

Significant proposed changes are 

discussed below. 

Subpart A—General 

Section 515.2—Definitions 

The Commission proposes to remove 

several definitions that are no longer 

relevant to the Commission’s regulatory 

activities, including ‘‘ocean freight 

broker’’ (§ 515.2(n)), ‘‘brokerage’’ 

(§ 515.2(d)) and ‘‘small shipment’’ 

(§ 515.2(u)). 

In addition, the Commission proposes 

modifying the definition of ‘‘person’’ 

(§ 515.2(n)). The revised definition not 

only conforms to the definition of 

‘‘person’’ in 1 U.S.C. 1, but also 

specifically includes ‘‘limited liability 

companies,’’ while retaining the current 

language that entities covered are those 

‘‘existing under or authorized by the 

laws of the United States or of a foreign 

country.’’ 

The definition of ‘‘principal’’ 

(§ 515.2(o)) is revised to make it more 

concise and is not intended to change 

its meaning or scope. This definition 

has been carried forward over the 

decades substantially unchanged but 

always limited in focus to principals of 

licensed ocean freight forwarders. It was 

first promulgated pursuant to the 

Shipping Act, 1916, as amended, and 

carried forward in regulations 

implementing the Shipping Act of 1984 

and OSRA. 

It is significant that the type of 

principal referred to in this definition is 

the person or entity to whom a licensed 

ocean freight forwarder owes a fiduciary 

duty. In contrast, the use of the word 

‘‘principal’’ in these regulations is 

focused upon an OTI’s status (whether 

an NVOCC or a licensed ocean freight 

forwarder) as the principal with respect 

to the various types of agents that the 

OTI may employ to carry on its 

business. 

The absence of a definition for 

‘‘principal’’ where it refers to an OTI 

acting as the principal is consistent with 

the Commission’s decision in 1999 not 

to define the term agent when 

implementing the OSRA amendments. 

There the Commission reasoned that 

defining ‘‘agent’’ was unnecessary 

‘‘because the term is used . . . to reflect 

the large body of agency law. The 

Commission does not want to 

inappropriately alter that definition, 

thus limiting or conflicting with the law 

relied on by the shipping industry in 

applying these regulations.’’ Docket No. 

98–28 Final Rule, supra at 28 SRR 651. 

The Commission adheres to its prior 

view that there is no need to further 

define the term ‘‘principal’’ in such 

contexts. 

The definitions of ‘‘freight forwarding 

services’’ (§ 515.2(h)) and ‘‘non-vesseloperating common carrier services’’ 

(§ 515.2(k)) are also revised to better 

reflect OTIs’ current practices and 

terminology. For example, ‘‘freight 

forwarding services’’ are revised to 

include preparation of ‘‘export 

documents, including required 

‘electronic export information,’ ’’ rather 

than being limited to preparation of 

paper-based export declarations 

(§ 515.2(h)(2)). OFF and NVOCC 

services are both revised to include 

preparation of ocean common carrier 

and NVOCC bills of lading ‘‘or other 

shipping documents’’ (§ 515.2(h)(5) and 

§ 515.2(k)(4)). The change ensures that 

the services cover preparation of the 

documents pursuant to which cargo is 

transported whether or not they are 

‘‘equivalent’’ to ocean bills of lading, as 

provided in the current definition of 

‘‘freight forwarding services.’’ 46 CFR 

§ 515.2(h)(5). 

As indicated above, the ANPR 

definition of ‘‘advertisement’’ in section 

515.2(a) is deleted as unnecessary, 

consistent with the deletion of ANPR 

section 515.31(j). Proposed section 

515.2(a) contains the definition of ‘‘Act 

or Shipping Act of 1984.’’ These 

alternative references to the 

Commission’s governing statute, as 

recodified into positive law in 2006, 

appear throughout Part 515. 

The definition of ‘‘registered nonvessel-operating common carrier’’ is 

new. It identifies NVOCCs that are 

located outside of the United States and 

opt to register rather than to obtain a 

license. 

The term ‘‘qualifying individual’’ is 

added and defines QI as an individual 

who meets the Shipping Act’s 

experience and character requirements. 

The QI must meet those requirements at 

the time a license is issued and must 

thereafter maintain the necessary 

character. The OTI must timely replace 

the QI, as provided by the Commission’s 

rules, when the designated QI ceases to 

act as the QI, whether by resignation, 

retirement or death. 

Section 515.3—License; When Required 

This section is modified to delete, as 

unneeded, a requirement that 

‘‘separately incorporated branch offices’’ 

must be licensed when they serve as 

agent of a licensed OTI. All separately 

incorporated entities that perform OTI 

services, for which they assume 

responsibility for the transportation, are 

covered by the requirements that they 

be licensed and otherwise comply with 

the financial responsibility obligations 

of Part 515. The Commission also 

deletes the requirement that only 

licensed intermediaries in the United 

States may perform OTI services on 

behalf of ‘‘an unlicensed ocean 

transportation intermediary’’ (i.e., 

foreign-based NVOCC), substituting in 

its stead the requirement that 

‘‘registered NVOCC[s]’’ must use 

licensed OTIs as agents in the United 

States with respect to OTI services 

performed in the United States. 

Section 515.4—License; When Not 

Required 

Section 515.4(b)—Branch Offices. The 

Commission proposes to eliminate the 

regulatory burden associated with 

procuring and maintaining additional 

financial responsibility to cover an 

OTI’s unincorporated branch offices by 

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61546 Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Proposed Rules 

deleting the reference to obtaining 

additional financial responsibility 

currently set out in section 515.4(b)(ii). 

A corresponding change is made to 

section 515.21 by deleting the current 

text of paragraph 515.21(a)(4). The rule 

also proposes to delete section 515.4(d), 

which refers to ocean freight brokers, as 

it is no longer needed. 

Section 515.5—Forms and Fees 

Section 515.5(b) is modified to 

provide that all license applications and 

registration forms must be filed with the 

Commission electronically unless a 

waiver request to file on paper is 

granted by the Director of the Bureau of 

Certification and Licensing. Electronic 

filing anticipates the implementation of 

on-line filing and processing of all 

applications and forms. 

Section 515.5(c)(1) has been added 

and requires OTIs to pay applicable fees 

within ten (10) business days of the time 

of submission of such applications and 

forms. As the Commission has 

developed the ability to receive on-line 

payments by credit or debit cards via 

Pay.gov and the Automated Clearing 

House system, the payment of any 

applicable fees is simplified and 

facilitates the OTI’s ability to pay within 

the 10-day window. Failure to make 

timely payment could cause an 

application or registration to be rejected. 

Section 515.5(c)(2) is added to make 

it easier for OTI applicants and 

licensees to quickly find the fees that 

apply to filings they make, by setting 

out all fees applicable under Part 515 

(e.g., fees for filing of license 

applications and registrations) in one 

place. Section 515.5(c)(2) directs OTIs to 

the substantive sections in Part 515 that 

give rise to the fees. 

Subpart B—Eligibility and Procedure 

for Licensing; Procedure for 

Registration 

Section 515.11—Basic Requirements for 

Licensing; Eligibility 

The revisions in ANPR section 

515.11(a)(1) have been dropped from 

further consideration, and the paragraph 

as it appears in the Commission’s 

current regulation will remain 

unchanged, except for the addition of a 

sentence clarifying the experience 

required of a foreign-based NVOCC that 

elects to become licensed. Such foreignbased NVOCCs must acquire the 

requisite experience with respect to 

shipments in the United States 

oceanborne foreign commerce, though 

the experience may be acquired in the 

U.S. or a foreign country. The added 

sentence reflects the standard that has 

been applied by the Commission since 

1999. 

The current content of section 

515.11(a)(2) is modified by deleting its 

content as redundant. The requirements 

in section 515.21(a) (prohibiting all 

persons from operating as an OTI 

without having furnished the required 

financial responsibility) and § 515.22 

(requiring an OTI establish its financial 

responsibility prior to the date it 

commences furnishing OTI services) 

clearly provide that an OTI must first 

obtain financial responsibility before it 

performs OTI services. 

The new content inserted in section 

515.11(a)(2), as proposed, makes it clear 

that the Commission may consider all 

information relevant to the 

determination of whether the applicant 

has the necessary character to render 

OTI services. Types of information that 

may be considered include, but are not 

limited to: Violations of any shipping 

laws or statutes relating to the import, 

export or transport of merchandise in 

international trade; operating as an OTI 

without a license or registration; state 

and federal felonies and misdemeanors; 

voluntary and non-voluntary 

bankruptcies not discharged; tax liens; 

court and administrative judgments and 

proceedings; non-compliance with 

immigration status requirements; and 

denial, revocation, or suspension of a 

Transportation Worker Identification 

Credential or of a customs broker’s 

license. The types of information that 

may be considered with respect to 

character, set out in NOPR section 

515.11(a)(2), reflect the types of 

information that the Commission’s 

Bureau of Certification and Licensing 

(BCL) has considered and applied 

during the 15 years since the current 

regulations went into effect. This 

section informs applicants of issues that 

should be addressed in filing their 

applications so as not to unnecessarily 

delay processing of their applications. 

The current content of section 

515.11(a)(3) is no longer needed. The 

paragraph is deleted, as it provided for 

NVOCCs that had tariffs and financial 

responsibility in place at the time the 

OSRA licensing requirements went into 

effect in 1999 to be temporarily 

grandfathered pending promulgation of 

regulations. 

The existing requirement in section 

515.11(b)(2) that all partners must 

execute an OTI’s application is deleted. 

The current wording of 515.11(b)(3) as 

to corporations is retained. 

Section 515.11(b)(4) is added to 

identify the positions within the 

management structure of an LLC that are 

eligible to be designated as QI. The QI 

may be an ‘‘officer’’ of an LLC if the 

LLC’s operating agreement so provides. 

The Commission has applied this 

standard since the current regulations 

were promulgated in order to adapt to 

OTIs’ frequent election to form their 

businesses as LLCs. 

The Commission considers it 

desirable to revise section 515.11(e) to 

mirror the Commission’s 1999 

clarification that, in order for a foreignbased NVOCC to establish a presence in 

the United States for purposes of 

obtaining a license, it ‘‘must set up an 

unincorporated office that is resident in 

the United States.’’ Docket No. 98–28, 

Licensing, Financial Responsibility 

Requirements, and General Duties for 

Ocean Transportation Intermediaries 

(Confirmation of interim final rule and 

correction), 28 SRR 667, 668 (FMC 

1999). 

Section 515.12—Application for License 

Section 515.12(a) is revised to clarify 

instructions on filing a license 

application, including the payment of 

fees. The Commission recently issued a 

direct final rule establishing that notices 

of application filings shall be made on 

the Commission’s Web site. See, Docket 

14–08, Procedure for Public Notification 

of Ocean Transportation Intermediary 

Licensing Activity. 79 FR 42986, July 24, 

2014. The direct final rule similarly 

provides that Commission notices of 

license revocations and suspensions, 

required by section 515.16(b), will be 

made on the Commission’s Web site. As 

this rule has already become effective, 

there is no need to further address it in 

this rulemaking proceeding. 

Section 515.12(b) is revised to provide 

for rejection of applications that are 

facially incomplete or where the 

applicant fails to meet the requirements 

of the Shipping Act or the Commission’s 

regulations. The application fee is 

returned to the applicant along with a 

statement of reasons for the rejection. 

A new section 515.12(c) establishes a 

process pursuant to which BCL shall 

close applications where applicants fail 

to timely provide information or 

documents needed for review. The date 

for submission of such information will 

be provided by BCL to the applicant. 

The Commission will apply section 

515.12(c) reasonably and flexibly. Once 

the date has been established for a 

response by BCL, the applicant should 

keep BCL fully informed as to the 

reasons for any response delays in order 

to avoid closure of its application. 

Applicants whose applications are 

closed may reapply at any time. 

With the addition of the new content 

inserted in section 515.5(c), the content 

of current section 515.12(c) 

(Investigation) is redesignated as section 

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Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Proposed Rules 61547 

515.12(d). Section 515.12(d) is 

redesignated as 515.12(e) and is revised 

to require that BCL be promptly advised 

only of changes in material facts 

relevant to an application. The 

Commission’s current section 515.12(e) 

is superseded by the electronic filing 

requirement in section 515.5(b). 

Section 515.14—Issuance, Renewal, and 

Use of License 

Section 515.14(c) is new. The 

Commission’s proposes to change 

license and registration renewal periods 

to every three (3) years, rather than two 

years as proposed in the ANPR. If 

adopted, OTI licenses will be issued for 

an initial three year period and renewed 

every three years thereafter. 

Section 515.14(d)(1) is also new and 

requires licensees to renew their 

licenses 60 days prior to the renewal 

date of their license by up-dating an online form with any changes or 

corrections that they find in the 

information displayed on screen. This 

paragraph also provides that a new 

license bear a renewal date on the same 

day and month as the date on which the 

license was originally issued, with the 

renewal day and month remaining the 

same for successive renewals. The 

renewal date remains the same 

regardless of the date a renewal form is 

submitted or the date a renewed license 

is issued. This feature provides ongoing 

certainty to the licensee as to its status. 

The proposed renewal process for 

OTIs is straightforward as their license 

will be issued with renewal dates by 

which renewal must be completed. The 

license renewal requirement is intended 

to ensure that information essential to 

the Commission’s oversight of OTIs is 

verified periodically. Renewal will 

require licensed OTIs to verify on-line 

their QIs’ identification and contact 

information, changes in business or 

organization, trade names, tariff 

publication information, physical 

address, and electronic contact data. 

OTIs would only update information 

that is no longer accurate. 

Renewals by licensees will provide 

the Commission with updated 

information that the Commission 

currently requires in sections 515.12(d) 

and 515.18 (the content of current 

section 515.18 is located in NOPR 

section 515.20). At any given time, BCL 

has 30 to 40 inquiries concerning the 

identity of a licensee’s QI, officers, 

owners, or business affiliations, 

notwithstanding the fact that current 

sections 515.12(d) and 515.18 have long 

required OTIs to inform the Commission 

within 30 days of a change. 

Furthermore, with respect to four 

specific categories of information 

required to be reported under current 

regulations (change of business address, 

retirement or resignation of a QI, failure 

to notify/increase the OTI’s surety bond, 

failure to advise the Commission of 

operation under a new trade name), 

subsequent contacts made by 

Commission staff indicate a failure to 

timely report averaging 14.6–24.4% for 

2012–2013. This experience includes 

NVOCCs and OFFs, both large and 

small. 

The information required by the 

Commission in promulgating the 

current rules is no less necessary today. 

The NOPR renewal process reflects 

approximately 15 years of Commission 

experience and will help ensure that 

necessary information is kept up to date. 

As indicated in § 515.14(d)(3), this 

renewal process will not trigger a 

detailed Commission review or 

consideration of the character and 

eligibility of existing licensed OTIs, 

except, as provided in § 515.14(d)(2), 

when an OTI supplies information that 

requires a separate review or approval 

pursuant to section 515.20. Responsive 

to numerous ANPR comments, the 

Commission intends that the renewal 

process will be entirely on-line and user 

friendly. 

In proposing this change, the 

Commission is mindful that no renewal 

dates are included on the licenses of the 

approximately 4,700 OTIs that are 

currently licensed. Accordingly, a 

process is needed to allow these OTIs to 

renew their licenses without 

unreasonable burden or processing 

delays that may occur if large numbers 

of renewal applications are submitted 

all at once. The Commission seeks 

comments from the public as to the 

process they consider would best 

achieve this goal. For example, would 

email notification by BCL to each such 

licensee of the renewal date assigned by 

BCL enable these OTIs to renew their 

licenses without confusion? 

Section 515.15—Denial of License 

The hearing provisions in section 

515.15(c) are revised to refer to the new 

hearing procedures set forth in section 

515.17. Such hearings are currently 

conducted pursuant to the more 

complex adjudicatory hearing 

procedures in Part 502 of the 

Commission’s regulations. 

Section 515.16—Revocation or 

Suspension of License 

As discussed above with respect to 

section 515.12(a)(1) (notices of the filing 

of license applications), section 

515.16(b) was revised in Docket No. 14– 

08, Procedure for Public Notification of 

Ocean Transportation Intermediary 

Licensing Activity. 79 FR 42986, July 24, 

2014, to authorize notices of revocations 

and suspensions of licenses to be made 

by publication on the Commission’s 

Web site. 

Section 515.17—Hearing Procedures 

Governing: Denial, Revocation, or 

Suspension of OTI Licenses 

The proposal would streamline 

appeal procedures for denial of OTI 

license applications, and for revocation 

or suspension of OTI licenses. 

Currently, such appeals are conducted 

under the Commission’s Rules of 

Practice and Procedure, published at 46 

CFR part 502, and provide for full 

evidentiary hearings, a process that is 

often lengthy and expensive. Rather 

than applying a formal full hearing 

process for such denials, revocations or 

suspensions, this section provides for a 

more efficient process for each type of 

delegated action. 

Section 515.17(a) provides that 

requests for hearing under sections 

515.15 (license denials) and 515.16 

(license revocations and suspensions) 

are to be referred to the Commission’s 

General Counsel, who will designate a 

hearing officer for review and decision. 

BCL will provide to the hearing officer 

a copy of the notice given to the 

applicant or licensee and BCL’s 

materials supporting the notice, upon 

being advised by the hearing officer that 

a hearing request has been made. The 

hearing officer will provide a copy of 

BCL’s material, not otherwise 

privileged, to the requesting party along 

with a notice advising the party of its 

right to submit written argument, 

affidavits of fact, other information, and 

documents within 30 days of the date of 

the notice. BCL will submit its response 

no later than 20 days after the 

submission by the requesting party. 

These records and submissions shall 

constitute the entire record for decision 

upon which the hearing officer’s 

decision will be based. The hearing 

officer’s decision is to be issued within 

40 days of the record being closed. 

After the hearing officer’s decision is 

issued, an OTI may file a petition for 

Commission review of the hearing 

officer’s decision pursuant to 

§ 501.21(f)(1). The section provides for 

Commission review of staff actions, 

such as that of the hearing officer, taken 

under delegated authority. 

Section 515.17(c) has been added to 

clarify that where a revocation, 

termination or suspension also involves 

an enforcement action that, for example, 

involves the assessment of penalties, 

formal proceedings before an 

Administrative Law Judge are still 

required. The Commission’s discovery 

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rules remain available to licensees in 

such instances. 

Section 515.19—Registration of ForeignBased Non-Vessel-Operating Common 

Carriers 

Since the ANPR was issued, the 

Commission revised Part 515, effective 

July 19, 2013, as a necessary element to 

its determination in Docket No. 11–22, 

Non-Vessel-Operating Common Carrier 

Negotiated Rate Arrangements; Tariff 

Publication Exemption, 78 FR 42886, 

July 18, 2013. The Commission added a 

new registration requirement for 

foreign-based unlicensed NVOCCs, the 

content of which is largely identical to 

that contained in ANPR section 515.19. 

Except as addressed below, the 

Commission will retain the adopted text 

of 515.19. 

Existing section 515.19(g)(1) informs 

foreign-based registered NVOCCs of 

grounds upon which the Commission 

may base terminations or suspensions of 

the effectiveness of a registration. 

Proposed section 515.19(g)(2) provides 

that a registrant may request a hearing 

using the same procedures set out in 

§ 515.17 governing hearing requests for 

OTI licensees. 

Section 515.20—Changes in 

Organization 

The content in this section (moved 

from § 515.18) removes, as unneeded, 

the provision that specifically requires 

separately incorporated branch offices 

to obtain their own licenses. All 

separately incorporated entities that 

provide OTI services in their own name 

are required to be licensed, irrespective 

of whether they are related to another 

incorporated OTI. 

Section 515.20(c) will continue to 

provide that OTIs operating as 

partnerships, corporations or LLCs must 

submit a report within 30 business days 

when their QI ceases to serve as a fulltime employee of the OTI. New content 

is added to section 515.20(e) identifying 

changes to a licensee’s organization that 

must also be reported to the 

Commission on an ongoing basis, such 

as changes in business address, criminal 

conviction or indictment of the licensee, 

QI or its officers, and changes of 5 

percent or more in the common equity 

ownership or voting securities of the 

OTI. No fee will be charged for filings 

pursuant to section 515.20(e). 

Subpart C—Financial Responsibility 

Requirements; Claims Against Ocean 

Transportation Intermediaries 

Section 515.23—Claims Against an 

Ocean Transportation Intermediary 

Section 515.23(c) has been modified 

to reflect the Commission’s vote to 

require only financial responsibility 

providers to report the filing notices of 

claims to the Commission. Also, the 

Commission has dropped the ANPR 

requirement that notices of claims be 

published on the Commission’s Web 

site. Section 515.23(c) now provides for 

notices of claims and claim payments to 

be submitted only to the Commission. 

Section 515.25—Filing of Proof of 

Financial Responsibility 

Section 515.25(a)(1) is revised to 

clarify that an application for a license 

will become invalid, and approval 

rescinded, if the required proof of 

financial responsibility is not filed 

within 120 days of notification of 

license approval. The rule provides that 

applicants whose applications have 

become invalid may submit a new Form 

FMC–18, with the required fee, at any 

time. The section also provides that an 

NVOCC’s registration will not be 

effective until the registrant has 

furnished proof of financial 

responsibility, filed a Form FMC–1, and 

published a tariff. 

Section 515.26—Termination of 

Financial Responsibility 

This section is revised to provide that 

registrations may be terminated, as well 

as licenses revoked, without hearing or 

other proceeding in the event that the 

required financial responsibility is 

terminated. 

Section 515.27—Proof of Compliance— 

NVOCC 

Section 515.27(a) has been revised to 

restate the paragraph to make clear that 

no common carrier shall ‘‘knowingly 

and willfully’’ transport cargo for an 

NVOCC unless the common carrier has 

determined that the NVOCC has a 

license or registration, has published a 

tariff, and has provided proof of 

financial responsibility. Section 

515.27(b)(2) has been revised to insert 

the Commission’s web address as a 

location that common carriers can 

consult to verify an NVOCC’s status. 

The Commission is working to ensure 

that common carriers can make the 

required verifications at a single, 

convenient, location on the 

Commission’s Web site. 

Subpart C Appendices 

Appendices A through F are removed 

from their current location between 

section 515.27 and section 515.31, and 

moved to the end of Part 515. The 

Commission believes that moving these 

forms to the end will make use of Part 

515 less cumbersome. 

Subpart D—Duties and Responsibilities 

of Ocean Transportation 

Intermediaries; Reports to Commission 

Section 515.31—General Duties 

Section 515.31 has been revised 

throughout to apply to all OTIs, both 

licensed and registered. Without such a 

change, registrants would not be subject 

to, for example, the section 515.31(f) 

requirement prohibiting preparation of 

claims that the registrant has reason to 

believe are false or fraudulent. 

Section 515.31(g) places an obligation 

on all OTIs to promptly respond to 

requests for all records and books of 

accounts made by authorized 

Commission representatives. In 

addition, section 515.31(g) now clarifies 

that OTI principals are responsible for 

requiring that their agents promptly 

respond to requests directed to such 

agents. 

As a result of the deletion of ANPR 

sections 515.31(j) and (k), ANPR section 

515.31(l) (prohibiting any entity from 

advertising or holding out to provide 

OTI services unless it has a valid OTI 

license or registration) is redesignated as 

section 515.31(j). Proposed section 

515.31(j) is an outgrowth of the 

Commission’s decision in Docket No. 

06–01, Worldwide Relocations, Inc., et 

al.—Possible Violations, 32 SRR 495, 

503 (FMC 2012), in which it analyzed 

factors to be considered when 

determining whether an entity has held 

itself out to the general public to 

provide NVOCC services. In Worldwide 

Relocations, the Commission cited 

Common Carriers by Water—Status of 

Express Companies, Truck Lines and 

Other Non-Vessel Carriers, 1 SRR 292, 

301 (FMC 1961), in which it found that 

persons or entities may hold themselves 

out ‘‘by the establishment and 

maintenance of tariffs, by advertisement 

and solicitation, and otherwise.’’ The 

Commission also cited Activities, Tariff 

Filing Practices and Carrier Status of 

Containerships, Inc., 6 SRR 483, 489 n. 

7 (FMC 1965), noting that the concept 

of holding out includes, among other 

things, advertisement and solicitation. 

Similarly, section 515.31(j) applies to 

OFFs, as they hold out to perform ocean 

freight forwarding services via 

advertising and solicitation. 

Section 515.33—Records Required To 

Be Kept 

The introductory paragraph of Section 

515.33 is revised to clarify that all OTIs 

shall maintain records pertaining to 

their OTI business, and that the records 

must be maintained in useable form and 

readily available to the Commission. 

This records retention requirement 

applies whether the records are kept in 

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the United States or in foreign locations. 

The requirement to keep such records 

solely in the United States is deleted. 

Subpart E—Freight Forwarding Fees 

and Compensation 

Section 515.41—Forwarder and 

Principal; Fees 

The current content of section 

515.41(c) (ocean freight forwarders shall 

not deny equal terms of special 

contracts to similarly situated shippers) 

is deleted. The Commission has 

determined it is no longer needed. 

Section 515.42—Forwarder and Carrier; 

Compensation 

Section 515.42(c) is revised to 

specifically authorize electronic 

certifications by forwarders to carriers 

that forwarding services have been 

provided. Such electronic certifications 

(e.g., an automated forwarder database) 

must identify the shipments for which 

compensation is made and provide for 

the forwarder’s confirmation that the 

services for which forwarder 

compensation is to be paid have been 

provided. This provision will ensure, 

for example, that the forwarder will 

confirm that the carrier’s list of 

shipments is correct, and, if not, the 

forwarder will advise the carrier of 

shipments that should be added or 

deleted. Certifications must be retained 

for a period of 5 years by the common 

carrier. The Commission anticipates that 

such electronic certification will 

facilitate carrier payments through the 

banking system’s automated 

clearinghouse (ACH) payment network, 

a lower cost and more convenient 

procedure for both carrier and 

forwarder. 

Regulatory Flexibility Act—Threshold 

Analysis and Chairman’s Certification 

of No Significant Economic Impact 

When an agency issues a rulemaking 

proposal, the Regulatory Flexibility Act 

(RFA) requires the agency to ‘‘prepare 

and make available for public comment 

an initial regulatory flexibility analysis’’ 

which will ‘‘describe the impact of the 

proposed rule on small entities.’’ 5 

U.S.C. 603(a). Section 605 of the RFA 

allows an agency to certify a rule, in lieu 

of preparing an analysis, if the proposed 

rulemaking is not expected to have a 

significant economic impact on a 

substantial number of small entities. 

This proposed rule directly affects all 

U.S. licensed OTIs, of which there are 

currently 4,648. The FMC estimates that 

approximately 97 percent of these OTIs 

are small entities. Therefore, the 

Commission has determined that this 

proposed rule will have an impact on a 

substantial number of small entities. 

However, the Commission has 

determined that the impact on entities 

affected by the proposed rule will not be 

significant. Most of the proposed 

changes have been found to have either 

no economic impact or beneficial 

economic impacts. Concerning the one 

change with the potential to generate 

economic disbenefit, i.e., the license 

renewal requirement, the dollar 

magnitude of the economic impact has 

been estimated to be less than one-tenth 

of one percent of average annual 

revenue for even the smallest entities. 

Accordingly, the Chairman of the 

Federal Maritime Commission hereby 

certifies that this rule will not have a 

significant economic impact on a 

substantial number of small entities. 

The Commission invites comment from 

members of the public who believe the 

rule will have a significant economic 

impact on the U.S.-based OTIs. 

This rule is not a ‘‘major rule’’ under 

5 U.S.C. 804(2). 

List of Subjects in 46 CFR Part 515 

Freight, Freight forwarders, Maritime 

carriers, Reporting and recordkeeping 

requirements. 

For the reasons stated in the 

supplementary information, the Federal 

Maritime Commission proposes to 

amend 46 CFR Part 515 as follows: 

PART 515—LICENSING, FINANCIAL 

RESPONSIBILITY REQUIREMENTS, 

AND GENERAL DUTIES FOR OCEAN 

TRANSPORTATION INTERMEDIARIES 

■ 1. The authority citation for part 515 

continues to read as follows: 

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

46 U.S.C. 305, 40102, 40104, 40501–40503, 

40901–40904, 41101–41109, 41301–41302, 

41305–41307; Pub. L. 105–383, 112 Stat. 

3411; 21 U.S.C. 862. 

Subpart A—General 

■ 2–3. In § 515.1, revise paragraph (b) to 

read as follows: 

§ 515.1 Scope. 

* * * * * 

(b) Information obtained under this 

part is used to determine the 

qualifications of ocean transportation 

intermediaries and their compliance 

with shipping statutes and regulations. 

Failure to follow the provisions of this 

part may result in denial, revocation or 

suspension of an ocean transportation 

intermediary license or registration. 

Persons operating without the proper 

license or registration may be subject to 

civil penalties not to exceed $9,000 for 

each such violation, unless the violation 

is willfully and knowingly committed, 

in which case the amount of the civil 

penalty may not exceed $45,000 for 

each violation; for other violations of 

the provisions of this part, the civil 

penalties range from $9,000 to $45,000 

for each violation (46 U.S.C. 41107– 

41109). Each day of a continuing 

violation shall constitute a separate 

violation. 

■ 4. Revise § 515.2 to read as follows: 

§ 515.2 Definitions. 

The terms used in this part are 

defined as follows: 

(a) Act or Shipping Act means the 

Shipping Act of 1984, as amended. 46 

U.S.C. 40101–41309. 

(b) Beneficial interest includes a lien 

or interest in or right to use, enjoy, 

profit, benefit, or receive any advantage, 

either proprietary or financial, from the 

whole or any part of a shipment of cargo 

where such interest arises from the 

financing of the shipment or by 

operation of law, or by agreement, 

express or implied. The term ‘‘beneficial 

interest’’ shall not include any 

obligation in favor of an ocean 

transportation intermediary arising 

solely by reason of the advance of outof-pocket expenses incurred in 

dispatching a shipment. 

(c) Branch office means any office in 

the United States established by or 

maintained by or under the control of a 

licensee for the purpose of rendering 

intermediary services, which office is 

located at an address different from that 

of the licensee’s designated home office. 

(d) Commission means the Federal 

Maritime Commission. 

(e) Common carrier means any 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: 

(1) Assumes responsibility for the 

transportation from the port or point of 

receipt to the port or point of 

destination, and 

(2) 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, except that the term 

does not include a common carrier 

engaged in ocean transportation by ferry 

boat, ocean tramp, chemical parcel 

tanker, or by a vessel when primarily 

engaged in the carriage of perishable 

agricultural commodities: 

(i) If the common carrier and the 

owner of those commodities are whollyowned, directly or indirectly, by a 

person primarily engaged in the 

marketing and distribution of those 

commodities, and 

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(ii) Only with respect to those 

commodities. 

(f) Compensation means payment by 

a common carrier to a freight forwarder 

for the performance of services as 

specified in § 515.2(h). 

(g) Freight forwarding fee means 

charges billed by an ocean freight 

forwarder to a shipper, consignee, seller, 

purchaser, or any agent thereof, for the 

performance of freight forwarding 

services. 

(h) Freight forwarding services refers 

to the dispatching of shipments on 

behalf of others, in order to facilitate 

shipment by a common carrier, which 

may include, but are not limited to, the 

following: 

(1) Ordering cargo to port; 

(2) Preparing and/or processing export 

documents, including the required 

‘electronic export information’; 

(3) Booking, arranging for or 

confirming cargo space; 

(4) Preparing or processing delivery 

orders or dock receipts; 

(5) Preparing and/or processing 

common carrier bills of lading or other 

shipping documents; 

(6) Preparing or processing consular 

documents or arranging for their 

certification; 

(7) Arranging for warehouse storage; 

(8) Arranging for cargo insurance; 

(9) Assisting with clearing shipments 

in accordance with United States 

Government export regulations; 

(10) Preparing and/or sending 

advance notifications of shipments or 

other documents to banks, shippers, or 

consignees, as required; 

(11) Handling freight or other monies 

advanced by shippers, or remitting or 

advancing freight or other monies or 

credit in connection with the 

dispatching of shipments; 

(12) Coordinating the movement of 

shipments from origin to vessel; and 

(13) Giving expert advice to exporters 

concerning letters of credit, other 

documents, licenses or inspections, or 

on problems germane to the cargoes’ 

dispatch. 

(i) From the United States means 

oceanborne export commerce from the 

United States, its territories, or 

possessions, to foreign countries. 

(j) Licensee is any person licensed by 

the Federal Maritime Commission as an 

ocean transportation intermediary. 

(k) Non-vessel-operating common 

carrier services refers to the provision of 

transportation by water of cargo 

between the United States and a foreign 

country for compensation without 

operating the vessels by which the 

transportation is provided, and may 

include, but are not limited to, the 

following: 

(1) Purchasing transportation services 

from a common carrier and offering 

such services for resale to other persons; 

(2) Payment of port-to-port or 

multimodal transportation charges; 

(3) Entering into affreightment 

agreements with underlying shippers; 

(4) Issuing bills of lading or other 

shipping documents; 

(5) Assisting with clearing shipments 

in accordance with U.S. government 

regulations; 

(6) Arranging for inland 

transportation and paying for inland 

freight charges on through 

transportation movements; 

(7) Paying lawful compensation to 

ocean freight forwarders; 

(8) Coordinating the movement of 

shipments between origin or destination 

and vessel; 

(9) Leasing containers; 

(10) Entering into arrangements with 

origin or destination agents; 

(11) Collecting freight monies from 

shippers and paying common carriers as 

a shipper on NVOCC’s own behalf. 

(l) 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. 

(m) Ocean transportation 

intermediary (OTI) means an ocean 

freight forwarder or a non-vesseloperating common carrier. For the 

purposes of this part, the term 

(1) Ocean freight forwarder (OFF) 

means a person that— 

(i) In the United States, dispatches 

shipments from the United States via a 

common carrier and books or otherwise 

arranges space for those shipments on 

behalf of shippers; and 

(ii) Processes the documentation or 

performs related activities incident to 

those shipments; and 

(2) Non-vessel-operating common 

carrier (NVOCC) means a common 

carrier that does not operate the vessels 

by which the ocean transportation is 

provided, and is a shipper in its 

relationship with an ocean common 

carrier. 

(n) Person means individuals, 

corporations, companies, including 

limited liability companies, 

associations, firms, partnerships, 

societies and joint stock companies 

existing under or authorized by the laws 

of the United States or of a foreign 

country. 

(o) Principal, with respect to a 

licensed ocean freight forwarder 

employed to facilitate ocean 

transportation of property, refers to the 

shipper, consignee, seller or purchaser 

of such property, and to anyone acting 

on behalf of such shipper, consignee, 

seller or purchaser. 

(p) Qualifying individual (QI) means 

an individual who meets the experience 

and character requirements of section 19 

of the Shipping Act (46 U.S.C. 40901– 

40904) and this part. 

(q) Reduced forwarding fees means 

charges to a principal for forwarding 

services that are below the licensed 

ocean freight forwarder’s usual charges 

for such services. 

(r) Registered non-vessel-operating 

common carrier (registered NVOCC) 

means an NVOCC whose primary place 

of business is located outside the United 

States and who elects not to become 

licensed as an NVOCC, but to register 

with the Commission as provided in 

§ 515.19, post a bond or other surety in 

the required amount, and publish a 

tariff as required by 46 CFR part 520. 

(s) Shipment means all of the cargo 

carried under the terms of a single bill 

of lading. 

(t) Shipper means: 

(1) A cargo owner; 

(2) The person for whose account the 

ocean transportation is provided; 

(3) The person to whom delivery is to 

be made; 

(4) A shippers’ association; or 

(5) A non-vessel-operating common 

carrier that accepts responsibility for 

payment of all charges applicable under 

the tariff or service contract. 

(u) Special contract is a contract for 

ocean freight forwarding services which 

provides for a periodic lump sum fee. 

(v) Transportation-related activities 

which are covered by the financial 

responsibility obtained pursuant to this 

part include, to the extent involved in 

the foreign commerce of the United 

States, any activity performed by an 

ocean transportation intermediary that 

is necessary or customary in the 

provision of transportation services to a 

customer, but are not limited to the 

following: 

(1) For an ocean transportation 

intermediary operating as an ocean 

freight forwarder, the freight forwarding 

services enumerated in § 515.2(h), and 

(2) For an ocean transportation 

intermediary operating as a non-vesseloperating common carrier, the nonvessel-operating common carrier 

services enumerated in § 515.2(k). 

(w) United States includes the several 

States, the District of Columbia, the 

Commonwealth of Puerto Rico, the 

Commonwealth of the Northern 

Marianas, and all other United States 

territories and possessions. 

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■ 5. Revise § 515.3 to read as follows: 

§ 515.3 License; when required. 

Except as otherwise provided in this 

part, no person in the United States may 

act as an ocean transportation 

intermediary unless that person holds a 

valid license issued by the Commission. 

For purposes of this part, a person is 

considered to be ‘‘in the United States’’ 

if such person is resident in, or 

incorporated or established under, the 

laws of the United States. Registered 

NVOCCs must utilize only licensed 

ocean transportation intermediaries to 

provide NVOCC services in the United 

States. In the United States, only 

licensed OTIs may act as agents to 

provide OTI services for registered 

NVOCCs. 

■ 6. Revise § 515.4 to read as follows: 

§ 515.4 License; when not required. 

A license is not required in the 

following circumstances: 

(a) Shippers. Any person whose 

primary business is the sale of 

merchandise may, without a license, 

dispatch and perform freight forwarding 

services on behalf of its own shipments, 

or on behalf of shipments or 

consolidated shipments of a parent, 

subsidiary, affiliate, or associated 

company. Such person shall not receive 

compensation from the common carrier 

for any services rendered in connection 

with such shipments. 

(b) Agents, employees, or branch 

offices of a licensed ocean 

transportation intermediary. An agent, 

individual employee, or branch office of 

a licensed ocean transportation 

intermediary is not required to be 

licensed in order to act on behalf of and 

in the name of such licensee; however, 

branch offices must be reported to the 

Commission in Form FMC–18 or 

pursuant to § 515.20(e). A licensed 

ocean transportation intermediary shall 

be fully responsible for the acts and 

omissions of any of its employees and 

agents that are performed in connection 

with the conduct of such licensee’s 

business. 

(c) Common carriers. A common 

carrier, or agent thereof, may perform 

ocean freight forwarding services 

without a license only with respect to 

cargo carried under such carrier’s own 

bill of lading. Charges for such 

forwarding services shall be assessed in 

conformance with the carrier’s 

published tariffs. 

(d) Federal military and civilian 

household goods. Any person which 

exclusively transports used household 

goods and personal effects for the 

account of the Department of Defense, 

or for the account of the federal civilian 

executive agencies shipping under the 

International Household Goods Program 

administered by the General Services 

Administration, or both, is not subject to 

the requirements of subpart B of this 

part, but may be subject to other 

requirements, such as alternative surety 

bonding, imposed by the Department of 

Defense, or the General Services 

Administration. 

■ 7. Revise § 515.5 to read as follows: 

§ 515.5 Forms and fees. 

(a) Forms. License Application Form 

FMC–18 Rev., Application for Renewal 

of Ocean Transportation Intermediary 

License Form-___, and Foreign-based 

Unlicensed NVOCC Registration/

Renewal Form FMC–65, are found at the 

Commission’s Web site www.fmc.gov for 

completion on-line by applicants, 

licensees, and registrants. Financial 

responsibility Forms FMC–48, FMC–67, 

FMC–68, FMC–69 may be obtained from 

the Commission’s Web site at 

www.fmc.gov, from the Director, Bureau 

of Certification and Licensing, Federal 

Maritime Commission, Washington, DC 

20573, or from any of the Commission’s 

Area Representatives. 

(b) Filing of license applications and 

registration forms. All applications and 

forms are to be filed electronically 

unless a waiver is granted to file in 

paper form. A waiver request must be 

submitted in writing to the Director, 

Bureau of Certification and Licensing, 

800 North Capitol Street NW., 

Washington, DC 20573, and must 

demonstrate that electronic filing 

imposes an undue burden on the 

applicant or registrant. The director, or 

a designee, will render a decision on the 

request and notify the requestor within 

two (2) business days of receiving the 

request. If a waiver request is granted, 

the approval will provide instructions 

for submitting a paper application or 

registration. If the waiver request is 

denied, a statement of reasons for the 

denial will be provided. 

(c) Fees. (1) All fees shall be paid by: 

(i) Money order, certified, cashier’s, or 

personal check payable to the order of 

the ‘‘Federal Maritime Commission;’’ 

(ii) Pay.gov; 

(iii) The Automated Clearing House 

system; or 

(iv) By other means authorized by the 

Director of the Commission’s Office of 

Budget and Finance. 

(2) Applications or registrations shall 

be rejected unless the applicable fee and 

any bank charges assessed against the 

Commission are received by the 

Commission within ten (10) business 

days after submission of the application 

or registration. In any instance where an 

application has been processed in whole 

or in part, the fee will not be refunded. 

(3) Fees under this part 515 shall be 

as follows: 

(i) Application for new OTI license as 

required by § 515.12(a): automated filing 

$250; paper filing pursuant to waiver 

$825. 

(ii) Application for change to OTI 

license or license transfer as required by 

§ 515.20(a) and (b): automated filing 

$125; paper filing pursuant to waiver 

$525. 

(iii) A copy of the Regulated Persons 

Index may be purchased for $108 as 

provided in § 515.34. 

■ 8. Amend the heading for subpart B by 

adding at the end ‘‘and Registration’’ to 

read as follows: 

Subpart B—Eligibility and Procedure 

for Licensing and Registration 

■ 9. Revise § 515.11 to read as follows: 

§ 515.11 Basic requirements for licensing; 

eligibility. 

(a) Necessary qualifications. To be 

eligible for an ocean transportation 

intermediary license, the applicant must 

demonstrate to the Commission that: 

(1) It possesses the necessary 

experience, that is, its qualifying 

individual has a minimum of three (3) 

years experience in ocean transportation 

intermediary activities in the United 

States, and the necessary character to 

render ocean transportation 

intermediary services. A foreign NVOCC 

seeking to be licensed under this part 

must demonstrate that its qualifying 

individual has a minimum 3 years’ 

experience in ocean transportation 

intermediary activities, and the 

necessary character to render ocean 

transportation intermediary services. 

The required OTI experience of the QI 

of a foreign based NVOCC seeking to 

become licensed under this part 

(foreign-based licensed NVOCC) may be 

experience acquired in the U.S. or a 

foreign country with respect to 

shipments in the United States 

oceanborne foreign commerce. 

(2) In addition to information 

provided by the applicant and its 

references, the Commission may 

consider all information relevant to 

determining whether an applicant has 

the necessary character to render ocean 

transportation intermediary services, 

including but not limited to, 

information regarding: violations of any 

shipping laws, or statutes relating to the 

import, export, or transport of 

merchandise in international trade; 

operating as an OTI without a license or 

registration; state and federal felonies 

and misdemeanors; voluntary and nonvoluntary bankruptcies not discharged; 

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tax liens and other court and 

administrative judgments and 

proceedings; compliance with 

immigration status requirements 

described in 49 CFR 1572.105; denial, 

revocation, or suspension of a 

Transportation Worker Identification 

Credential under 49 CFR 1572; and the 

denial, revocation, or suspension of a 

customs broker’s license under 19 CFR 

Subpart B, section 111. The required 

OTI experience of the QI of a foreignbased NVOCC seeking to become 

licensed under this part (foreign-based 

licensed NVOCC) may be experience 

acquired in the U.S. or a foreign country 

with respect to shipments in the United 

States oceanborne foreign commerce. 

(b) Qualifying individual. The 

following individuals must qualify the 

applicant for a license: 

(1) Sole proprietorship. The applicant 

sole proprietor. 

(2) Partnership. At least one of the 

active managing partners. 

(3) Corporation. At least one of the 

active corporate officers 

(4) Limited liability company. One of 

the members or managers, or an 

individual in an equivalent position in 

the LLC as expressly set forth in the LLC 

operating agreement. 

(c) Affiliates of intermediaries. An 

independently qualified applicant may 

be granted a separate license to carry on 

the business of providing ocean 

transportation intermediary services 

even though it is associated with, under 

common control with, or otherwise 

related to another ocean transportation 

intermediary through stock ownership 

or common directors or officers, if such 

applicant submits: a separate 

application and fee, and a valid 

instrument of financial responsibility in 

the form and amount prescribed under 

§ 515.21. The qualifying individual of 

one active licensee shall not also be 

designated as the qualifying individual 

of an applicant for another ocean 

transportation intermediary license, 

unless both entities are commonly 

owned or where one directly controls 

the other. 

(d) Common carrier. A common 

carrier or agent thereof which meets the 

requirements of this part may be 

licensed as an ocean freight forwarder to 

dispatch shipments moving on other 

than such carrier’s own bills of lading 

subject to the provisions of § 515.42(g). 

(e) Foreign-based licensed NVOCC. A 

foreign-based NVOCC that elects to 

obtain a license must establish a 

presence in the United States by 

opening an unincorporated office that is 

resident in the United States and is 

qualified to do business where it is 

located. 

■ 10. Revise § 515.12 to read as follows: 

§ 515.12 Application for license. 

(a) Application and forms. (1) Any 

person who wishes to obtain a license 

to operate as an ocean transportation 

intermediary shall submit electronically 

(absent a waiver pursuant to § 515.5(b)) 

a completed application Form FMC–18 

Rev. (Application for a License as an 

Ocean Transportation Intermediary) in 

accordance with the automated FMC–18 

filing system and corresponding 

instructions. A filing fee shall be paid, 

as required under § 515.5(c). Notice of 

filing of each application shall be 

published on the Commission’s Web 

site www.fmc.gov and shall state the 

name and address of the applicant and 

the name and address of the QI. If the 

applicant is a corporation or 

partnership, the names of the officers or 

partners thereof may be published. For 

an LLC, the names of the managers, 

members or officers, as applicable, may 

be published. 

(2) An individual who is applying for 

a license as a sole proprietor must 

complete the following certification: 

I, lll, certify under penalty of perjury 

under the laws of the United States, that I 

have not been convicted, after September 1, 

1989, of any Federal or state offense 

involving the distribution or possession of a 

controlled substance, or that if I have been 

so convicted, I am not ineligible to receive 

Federal benefits, either by court order or 

operation of law, pursuant to 21 U.S.C. 862. 

(b) Rejection. Any application which 

appears upon its face to be incomplete 

or to indicate that the applicant fails to 

meet the licensing requirements of the 

Act, or the Commission’s regulations, 

may be rejected and a notice shall be 

sent to the applicant, together with an 

explanation of the reasons for rejection, 

and the filing fee shall be refunded in 

full. Persons who have had their 

applications rejected may submit a new 

Form FMC–18 at any time, together with 

the required filing fee. 

(c) Failure to provide necessary 

information and documents. In the 

event an applicant fails to provide 

documents or information necessary to 

complete processing of its application, 

notice will be sent to the applicant 

identifying the necessary information 

and documents and establishing a date 

for submission by the applicant. Failure 

of the applicant to submit the identified 

materials by the established date will 

result in the closing of its application 

without further processing. In the event 

an application is closed as a result of the 

applicant’s failure to provide 

information or documents necessary to 

complete processing, the filing fee will 

not be returned. Persons who have had 

their applications closed under this 

section may reapply at any time by 

submitting a new application with the 

required filing fee. 

(d) Investigation. Each applicant shall 

be investigated in accordance with 

§ 515.13. 

(e) Changes in fact. Each applicant 

shall promptly advise the Commission 

of any material changes in the facts 

submitted in the application. Any 

unreported change may delay the 

processing and investigation of the 

application and result in rejection, 

closing, or denial of the application. 

■ 11. In § 515.14, revise the section 

heading and paragraph (b) and add 

paragraphs (c) and (d) to read as follows: 

§ 515.14 Issuance, renewal, and use of 

license. 

* * * * * 

(b) To whom issued. The Commission 

will issue a license only in the name of 

the applicant, whether the applicant is 

a sole proprietorship, a partnership, a 

corporation, or limited liability 

company. A license issued to a sole 

proprietor doing business under a trade 

name shall be in the name of the sole 

proprietor, indicating the trade name 

under which the licensee will be 

conducting business. Only one license 

shall be issued to any applicant 

regardless of the number of names 

under which such applicant may be 

doing business, and except as otherwise 

provided in this part, such license is 

limited exclusively to use by the named 

licensee and shall not be transferred 

without prior Commission approval to 

another person. 

(c) Licenses shall be issued for an 

initial period of three (3) years. 

Thereafter, licenses will be renewed for 

sequential three year periods upon 

successful completion of the renewal 

process in paragraph (d) of this section. 

(d) License renewal process. (1) The 

licensee shall submit electronically to 

the Director of the Bureau of 

Certification and Licensing (BCL) a 

completed Form FMC–___ (Application 

for Renewal of Ocean Transportation 

Intermediary License) no later than sixty 

(60) days prior to the renewal date set 

forth on its license. Upon successful 

completion of the renewal process, the 

Commission shall issue a new license 

bearing a renewal date three (3) years 

later on the same day and month on 

which the license was originally issued. 

The renewal date will remain the same 

for subsequent renewals irrespective of 

the date on which the license renewal 

is submitted or when the renewed 

license is issued by the Commission, 

unless another renewal date is assigned 

by the Commission. 

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(2) Where information provided in an 

OTI’s renewal form, Form FMC–ll, is 

changed from that set out in its current 

Form FMC–18 and requires Commission 

approval pursuant to § 515.20, the 

licensee must promptly submit a request 

for such approval on Form FMC–18 

together with the required filing fee. The 

licensee may continue to operate as an 

ocean transportation intermediary 

during the pendency of the 

Commission’s approval process. 

(3) Though the foregoing license 

renewal process is not intended to result 

in a re-evaluation of a licensee’s 

character, the Commission may review 

a licensee’s character at any time, 

including at the time of renewal, based 

upon information received from the 

licensee or other sources. 

■ 12. In § 515.15, revise paragraph (c) to 

read as follows: 

§ 515.15 Denial of license. 

* * * * * 

(c) Has made any materially false or 

misleading statement to the Commission 

in connection with its application; then, 

a notice of intent to deny the 

application shall be sent to the 

applicant stating the reason(s) why the 

Commission intends to deny the 

application. The notice of intent to deny 

the application will provide, in detail, a 

statement of the facts supporting denial. 

An applicant may request a hearing on 

the proposed denial by submitting to the 

Secretary, Federal Maritime 

Commission, Washington, DC 20573, 

within twenty (20) days of the date of 

the notice, a statement of reasons why 

the application should not be denied. 

Such hearing shall be provided 

pursuant to the procedures contained in 

§ 515.17. Otherwise, the denial of the 

application will become effective and 

the applicant shall be so notified. 

■ 13. Revise § 515.16 to read as follows: 

§ 515.16 Revocation or suspension of 

license. 

(a) Grounds. Except for the automatic 

revocation for termination of proof of 

financial responsibility under § 515.26, 

a license may be revoked or suspended 

after notice and an opportunity for a 

hearing under the procedures of 

§ 515.17. 

The notice of revocation or 

suspension will provide, in detail, a 

statement of the facts supporting the 

action. The licensee may request a 

hearing on the proposed revocation or 

suspension by submitting to the 

Commission’s Secretary, within twenty 

(20) days of the date of the notice, a 

statement of reasons why the license 

should not be revoked or suspended. 

Such hearing shall be provided 

pursuant to the procedures contained in 

§ 515.17. Otherwise, the action 

regarding the license will become 

effective. A license may be revoked or 

suspended for any of the following 

reasons: 

(1) Violation of any provision of the 

Act, or any other statute or Commission 

order or regulation related to carrying 

on the business of an ocean 

transportation intermediary; 

(2) Failure to respond to any lawful 

order or inquiry by the Commission; 

(3) Making a materially false or 

misleading statement to the Commission 

in connection with an application for a 

license or an amendment to an existing 

license; 

(4) A Commission determination that 

the licensee is not qualified to render 

intermediary services; or 

(5) Failure to honor the licensee’s 

financial obligations to the Commission. 

(b) Notice. The Commission shall 

publish on the Commission’s Web site 

www.fmc.gov notice of each revocation 

and suspension. 

§ 515.18 [Redesignated as § 515.20]. 

■ 14. Redesignate § 515.18 as § 515.20. 

§ 515.17 [Redesignated as § 515.18]. 

■ 15. Redesignate § 515.17 as § 515.18. 

■ 16. Add new § 515.17 to read as 

follows: 

§ 515.17 Hearing procedures governing 

denial, revocation, or suspension of OTI 

license. 

(a) Hearing requests. All hearing 

requests under §§ 515.15 and 515.16 

shall be submitted to the Commission’s 

Secretary. Such requests shall be 

referred to the General Counsel to 

designate a hearing officer for review 

and decision under the procedures 

established in this section. Upon receipt 

of a request for hearing, the hearing 

officer shall notify BCL, and BCL will 

provide to the hearing officer a copy of 

the notice given to the applicant or 

licensee and a copy of BCL materials 

supporting the notice. The hearing 

officer will then issue a notice advising 

the applicant or, in the case of a 

revocation or suspension of the license, 

the licensee of the right to submit 

information and documents, including 

affidavits of fact and written argument, 

in support of an OTI application or 

continuation of a current OTI license. 

(b) Notice. The notice shall establish 

a date no later than thirty (30) days from 

the date of the notice for submission of 

all supporting materials by the applicant 

or licensee. The notice shall also 

provide that the BCL may submit 

responsive materials no later than 

twenty (20) days from the date the 

applicant or licensee submitted its 

materials. BCL’s notice and materials 

supporting its notice, the submission of 

the applicant or licensee, and the 

responsive submission of BCL shall 

constitute the entire record upon which 

the hearing officer’s decision shall be 

based. The hearing officer’s decision 

shall be issued within forty (40) days 

after the closing of the record. 

(c) Commission-initiated enforcement 

proceedings. In proceedings for 

assessment of civil penalties for 

violations of the Shipping Act or 

Commission regulations, a license may 

be revoked or suspended after notice 

and an opportunity for hearing under 

Part 502 (Rules of Practice and 

Procedure). 

■ 17. In § 515.19, add paragraph (g)(2) to 

read as follows: 

§ 515.19 Registration of foreign-based 

non-vessel-operating common carriers. 

(g) * * * 

(2) Hearing procedure. Registrants 

may request a hearing for terminations 

or suspensions of the effectiveness of 

their registrations following the same 

procedures set forth in § 515.17 

(governing hearing requests for denials, 

revocations and suspensions of 

licenses). 

* * * * * 

■ 18. Revise newly redesignated 

§ 515.20 to read as follows: 

§ 515.20 Changes in organization. 

(a) Licenses. The following changes in 

an existing licensee’s organization 

require prior approval of the 

Commission, and application for such 

status change or license transfer shall be 

made on Form FMC–18, filed with the 

Commission’s Bureau of Certification 

and Licensing, and accompanied by the 

fee required under § 515.5(c): 

(1) Transfer of a corporate license to 

another person; 

(2) Change in ownership of a sole 

proprietorship; 

(3) Any change in the business 

structure of a licensee from or to a sole 

proprietorship, partnership, limited 

liability company, or corporation, 

whether or not such change involves a 

change in ownership; 

(4) Any change in a licensee’s name; 

or 

(5) Change in the identity or status of 

the designated QI, except as described 

in paragraphs (b) and (c) of this section. 

(b) Operation after death of sole 

proprietor. In the event that the owner 

of a licensed sole proprietorship dies, 

the licensee’s executor, administrator, 

heir(s), or assign(s) may continue 

operation of such proprietorship solely 

with respect to shipments for which the 

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deceased sole proprietor had 

undertaken to act as an ocean 

transportation intermediary pursuant to 

the existing license, if the death is 

reported within 30 days to the 

Commission and to all principals and 

shippers for whom services on such 

shipments are to be rendered. The 

acceptance or solicitation of any other 

shipments is expressly prohibited until 

a new license has been issued. 

Applications for a new license by the 

executor, administrator, heir(s), or 

assign(s) shall be made on Form FMC– 

18, and shall be accompanied by the fee 

required under § 515.5(c). 

(c) Operation after retirement, 

resignation, or death of QI. When a 

partnership, LLC, or corporation has 

been licensed on the basis of the 

qualifications of one or more of the 

partners, members, managers or officers 

thereof, and the QI no longer serves as 

a full-time employee with the OTI or, is 

no longer responsible for the licensee’s 

OTI activities, the licensee shall report 

such change to the Commission within 

thirty (30) business days. Within the 

same 30-day period, the licensee shall 

furnish to the Commission the name(s) 

and detailed intermediary experience of 

any other active partner(s), member(s), 

manager(s) or officer(s) who may qualify 

the licensee. Such QI(s) must meet the 

applicable requirements set forth in 

§ 515.11(a) through (c). The licensee 

may continue to operate as an ocean 

transportation intermediary while the 

Commission investigates the 

qualifications of the newly designated 

partner, member, manager, or officer. 

(d) Acquisition of one or more 

additional licensees. In the event a 

licensee acquires one or more additional 

licensees, for the purpose of merger, 

consolidation, or control, the acquiring 

licensee shall advise the Commission of 

such acquisition, including any change 

in ownership, within 30 days after such 

change occurs by submitting an 

amended Form FMC–18. No application 

fee is required when reporting this 

change. 

(e) Other changes. Other changes in 

material fact of a licensee shall be 

reported within thirty (30) days of such 

changes, in writing by mail or email 

(bcl@fmc.gov) to the Director, Bureau of 

Certification and Licensing, Federal 

Maritime Commission, Washington, DC. 

20573. Material changes include, but are 

not limited to: changes in business 

address; any criminal indictment or 

conviction of a licensee, QI, or officer; 

any voluntary or involuntary 

bankruptcy filed by or naming a 

licensee, QI, or officer; changes of five 

(5) percent or more of the common 

equity ownership or voting securities of 

the OTI; or, the addition or reduction of 

one or more partners of a licensed 

partnership, one or more members or 

managers of a Limited Liability 

Company, or one or more branch offices. 

No fee shall be charged for reporting 

such changes. 

Subpart C—Financial Responsibility 

Requirements; Claims Against Ocean 

Transportation Intermediaries 

■ 19. In § 515.21, revise paragraphs 

(a)(1) through (3), remove paragraph 

(a)(4), and revise paragraph (b) to read 

as follows: 

§ 515.21 Financial responsibility 

requirements. 

(a) * * * 

(1) Any person operating in the 

United States as an ocean freight 

forwarder as defined in § 515.2(m)(1) 

shall furnish evidence of financial 

responsibility in the amount of $50,000. 

(2) Any person operating in the 

United States as an NVOCC as defined 

in § 515.2(m)(2) shall furnish evidence 

of financial responsibility in the amount 

of $75,000. 

(3) Any registered NVOCC, as defined 

in § 515.2(r), shall furnish evidence of 

financial responsibility in the amount of 

$150,000. Such registered NVOCC shall 

be strictly responsible for the acts and 

omissions of its employees and agents, 

wherever they are located. 

(b) Group financial responsibility. 

When a group or association of ocean 

transportation intermediaries accepts 

liability for an ocean transportation 

intermediary’s financial responsibility 

for such ocean transportation 

intermediary’s transportation-related 

activities under the Act, the group or 

association of ocean transportation 

intermediaries shall file a group bond 

form, insurance form or guaranty form, 

clearly identifying each ocean 

transportation intermediary covered, 

before a covered ocean transportation 

intermediary may provide ocean 

transportation intermediary services. In 

such cases, a group or association must 

establish financial responsibility in an 

amount equal to the lesser of the 

amount required by paragraph (a) of this 

section for each member, or $3,000,000 

in aggregate. A group or association of 

ocean transportation intermediaries may 

also file an optional bond rider as 

provided in § 515.25(b). 

* * * * * 

■ 20. Revise § 515.23 to read as follows: 

§ 515.23 Claims against an ocean 

transportation intermediary. 

(a) Payments. Shippers, common 

carriers, and other affected persons may 

seek payment from the bond, insurance, 

or other surety maintained by an ocean 

transportation intermediary for damages 

arising out of its ocean transportationrelated activities. The Commission may 

also seek payment of civil penalties 

assessed under section 13 of the 

Shipping Act (46 U.S.C. 41107–41109). 

(b) Payment pursuant to a claim. (1) 

If a person does not file a complaint 

with the Commission pursuant to 

section 11 of the Shipping Act (46 

U.S.C. 41301–41302, 41305–41307(a)), 

but otherwise seeks to pursue a claim 

against an ocean transportation 

intermediary bond, insurance, or other 

surety for damages arising from its 

transportation-related activities, it shall 

attempt to resolve its claim with the 

financial responsibility provider prior to 

seeking payment on any judgment for 

damages obtained. When a claimant 

seeks payment under this section, it 

simultaneously shall notify both the 

financial responsibility provider and the 

ocean transportation intermediary of the 

claim by mail or courier service. The 

bond, insurance, or other surety may be 

available to pay such claim if: 

(i) The ocean transportation 

intermediary consents to payment, 

subject to review by the financial 

responsibility provider; or 

(ii) The ocean transportation 

intermediary fails to respond within 

forty-five (45) days from the date of the 

notice of the claim to address the 

validity of the claim, and the financial 

responsibility provider deems the claim 

valid. 

(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 

reparations ordered by the Commission 

or damages obtained from an 

appropriate court. The financial 

responsibility provider shall pay such 

judgment for damages only to the extent 

they arise from the transportationrelated activities of the ocean 

transportation intermediary, ordinarily 

within thirty (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. 

(c) Notices of court and other claims 

against OTIs by financial responsibility 

providers. (1) As provided in each 

financial responsibility instrument 

between an OTI and its financial 

responsibility provider(s), the issuing 

financial responsibility provider shall 

submit a notice to the Commission of 

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each claim, court action, or court 

judgment against the financial 

responsibility and each claim paid 

(including the amount) by the provider. 

(2) Notices described in paragraph (1) 

of this section shall be promptly 

submitted in writing by mail or email 

(bcl@fmc.gov) to the Director, Bureau of 

Certification and Licensing, Federal 

Maritime Commission, Washington, DC 

20573. 

(3) Notices required by this section 

shall include the name of the claimant, 

name of the court and case number 

assigned, and the name and license 

number of the OTI involved. Such 

notices may include or attach other 

information relevant to the claim. 

(d) FMC not a depository. The Federal 

Maritime Commission shall not serve as 

depository or distributor to third parties 

of bond, guaranty, or insurance funds in 

the event of any claim, judgment, or 

order for reparation. 

(e) Optional bond riders. The Federal 

Maritime Commission shall not serve as 

a depository or distributor to third 

parties of funds payable pursuant to 

optional bond riders described in 

§ 515.25(b). 

■ 21. Revise § 515.25 to read as follows: 

§ 515.25 Filing of proof of financial 

responsibility. 

(a) Filing of proof of financial 

responsibility—(1) Licenses. Upon 

notification by the Commission that an 

applicant has been approved for 

licensing, the applicant shall file with 

the Director of the Commission’s Bureau 

of Certification and Licensing, proof of 

financial responsibility in the form and 

amount prescribed in § 515.21. No 

license will be issued until the 

Commission is in receipt of valid proof 

of financial responsibility from the 

applicant. If, within 120 days of 

notification of approval for licensing by 

the Commission, the applicant does not 

file proof that its financial responsibility 

is in effect, the application will be 

invalid. Applicants whose applications 

have become invalid may submit a new 

Form FMC–18, together with the 

required filing fee, at any time. 

(2) Registrations. A registration shall 

not become effective until the applicant 

has furnished proof of financial 

responsibility pursuant to § 515.21, has 

submitted a Form FMC–1, and its 

published tariff becomes effective 

pursuant to 46 CFR part 520. 

(b) Optional bond rider. Any NVOCC 

as defined in § 515.2(m)(2), in addition 

to a bond meeting the requirements of 

§ 515.21(a)(2) or (3), may obtain and file 

with the Commission proof of an 

optional bond rider, as provided in 

appendix E or appendix F of this part. 

■ 22. Revise § 515.26 to read as follows: 

§ 515.26 Termination of financial 

responsibility. 

No license or registration shall remain 

in effect unless valid proof of a financial 

responsibility instrument is maintained 

on file with the Commission. Upon 

receipt of notice of termination of such 

financial responsibility, the Commission 

shall notify the concerned licensee, 

registrant, or registrant’s legal agent in 

the United States, by mail, courier, or 

other method reasonably calculated to 

provide actual notice, at its last known 

address, that the Commission shall, 

without hearing or other proceeding, 

revoke the license or terminate the 

registration as of the termination date of 

the financial responsibility instrument, 

unless the licensee or registrant shall 

have submitted valid replacement proof 

of financial responsibility before such 

termination date. Replacement financial 

responsibility must bear an effective 

date no later than the termination date 

of the expiring financial responsibility 

instrument. 

■ 23. In § 515.27, revise the section 

heading and paragraphs (a) through (c) 

to read as follows: 

§ 515.27 Proof of compliance—NVOCC. 

(a) No common carrier shall 

knowingly and willfully transport cargo 

for the account of an NVOCC unless the 

carrier has determined that the NVOCC 

has a license or registration, a tariff, and 

financial responsibility as required by 

sections 8 (46 U.S.C. 40501—40503) and 

19 (46 U.S.C. 40901- 40904) of the 

Shipping Act and this part. 

(b) A common carrier can obtain proof 

of an NVOCC’s compliance with the OTI 

licensing, registration, tariff and 

financial responsibility requirements by: 

(1) Consulting the Commission’s Web 

site www.fmc.gov as provided in 

paragraph (d) of this section, to verify 

that the NVOCC has complied with the 

OTI licensing, registration, tariff, and 

financial responsibility requirements; or 

(2) Any other appropriate procedure, 

provided that such procedure is set 

forth in the carrier’s tariff. 

(c) A common carrier that has 

employed the procedure prescribed in 

paragraph (b)(1) of this section shall be 

deemed to have met its obligations 

under section 10(b)(11) of the Act (46 

U.S.C. 41104(11)), unless the common 

carrier knew that such NVOCC was not 

in compliance with the OTI licensing, 

registration, tariff, and financial 

responsibility requirements. 

* * * * * 

Appendices A through F to Subpart C 

[Removed] 

■ 24. Remove appendices A through F 

to subpart C. 

Subpart D—Duties and 

Responsibilities of Ocean 

Transportation Intermediaries; Reports 

to Commission 

■ 25. Revise § 515.31 to read as follows: 

§ 515.31 General duties. 

(a) Licensees and registrants; names 

and numbers. Each licensee and 

registrant shall carry on its business 

only under the name in which it was 

licensed or registered and only under its 

license or registration number as 

assigned by the Commission. When the 

licensee’s or registrant’s name appears 

on shipping documents, its Commission 

license or registration number shall also 

be included. 

(b) Stationery and billing forms. The 

name and license or registration number 

of each OTI shall be permanently 

imprinted on the licensee’s or 

registrant’s office stationery and billing 

forms. 

(c) Use of license or registration by 

others; prohibition. No OTI shall permit 

its name, license, license number, 

registration, or registration number to be 

used by any person who is not an 

employee or an agent of the OTI. An 

entity that also provides OTI services in 

its own name and not on behalf of a 

licensed or registered OTI must be 

separately licensed under this part and 

must provide proof of its own financial 

responsibility and publish a tariff, if 

applicable. A branch office of an OTI 

may use the license of the OTI, provided 

that the address of the branch office has 

been reported to the Commission in 

Form FMC–18 or pursuant to 

§ 515.20(e). 

(d) Arrangements with ocean 

transportation intermediaries whose 

licenses have been revoked. Unless prior 

written approval from the Commission 

has been obtained, no OTI shall, directly 

or indirectly: 

(1) Agree to perform ocean 

transportation intermediary services on 

shipments as an associate, 

correspondent, officer, employee, agent, 

or sub-agent of any person whose 

license has been revoked or suspended 

pursuant to § 515.16, or registration 

terminated or suspended pursuant to 

§ 515.19(g); 

(2) Assist in the furtherance of any 

ocean transportation intermediary 

business of an OTI whose license has 

been revoked; 

(3) Share forwarding fees or freight 

compensation with any such person; or 

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(4) Permit any such person, directly or 

indirectly, to participate, through 

ownership or otherwise, in the control 

or direction of the ocean transportation 

intermediary business of the licensee or 

registrant. 

(e) False or fraudulent claims, false 

information. No OTI shall prepare or file 

or assist in the preparation or filing of 

any claim, affidavit, letter of indemnity, 

or other paper or document concerning 

an ocean transportation intermediary 

transaction which it has reason to 

believe is false or fraudulent, nor shall 

any such OTI knowingly impart to a 

principal, shipper, common carrier or 

other person, false information relative 

to any ocean transportation 

intermediary transaction. 

(f) Errors and omissions of the 

principal or shipper. An OTI who has 

reason to believe that its principal or 

shipper has not, with respect to a 

shipment to be handled by such OTI, 

complied with the laws of the United 

States, or has made any error or 

misrepresentation in, or omission from, 

any export declaration, bill of lading, 

affidavit, or other document which the 

principal or shipper executes in 

connection with such shipment, shall 

advise its principal or shipper promptly 

of the suspected noncompliance, error, 

misrepresentation or omission, and 

shall decline to participate in any 

transaction involving such document 

until the matter is properly and lawfully 

resolved. 

(g) Response to requests of 

Commission. Upon the request of any 

authorized representative of the 

Commission, an OTI shall make 

available promptly for inspection or 

reproduction all records and books of 

account in connection with its ocean 

transportation intermediary business, 

and shall respond promptly to any 

lawful inquiries by such representative. 

All OTIs are responsible for requiring 

that, upon the request of any authorized 

Commission representative, their agents 

make available all records and books of 

account relating to ocean transportation 

intermediary service provided by or for 

their principals, and respond promptly 

to any lawful inquiries by such 

representative. 

(h) Express written authority. No OTI 

shall endorse or negotiate any draft, 

check, or warrant drawn to the order of 

its OTI principal or shipper without the 

express written authority of such OTI 

principal or shipper. 

(i) Accounting to principal or shipper. 

An OTI shall account to its principal(s) 

or shipper(s) for overpayments, 

adjustments of charges, reductions in 

rates, insurance refunds, insurance 

monies received for claims, proceeds of 

C.O.D. shipments, drafts, letters of 

credit, and any other sums due such 

principal(s) or shipper(s). 

(j) Prohibition. No person may 

advertise or hold out to provide OTI 

services unless that person holds a valid 

OTI license or is registered under this 

part. 

§ 515.32 [Amended] 

■ 26. In § 515.32, in paragraph (b), in the 

first sentence, remove the word ‘‘sales’’. 

■ 27. In § 515.33, revise the section 

heading, the introductory text, and 

paragraph (d) to read as follows: 

§ 515.33 Records to be kept. 

Each licensed or registered NVOCC 

and each licensed ocean freight 

forwarder shall maintain in an orderly 

and systematic manner, and keep 

current and correct, all records and 

books of account in connection with its 

OTI business. The licensed or registered 

NVOCC and each licensed freight 

forwarder may maintain these records in 

either paper or electronic form, which 

shall be readily available in usable form 

to the Commission; the electronically 

maintained records shall be no less 

accessible than if they were maintained 

in paper form. These recordkeeping 

requirements are independent of the 

retention requirements of other federal 

agencies. In addition, each licensed 

freight forwarder must maintain the 

following records for a period of five 

years: 

* * * * * 

(d) Special contracts. A true copy, or 

if oral, a true and complete 

memorandum, of every special 

arrangement or contract between a 

licensed freight forwarder and a 

principal, or modification or 

cancellation thereof. 

§ 515.34 [Amended] 

■ 28. Amend § 515.34 by removing 

‘‘$108’’ and adding the phrase ‘‘the fee 

set forth in § 515.5(c)’’ in its place. 

Subpart E—Freight Forwarding Fees 

and Compensation 

■ 29. Amend § 515.41 by: 

■ a. Removing paragraph (c); 

■ b. Redesignating paragraphs (d) and 

(e) as paragraphs (c) and (d), 

respectively; and 

■ c. Revising newly redesignated 

paragraph (d). 

The revision reads as follows: 

§ 515.41 Forwarder and principal; fees. 

* * * * * 

(d) In-plant arrangements. A licensed 

freight forwarder may place an 

employee or employees on the premises 

of its principal as part of the services 

rendered to such principal, provided: 

(1) The in-plant forwarder 

arrangement is reduced to writing and 

identifies all services provided by either 

party (whether or not constituting a 

freight forwarding service); states the 

amount of compensation to be received 

by either party for such services; sets 

forth all details concerning the 

procurement, maintenance or sharing of 

office facilities, personnel, furnishings, 

equipment and supplies; describes all 

powers of supervision or oversight of 

the licensee’s employee(s) to be 

exercised by the principal; and details 

all procedures for the administration or 

management of in-plant arrangements 

between the parties; and 

(2) The arrangement is not an artifice 

for a payment or other unlawful benefit 

to the principal. 

■ 30. In § 515.42, revise paragraphs (a), 

(b), (c), and (f) to read as follows: 

§ 515.42 Forwarder and carrier 

compensation; fees. 

(a) Disclosure of principal. The 

identity of the shipper must always be 

disclosed in the shipper identification 

box on the bill of lading. The licensed 

freight forwarder’s name may appear 

with the name of the shipper, but the 

forwarder must be identified as the 

shipper’s agent. 

(b) Certification required for 

compensation. A common carrier may 

pay compensation to a licensed freight 

forwarder only pursuant to such 

common carrier’s tariff provisions. 

When a common carrier’s tariff provides 

for the payment of compensation, such 

compensation shall be paid on any 

shipment forwarded on behalf of others 

where the forwarder has provided a 

certification as prescribed in paragraph 

(c) of this section and the shipper has 

been disclosed on the bill of lading as 

provided for in paragraph (a) of this 

section. The common carrier shall be 

entitled to rely on such certification 

unless it knows that the certification is 

incorrect. The common carrier shall 

retain such certifications for a period of 

five (5) years. 

(c) Form of certification. When a 

licensed freight forwarder is entitled to 

compensation, the forwarder shall 

provide the common carrier with a 

certification which indicates that the 

forwarder has performed the required 

services that entitle it to compensation. 

The required certification may be 

provided electronically by the forwarder 

or may be placed on one copy of the 

relevant bill of lading, a summary 

statement from the forwarder, the 

forwarder’s compensation invoice, or as 

an endorsement on the carrier’s 

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compensation check. Electronic 

certification must contain confirmations 

by the forwarder and the carrier 

identifying the shipments upon which 

forwarding compensation may be paid. 

Each forwarder shall retain evidence in 

its shipment files that the forwarder, in 

fact, has performed the required services 

enumerated on the certification. The 

certification shall read as follows: 

The undersigned hereby certifies that 

neither it nor any holding company, 

subsidiary, affiliate, officer, director, agent or 

executive of the undersigned has a beneficial 

interest in this shipment; that it is the holder 

of valid FMC License No., issued by the 

Federal Maritime Commission and has 

performed the following services: 

(1) Engaged, booked, secured, reserved, or 

contracted directly with the carrier or its 

agent for space aboard a vessel or confirmed 

the availability of that space; and 

(2) Prepared and processed the ocean bill 

of lading, dock receipt, or other similar 

document with respect to the shipment. 

* * * * * 

(f) Compensation; services performed 

by underlying carrier; exemptions. No 

licensed freight forwarder shall charge 

or collect compensation in the event the 

underlying common carrier, or its agent, 

has, at the request of such forwarder, 

performed any of the forwarding 

services set forth in § 515.2(h), unless 

such carrier or agent is also a licensed 

freight forwarder, or unless no other 

licensed freight forwarder is willing and 

able to perform such services. 

* * * * * 

■ 31. Add appendices A, B, C, D, E, and 

F to part 515 to read as follows: 

Appendix A to Part 515—Ocean 

Transportation Intermediary (OTI) 

Bond Form [Form 48] 

Form FMC–48 

Federal Maritime Commission 

Ocean Transportation Intermediary (OTI) 

Bond (Section 19, Shipping Act of 1984 (46 

U.S.C. 40901–40904)) llllll [indicate 

whether NVOCC or Freight Forwarder], as 

Principal (hereinafter ‘‘Principal’’), and 

llllll, as Surety (hereinafter 

‘‘Surety’’) are held and firmly bound unto the 

United States of America in the sum of 

$llllll for the payment of which sum 

we bind ourselves, our heirs, executors, 

administrators, successors and assigns, 

jointly and severally. 

Whereas, Principal operates as an OTI in 

the waterborne foreign commerce of the 

United States in accordance with the 

Shipping Act of 1984, 46 U.S.C. 40101– 

41309, and, if necessary, has a valid tariff 

published pursuant to 46 CFR part 515 and 

520, and pursuant to section 19 of the 

Shipping Act (46 U.S.C. 40901–40904), files 

this bond with the Commission; 

Whereas, this bond is written to ensure 

compliance by the Principal with section 19 

of the Shipping Act (46 U.S.C. 40901–40904), 

and the rules and regulations of the Federal 

Maritime Commission relating to evidence of 

financial responsibility for OTIs (46 CFR Part 

515), this bond shall be available to pay any 

judgment obtained or any settlement made 

pursuant to a claim under 46 CFR 515.23 for 

damages against the Insured arising from the 

Insured’s transportation-related activities 

under the Shipping Act, or order for 

reparations issued pursuant to section 11 of 

the Shipping Act (46 U.S.C. 41301–41302, 

41305–41307(a)), or any penalty assessed 

against the Principal pursuant to section 13 

of the Shipping Act (46 U.S.C. 41107–41109); 

provided, however, that the Surety’s 

obligation for a group or association of OTIs 

shall extend only to such damages, 

reparations or penalties described herein as 

are not covered by another surety bond, 

insurance policy or guaranty held by the 

OTI(s) against which a claim or final 

judgment has been brought and that Surety’s 

total obligation hereunder shall not exceed 

the amount per OTI provided in 46 CFR 

515.21 or the amount per group or 

association of OTIs provided for in 46 CFR 

515.21 in aggregate. 

Now, Therefore, The condition of this 

obligation is that the penalty amount of this 

bond shall be available to pay any judgment 

or any settlement made pursuant to a claim 

under 46 CFR 515.23 for damages against the 

Principal arising from the Principal’s 

transportation-related activities or order for 

reparations issued pursuant to section 11 of 

the Shipping Act (46 U.S.C. 41301–41302, 

41305–41307(a)), or any penalty assessed 

against the Principal pursuant to section 13 

of the Shipping Act (46 U.S.C. 41107–41109). 

This bond shall inure to the benefit of any 

and all persons who have obtained a 

judgment or a settlement made pursuant to 

a claim under 46 CFR 515.23 for damages 

against the Principal arising from its 

transportation-related activities or order of 

reparation issued pursuant to section 11 of 

the Shipping Act (46 U.S.C. 41301–41302, 

41305–41307(a)), and to the benefit of the 

Federal Maritime Commission for any 

penalty assessed against the Principal 

pursuant to section 13 of the Shipping Act 

(46 U.S.C. 41107–41109). However, the bond 

shall not apply to shipments of used 

household goods and personal effects for the 

account of the Department of Defense or the 

account of federal civilian executive agencies 

shipping under the International Household 

Goods Program administered by the General 

Services Administration. 

The liability of the Surety shall not be 

discharged by any payment or succession of 

payments hereunder, unless and until such 

payment or payments shall aggregate the 

penalty amount of this bond, and in no event 

shall the Surety’s total obligation hereunder 

exceed said penalty amount, regardless of the 

number of claims or claimants. 

This bond is effective the ll day of 

lllllll, llll and shall continue 

in effect until discharged or terminated as 

herein provided. The Principal or the Surety 

may at any time terminate this bond by mail 

or email (bcl@fmc.gov) written notice to the 

Director, Bureau of Certification and 

Licensing, Federal Maritime Commission, 

Washington, DC. 20573. Such termination 

shall become effective thirty (30) days after 

receipt of said notice by the Commission. 

The Surety shall not be liable for any 

transportation-related activities of the 

Principal after the expiration of the 30-day 

period but such termination shall not affect 

the liability of the Principal and Surety for 

any event occurring prior to the date when 

said termination becomes effective. 

The Surety consents to be sued directly in 

respect of any bona fide claim owed by 

Principal for damages, reparations or 

penalties arising from the transportationrelated activities under the Shipping Act of 

Principal in the event that such legal liability 

has not been discharged by the Principal or 

Surety after a claimant has obtained a final 

judgment (after appeal, if any) against the 

Principal from a United States Federal or 

State Court of competent jurisdiction and has 

complied with the procedures for collecting 

on such a judgment pursuant to 46 CFR 

515.23, the Federal Maritime Commission, or 

where all parties and claimants otherwise 

mutually consent, from a foreign court, or 

where such claimant has become entitled to 

payment of a specified sum by virtue of a 

compromise settlement agreement made with 

the Principal and/or Surety pursuant to 46 

CFR 515.23, whereby, upon payment of the 

agreed sum, the Surety is to be fully, 

irrevocably and unconditionally discharged 

from all further liability to such claimant; 

provided, however, that Surety’s total 

obligation hereunder shall not exceed the 

amount set forth in 46 CFR 515.21, as 

applicable. 

The underwriting Surety will immediately 

notify the Director, Bureau of Certification 

and Licensing, Federal Maritime 

Commission, Washington, DC. 20573, in 

writing by mail or email (bcl@fmc.gov), of all 

claims made, lawsuits filed, judgments 

rendered, and payments made against this 

bond. 

Signed and sealed this lll day of 

llllll, lll. 

(Please type name of signer under each 

signature.) 

lllllllllllllllllllll

Individual Principal or Partner 

lllllllllllllllllllll

Business Address 

lllllllllllllllllllll

Individual Principal or Partner 

lllllllllllllllllllll

Business Address 

lllllllllllllllllllll

Individual Principal or Partner 

lllllllllllllllllllll

Business Address 

lllllllllllllllllllll

Trade Name, If Any 

lllllllllllllllllllll

Corporate Principal 

lllllllllllllllllllll

State of Incorporation 

lllllllllllllllllllll

Trade Name, If Any 

lllllllllllllllllllll

Business Address 

lllllllllllllllllllll

By 

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lllllllllllllllllllll

Title 

lllllllllllllllllllll

(Affix Corporate Seal) 

lllllllllllllllllllll

Corporate Surety 

lllllllllllllllllllll

Business Address 

lllllllllllllllllllll

By 

lllllllllllllllllllll

Title 

(Affix Corporate Seal) 

Appendix B Part 515—Ocean 

Transportation Intermediary (OTI) 

Insurance Form [Form 67] 

Form FMC–67 

Federal Maritime Commission 

Ocean Transportation Intermediary (OTI) 

Insurance 

Form Furnished as Evidence of Financial 

Responsibility Under 46 U.S.C. 40901–40904 

This is to certify, that the (Name of 

Insurance Company), (hereinafter ‘‘Insurer’’) 

of (Home Office Address of Company) has 

issued to (OTI or Group or Association of 

OTIs [indicate whether NVOCC(s) or Freight 

Forwarder(s)]) (hereinafter ‘‘Insured’’) of 

(Address of OTI or Group or Association of 

OTIs) a policy or policies of insurance for 

purposes of complying with the provisions of 

Section 19 of the Shipping Act of 1984 (46 

U.S.C. 40901–40904) and the rules and 

regulations, as amended, of the Federal 

Maritime Commission, which provide 

compensation for damages, reparations or 

penalties arising from the transportationrelated activities of Insured, and made 

pursuant to the Shipping Act of 1984 (46 

U.S.C. 40101–41309) (Shipping Act). 

Whereas, the Insured is or may become an 

OTI subject to the Shipping Act and the rules 

and regulations of the Federal Maritime 

Commission, or is or may become a group or 

association of OTIs, and desires to establish 

financial responsibility in accordance with 

section 19 of the Shipping Act (46 U.S.C. 

40901–40904), files with the Commission 

this Insurance Form as evidence of its 

financial responsibility and evidence of a 

financial rating for the Insurer of Class V or 

higher under the Financial Size Categories of 

A.M. Best & Company or equivalent from an 

acceptable international rating organization 

on such organization’s letterhead or 

designated form, or, in the case of insurance 

provided by Underwriters at Lloyd’s, 

documentation verifying membership in 

Lloyd’s, or, in the case of surplus lines 

insurers, documentation verifying inclusion 

on a current ‘‘white list’’ issued by the NonAdmitted Insurers’ Information Office of the 

National Association of Insurance 

Commissioners. 

Whereas, the Insurance is written to assure 

compliance by the Insured with section 19 of 

the Shipping Act (46 U.S.C. 40901–40904), 

and the rules and regulations of the Federal 

Maritime Commission relating to evidence of 

financial responsibility for OTIs, this 

Insurance shall be available to pay any 

judgment obtained or any settlement made 

pursuant to a claim under 46 CFR 515.23 for 

damages against the Insured arising from the 

Insured’s transportation-related activities 

under the Shipping Act, or order for 

reparations issued pursuant to section 11 of 

the Shipping Act (46 U.S.C. 41301–41302, 

41305–41307(a)), or any penalty assessed 

against the Insured pursuant to section 13 of 

the Shipping Act (46 U.S.C. 41107–41109); 

provided, however, that Insurer’s obligation 

for a group or association of OTIs shall 

extend only to such damages, reparations or 

penalties described herein as are not covered 

by another insurance policy, guaranty or 

surety bond held by the OTI(s) against which 

a claim or final judgment has been brought 

and that Insurer’s total obligation hereunder 

shall not exceed the amount per OTI set forth 

in 46 CFR 515.21 or the amount per group 

or association of OTIs set forth in 46 CFR 

515.21 in aggregate. 

Whereas, the Insurer certifies that it has 

sufficient and acceptable assets located in the 

United States to cover all liabilities of 

Insured herein described, this Insurance shall 

inure to the benefit of any and all persons 

who have a bona fide claim against the 

Insured pursuant to 46 CFR 515.23 arising 

from its transportation-related activities 

under the Shipping Act, or order of 

reparation issued pursuant to section 11 of 

the Shipping Act (46 U.S.C. 41301–41302, 

41305–41307(a)), and to the benefit of the 

Federal Maritime Commission for any 

penalty assessed against the Insured pursuant 

to section 13 of the Shipping Act (46 U.S.C. 

41107–41109). 

The Insurer consents to be sued directly in 

respect of any bona fide claim owed by 

Insured for damages, reparations or penalties 

arising from the transportation-related 

activities under the Shipping Act, of Insured 

in the event that such legal liability has not 

been discharged by the Insured or Insurer 

after a claimant has obtained a final judgment 

(after appeal, if any) against the Insured from 

a United States Federal or State Court of 

competent jurisdiction and has complied 

with the procedures for collecting on such a 

judgment pursuant to 46 CFR 515.23, the 

Federal Maritime Commission, or where all 

parties and claimants otherwise mutually 

consent, from a foreign court, or where such 

claimant has become entitled to payment of 

a specified sum by virtue of a compromise 

settlement agreement made with the Insured 

and/or Insurer pursuant to 46 CFR 515.23, 

whereby, upon payment of the agreed sum, 

the Insurer is to be fully, irrevocably and 

unconditionally discharged from all further 

liability to such claimant; provided, however, 

that Insurer’s total obligation hereunder shall 

not exceed the amount per OTI set forth in 

46 CFR 515.21 or the amount per group or 

association of OTIs set forth in 46 CFR 

515.21. 

The liability of the Insurer shall not be 

discharged by any payment or succession of 

payments hereunder, unless and until such 

payment or payments shall aggregate the 

penalty of the Insurance in the amount per 

member OTI set forth in 46 CFR 515.21, or 

the amount per group or association of OTIs 

set forth in 46 CFR 515.21, regardless of the 

financial responsibility or lack thereof, or the 

solvency or bankruptcy, of Insured. The 

insurance evidenced by this undertaking 

shall be applicable only in relation to 

incidents occurring on or after the effective 

date and before the date termination of this 

undertaking becomes effective. The effective 

date of this undertaking shall be lll day 

of lllll, lll, and shall continue in 

effect until discharged or terminated as 

herein provided. The Insured or the Insurer 

may at any time terminate the Insurance by 

mail or email (bcl@fmc.gov) written notice to 

the Director, Bureau of Certification and 

Licensing, Federal Maritime Commission, 

Washington, DC 20573. Such termination 

shall become effective thirty (30) days after 

receipt of said notice by the Commission. 

The Insurer shall not be liable for any 

transportation-related activities under the 

Shipping Act of the Insured after the 

expiration of the 30-day period but such 

termination shall not affect the liability of the 

Insured and Insurer for such activities 

occurring prior to the date when said 

termination becomes effective. 

(Name of Agent) llll domiciled in the 

United States, with offices located in the 

United States, at llll is hereby 

designated as the Insurer’s agent for service 

of process for the purposes of enforcing the 

Insurance certified to herein. 

If more than one insurer joins in executing 

this document, that action constitutes joint 

and several liability on the part of the 

insurers. 

The Insurer will immediately notify the 

Director, Bureau of Certification and 

Licensing, Federal Maritime Commission, 

Washington, DC 20573, in writing by mail or 

email (bcl@fmc.gov), of all claims made, 

lawsuits filed, judgments rendered, and 

payments made against the Insurance. 

Signed and sealed this lll day of 

llllll, lll. 

lllllllllllllllllllll

Signature of Official signing on behalf of 

Insurer 

lllllllllllllllllllll

Type Name and Title of signer 

This Insurance Form has been filed with 

the Federal Maritime Commission. 

Appendix C to Part 515—Ocean 

Transportation Intermediary (OTI) 

Guaranty Form [Form 68] 

Form FMC–68 

Federal Maritime Commission 

Guaranty in Respect of Ocean 

Transportation Intermediary (OTI) Liability 

for Damages, Reparations or Penalties Arising 

from Transportation-Related Activities Under 

the Shipping Act of 1984 (46 U.S.C. 40101– 

41309) (Shipping Act). 

1. Whereas llllllllll (Name of 

Applicant [indicate whether NVOCC or 

Freight Forwarder]) (hereinafter ‘‘Applicant’’) 

is or may become an Ocean Transportation 

Intermediary (‘‘OTI’’) subject to the Shipping 

Act of 1984 (46 U.S.C. 40101–41309) and the 

rules and regulations of the Federal Maritime 

Commission (FMC), or is or may become a 

group or association of OTIs, and desires to 

establish its financial responsibility in 

accordance with section 19 of the Shipping 

Act (46 U.S.C. 41107–41109), then, provided 

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that the FMC shall have accepted, as 

sufficient for that purpose, the Applicant’s 

application, supported by evidence of a 

financial rating for the Guarantor of Class V 

or higher under the Financial Size Categories 

of A.M. Best & Company or equivalent from 

an acceptable international rating 

organization on such rating organization’s 

letterhead or designated form, or, in the case 

of Guaranty provided by Underwriters at 

Lloyd’s, documentation verifying 

membership in Lloyd’s, or, in the case of 

surplus lines insurers, documentation 

verifying inclusion on a current ‘‘white list’’ 

issued by the Non-Admitted Insurers’ 

Information Office of the National 

Association of Insurance Commissioners, the 

undersigned Guarantor certifies that it has 

sufficient and acceptable assets located in the 

United States to cover all damages arising 

from the transportation-related activities of 

the covered OTI as specified under the 

Shipping Act. 

2. Whereas, this Guaranty is written to 

ensure compliance by the Applicant with 

section 19 of the Shipping Act (46 U.S.C. 

40901–40904), and the rules and regulations 

of the Federal Maritime Commission relating 

to evidence of financial responsibility for 

OTIs (46 CFR part 515), this guaranty shall 

be available to pay any judgment obtained or 

any settlement made pursuant to a claim 

under 46 CFR 515.23 for damages against the 

Applicant arising from the Applicant’s 

transportation-related activities under the 

Shipping Act, or order for reparations issued 

pursuant to section 11 of the Shipping Act 

(46 U.S.C. 41301–41302, 41305–41307(a)), or 

any penalty assessed against the Applicant 

pursuant to section 13 of the Shipping Act 

(46 U.S.C. 41107–41109); provided, however, 

that the Guarantor’s obligation for a group or 

association of OTIs shall extend only to such 

damages, reparations or penalties described 

herein as are not covered by another surety 

bond, insurance policy, or guaranty held by 

the OTI(s) against which a claim or final 

judgment has been brought and that 

Guarantor’s total obligation hereunder shall 

not exceed the amount per OTI provided for 

in 46 CFR 515.21, in aggregate. 

3. Now, Therefore, The condition of this 

obligation is that the penalty amount of this 

Guaranty shall be available to pay any 

judgment obtained or any settlement made 

pursuant to a claim under 46 CFR 515.23 for 

damages against the Applicant arising from 

the Applicant’s transportation-related 

activities or order for reparations issued 

pursuant to section 11 of the Shipping Act 

(46 U.S.C. 41301–41302, 41305–41307(a)), or 

any penalty assessed against the Principal 

pursuant to section 13 of the Shipping Act 

(46 U.S.C. 41107–41109). 

4. The undersigned Guarantor hereby 

consents to be sued directly in respect of any 

bona fide claim owed by Applicant for 

damages, reparations or penalties arising 

from Applicant’s transportation-related 

activities under the Shipping Act, in the 

event that such legal liability has not been 

discharged by the Applicant after any such 

claimant has obtained a final judgment (after 

appeal, if any) against the Applicant from a 

United States Federal or State Court of 

competent jurisdiction and has complied 

with the procedures for collecting on such a 

judgment pursuant to 46 CFR 515.23, the 

FMC, or where all parties and claimants 

otherwise mutually consent, from a foreign 

court, or where such claimant has become 

entitled to payment of a specified sum by 

virtue of a compromise settlement agreement 

made with the Applicant and/or Guarantor 

pursuant to 46 CFR 515.23, whereby, upon 

payment of the agreed sum, the Guarantor is 

to be fully, irrevocably and unconditionally 

discharged from all further liability to such 

claimant. In the case of a guaranty covering 

the liability of a group or association of OTIs, 

Guarantor’s obligation extends only to such 

damages, reparations or penalties described 

herein as are not covered by another 

insurance policy, guaranty or surety bond 

held by the OTI(s) against which a claim or 

final judgment has been brought. 

5. The Guarantor’s liability under this 

Guaranty in respect to any claimant shall not 

exceed the amount of the guaranty; and the 

aggregate amount of the Guarantor’s liability 

under this Guaranty shall not exceed the 

amount per OTI set forth in 46 CFR 515.21, 

or the amount per group or association of 

OTIs set forth in 46 CFR 515.21 in aggregate. 

6. The Guarantor’s liability under this 

Guaranty shall attach only in respect of such 

activities giving rise to a cause of action 

against the Applicant, in respect of any of its 

transportation-related activities under the 

Shipping Act, occurring after the Guaranty 

has become effective, and before the 

expiration date of this Guaranty, which shall 

be the date thirty (30) days after the date of 

receipt of mail or email (bcl@fmc.gov) written 

notice to the Director, Bureau of Certification 

and Licensing, Federal Maritime 

Commission, Washington, DC. 20573, that 

either Applicant or the Guarantor has elected 

to terminate this Guaranty. The Guarantor 

and/or Applicant specifically agree to file 

such written notice of cancellation. 

7. Guarantor shall not be liable for 

payments of any of the damages, reparations 

or penalties hereinbefore described which 

arise as the result of any transportationrelated activities of Applicant after the 

cancellation of the Guaranty, as herein 

provided, but such cancellation shall not 

affect the liability of the Guarantor for the 

payment of any such damages, reparations or 

penalties prior to the date such cancellation 

becomes effective. 

8. Guarantor shall pay, subject to the limit 

of the amount per OTI set forth in 46 CFR 

515.21, directly to a claimant any sum or 

sums which Guarantor, in good faith, 

determines that the Applicant has failed to 

pay and would be held legally liable by 

reason of Applicant’s transportation-related 

activities, or its legal responsibilities under 

the Shipping Act and the rules and 

regulations of the FMC, made by Applicant 

while this agreement is in effect, regardless 

of the financial responsibility or lack thereof, 

or the solvency or bankruptcy, of Applicant. 

9. The Applicant or Guarantor will 

immediately notify the Director, Bureau of 

Certification and Licensing, Federal Maritime 

Commission, Washington, DC. 20573, in 

writing by mail or email (bcl@fmc.gov), of all 

claims made, lawsuits filed, judgments 

rendered, and payments made under the 

Guaranty. 

10. Applicant and Guarantor agree to 

handle the processing and adjudication of 

claims by claimants under the Guaranty 

established herein in the United States, 

unless by mutual consent of all parties and 

claimants another country is agreed upon. 

Guarantor agrees to appoint an agent for 

service of process in the United States. 

11. This Guaranty shall be governed by the 

laws in the State of ll to the extent not 

inconsistent with the rules and regulations of 

the FMC. 

12. This Guaranty is effective the day of l

l, llllll, llll 12:01 a.m., 

standard time at the address of the Guarantor 

as stated herein and shall continue in force 

until terminated as herein provided. 

13. The Guarantor hereby designates as the 

Guarantor’s legal agent for service of process 

domiciled in the United States 

llllllll, with offices located in the 

United States at llllllll, for the 

purposes of enforcing the Guaranty described 

herein. 

lllllllllllllllllllll

(Place and Date of Execution) 

lllllllllllllllllllll

(Type Name of Guarantor) 

lllllllllllllllllllll

(Type Address of Guarantor) 

lllllllllllllllllllll

By 

lllllllllllllllllllll

(Signature and Title) 

Appendix D to Part 515—Ocean 

Transportation Intermediary (OTI) 

Group Bond Form [FMC–69] 

Form FMC–69 

Federal Maritime Commission 

Ocean Transportation Intermediary (OTI) 

Group Supplemental Coverage Bond Form 

(Shipping Act of 1984 (46 U.S.C. 40101– 

41309)) (Shipping Act). 

llllll [indicate whether NVOCC or 

Freight Forwarder], as Principal (hereinafter 

‘‘Principal’’), and llllllllll as 

Surety (hereinafter ‘‘Surety’’) are held and 

firmly bound unto the United States of 

America in the sum of $llllllll for 

the payment of which sum we bind 

ourselves, our heirs, executors, 

administrators, successors and assigns, 

jointly and severally. 

Whereas, (Principal) lllllllll 

operates as a group or association of OTIs in 

the waterborne foreign commerce of the 

United States and pursuant to section 19 of 

the Shipping Act of 1984 (46 U.S.C. 40901– 

40904), files this bond with the Federal 

Maritime Commission; 

Whereas, this group bond is written to 

ensure compliance by the OTIs, enumerated 

in Appendix A of this bond, with section 19 

of the Shipping Act (46 U.S.C. 40901–40904), 

and the rules and regulations of the Federal 

Maritime Commission relating to evidence of 

financial responsibility for OTIs (46 CFR Part 

515), this group bond shall be available to 

pay any judgment obtained or any settlement 

made pursuant to a claim under 46 CFR 

515.23 for damages against such OTIs arising 

from OTI transportation-related activities 

under the Shipping Act, or order for 

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61560 Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Proposed Rules 

reparations issued pursuant to section 11 of 

the Shipping Act (46 U.S.C. 41301–41302, 

41305–41307(a)), or any penalty assessed 

against one or more OTI members pursuant 

to section 13 of the Shipping Act (46 U.S.C. 

41107–41109); provided, however, that the 

Surety’s obligation for a group or association 

of OTIs shall extend only to such damages, 

reparations or penalties described herein as 

are not covered by another surety bond, 

insurance policy or guaranty held by the 

OTI(s) against which a claim or final 

judgment has been brought and that Surety’s 

total obligation hereunder shall not exceed 

the amount per OTI provided for in 46 CFR 

515.21 or the amount per group or 

association of OTIs provided for in 46 CFR 

515.21 in aggregate. 

Now, therefore, the conditions of this 

obligation are that the penalty amount of this 

bond shall be available to pay any judgment 

obtained or any settlement made pursuant to 

a claim under 46 CFR 515.23 against the OTIs 

enumerated in Appendix A of this bond for 

damages arising from any or all of the 

identified OTIs’ transportation-related 

activities under the Shipping Act (46 U.S.C. 

40101–41309), or order for reparations issued 

pursuant to section 11 of the Shipping Act 

(46 U.S.C. 41301–41302, 41305–41307(a)), or 

any penalty assessed pursuant to section 13 

of the Shipping Act (46 U.S.C. 41107–41109), 

that are not covered by the identified OTIs’ 

individual insurance policy(ies), 

guaranty(ies) or surety bond(s). 

This group bond shall inure to the benefit 

of any and all persons who have obtained a 

judgment or made a settlement pursuant to 

a claim under 46 CFR 515.23 for damages 

against any or all of the OTIs identified in 

Appendix A not covered by said OTIs’ 

insurance policy(ies), guaranty(ies) or surety 

bond(s) arising from said OTIs’ 

transportation-related activities under the 

Shipping Act, or order for reparation issued 

pursuant to section 11 of the Shipping Act, 

and to the benefit of the Federal Maritime 

Commission for any penalty assessed against 

said OTIs pursuant to section 13 of the 

Shipping Act (46 U.S.C. 41107–41109). 

However, the bond shall not apply to 

shipments of used household goods and 

personal effects for the account of the 

Department of Defense or the account of 

federal civilian executive agencies shipping 

under the International Household Goods 

Program administered by the General 

Services Administration. 

The Surety consents to be sued directly in 

respect of any bona fide claim owed by any 

or all of the OTIs identified in Appendix A 

for damages, reparations or penalties arising 

from the transportation-related activities 

under the Shipping Act of the OTIs in the 

event that such legal liability has not been 

discharged by the OTIs or Surety after a 

claimant has obtained a final judgment (after 

appeal, if any) against the OTIs from a United 

States Federal or State Court of competent 

jurisdiction and has complied with the 

procedures for collecting on such a judgment 

pursuant to 46 CFR 515.23, the Federal 

Maritime Commission, or where all parties 

and claimants otherwise mutually consent, 

from a foreign court, or where such claimant 

has become entitled to payment of a specified 

sum by virtue of a compromise settlement 

agreement made with the OTI(s) and/or 

Surety pursuant to 46 CFR 515.23, whereby, 

upon payment of the agreed sum, the Surety 

is to be fully, irrevocably and 

unconditionally discharged from all further 

liability to such claimant(s). 

The liability of the Surety shall not be 

discharged by any payment or succession of 

payments hereunder, unless and until such 

payment or payments shall aggregate the 

penalty of this bond, and in no event shall 

the Surety’s total obligation hereunder 

exceed the amount per member OTI set forth 

in 46 CFR 515.21, identified in Appendix A, 

or the amount per group or association of 

OTIs set forth in 46 CFR 515.21, regardless 

of the number of OTIs, claims or claimants. 

This bond is effective the ll day of 

llllll, llll, and shall continue in 

effect until discharged or terminated as 

herein provided. The Principal or the Surety 

may at any time terminate this bond by mail 

or email (bcl@fmc.gov) written notice to the 

Director, Bureau of Certification and 

Licensing, Federal Maritime Commission, 

Washington, DC. 20573. Such termination 

shall become effective thirty (30) days after 

receipt of said notice by the Commission. 

The Surety shall not be liable for any 

transportation-related activities of the OTIs 

identified in Appendix A as covered by the 

Principal after the expiration of the 30-day 

period, but such termination shall not affect 

the liability of the Principal and Surety for 

any transportation-related activities 

occurring prior to the date when said 

termination becomes effective. 

The Principal or financial responsibility 

provider will promptly notify the 

underwriting Surety in writing and the 

Director, Bureau of Certification and 

Licensing, Federal Maritime Commission, 

Washington, DC, 20573, by mail or email 

(bcl@fmc.gov), of any additions, deletions or 

changes to the OTIs enumerated in Appendix 

A. In the event of additions to Appendix A, 

coverage will be effective upon receipt of 

such notice, in writing, by the Commission 

at its office in Washington, DC. In the event 

of deletions to Appendix A, termination of 

coverage for such OTI(s) shall become 

effective 30 days after receipt of written 

notice by the Commission. Neither the 

Principal nor the Surety shall be liable for 

any transportation-related activities of the 

OTI(s) deleted from Appendix A that occur 

after the expiration of the 30-day period, but 

such termination shall not affect the liability 

of the Principal and Surety for any 

transportation-related activities of said OTI(s) 

occurring prior to the date when said 

termination becomes effective. 

The underwriting Surety will immediately 

notify the Director, Bureau of Certification 

and Licensing, Federal Maritime 

Commission, Washington, DC. 20573, in 

writing by mail or email (bcl@fmc.gov), of all 

claims made, lawsuits filed, judgments 

rendered, and payments made against this 

group bond. 

Signed and sealed this ll day of 

llll, lll, 

(Please type name of signer under each 

signature). 

lllllllllllllllllllll

Individual Principal or Partner 

lllllllllllllllllllll

Business Address 

lllllllllllllllllllll

Individual Principal or Partner 

lllllllllllllllllllll

Business Address 

lllllllllllllllllllll

Individual Principal or Partner 

lllllllllllllllllllll

Business Address 

lllllllllllllllllllll

Trade Name, if Any 

lllllllllllllllllllll

Corporate Principal 

lllllllllllllllllllll

Place of Incorporation 

lllllllllllllllllllll

Trade Name, if Any 

lllllllllllllllllllll

Business Address (Affix Corporate Seal) 

lllllllllllllllllllll

By 

lllllllllllllllllllll

Title 

lllllllllllllllllllll

Principal’s Agent for Service of Process 

(Required if Principal is not a U.S. 

Corporation) 

lllllllllllllllllllll

Agent’s Address 

lllllllllllllllllllll

Corporate Surety 

lllllllllllllllllllll

Business Address (Affix Corporate Seal) 

lllllllllllllllllllll

By 

lllllllllllllllllllll

Title 

lllllllllllllllllllll

Appendix E to Part 515—Optional 

Rider for Additional NVOCC Financial 

Responsibility (Optional Rider to Form 

FMC–48) [FORM 48A] 

FMC–48A, OMB No. 3072–0018, (04/06/04) 

Optional Rider for Additional NVOCC 

Financial Responsibility [Optional Rider to 

Form FMC–48] 

RIDER 

The undersigned llllllllll, as 

Principal and llllllllll, as 

Surety do hereby agree that the existing Bond 

No. llllllllll to the United 

States of America and filed with the Federal 

Maritime Commission pursuant to section 19 

of the Shipping Act of 1984 is modified as 

follows: 

1. The following condition is added to this 

Bond: 

a. An additional condition of this Bond is 

that $llllllllllll (payable in 

U.S. Dollars or Renminbi Yuan at the option 

of the Surety) shall be available to pay any 

fines and penalties for activities in the U.S.- 

China trades imposed by the Ministry of 

Communications of the People’s Republic of 

China (‘‘MOC’’) or its authorized competent 

communications department of the people’s 

government of the province, autonomous 

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Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Proposed Rules 61561 

region or municipality directly under the 

Central Government or the State 

Administration of Industry and Commerce 

pursuant to the Regulations of the People’s 

Republic of China on International Maritime 

Transportation and the Implementing Rules 

of the Regulations of the PRC on 

International Maritime Transportation 

promulgated by MOC Decree No. 1, January 

20, 2003. 

b. The liability of the Surety shall not be 

discharged by any payment or succession of 

payments pursuant to section 1 of this Rider, 

unless and until the payment or payments 

shall aggregate the amount set forth in 

section 1a of this Rider. In no event shall the 

Surety’s obligation under this Rider exceed 

the amount set forth in section 1a regardless 

of the number of claims. 

c. The total amount of coverage available 

under this Bond and all of its riders, 

available pursuant to the terms of section 

1(a.) of this rider, equals $llllllll. 

The total amount of aggregate coverage 

equals or exceeds $125,000. 

d. This Rider is effective the lll day of 

llllll, 20ll, and shall continue in 

effect until discharged, terminated as herein 

provided, or upon termination of the Bond in 

accordance with the sixth paragraph of the 

Bond. The Principal or the Surety may at any 

time terminate this Rider by mail or email 

(bcl@fmc.gov) written notice to the Director, 

Bureau of Certification and Licensing, 

Federal Maritime Commission, Washington, 

DC 20573, accompanied by proof of 

transmission of notice to MOC. Such 

termination shall become effective thirty (30) 

days after receipt of said notice and proof of 

transmission by the Federal Maritime 

Commission. The Surety shall not be liable 

for fines or penalties imposed on the 

Principal after the expiration of the 30-day 

period but such termination shall not affect 

the liability of the Principal and Surety for 

any fine or penalty imposed prior to the date 

when said termination becomes effective. 

2. This Bond remains in full force and 

effect according to its terms except as 

modified above. 

In witness whereof we have hereunto set 

our hands and seals on this day of 

llllll, 20ll, 

[Principal], 

By: lllllllllllllllllll

[Surety], 

By: lllllllllllllllllll

Appendix F to Part 515—Optional 

Rider for Additional NVOCC Financial 

Responsibility for Group Bonds 

[Optional Rider to Form FMC–69] 

FMC–69A, OMB No. 3072–0018 (04/06/04) 

Optional Rider for Additional NVOCC 

Financial Responsibility for Group Bonds 

[Optional Rider to Form FMC–69] 

RIDER 

The undersigned lllllllll, as 

Principal and lllllllll, as Surety 

do hereby agree that the existing Bond No. 

llllll to the United States of America 

and filed with the Federal Maritime 

Commission pursuant to section 19 of the 

Shipping Act of 1984 is modified as follows: 

1. The following condition is added to this 

Bond: 

a. An additional condition of this Bond is 

that $ llll (payable in U.S. Dollars or 

Renminbi Yuan at the option of the Surety) 

shall be available to any NVOCC enumerated 

in an Appendix to this Rider to pay any fines 

and penalties for activities in the U.S.-China 

trades imposed by the Ministry of 

Communications of the People’s Republic of 

China (‘‘MOC’’) or its authorized competent 

communications department of the people’s 

government of the province, autonomous 

region or municipality directly under the 

Central Government or the State 

Administration of Industry and Commerce 

pursuant to the Regulations of the People’s 

Republic of China on International Maritime 

Transportation and the Implementing Rules 

of the Regulations of the PRC on 

International Maritime Transportation 

promulgated by MOC Decree No. 1, January 

20, 2003. Such amount is separate and 

distinct from the bond amount set forth in 

the first paragraph of this Bond. Payment 

under this Rider shall not reduce the bond 

amount in the first paragraph of this Bond or 

affect its availability. The Surety shall 

indicate that $50,000 is available to pay such 

fines and penalties for each NVOCC listed on 

appendix A to this Rider wishing to exercise 

this option. 

b. The liability of the Surety shall not be 

discharged by any payment or succession of 

payments pursuant to section 1 of this Rider, 

unless and until the payment or payments 

shall aggregate the amount set forth in 

section 1a of this Rider. In no event shall the 

Surety’s obligation under this Rider exceed 

the amount set forth in section 1a regardless 

of the number of claims. 

c. This Rider is effective the llll day 

of llllllll, 20ll and shall 

continue in effect until discharged, 

terminated as herein provided, or upon 

termination of the Bond in accordance with 

the sixth paragraph of the Bond. The 

Principal or the Surety may at any time 

terminate this Rider by mail or email (bcl@

fmc.gov) written notice to the Director, 

Bureau of Certification and Licensing, 

Federal Maritime Commission, Washington, 

DC. 20573, accompanied by proof of 

transmission of notice to MOC. Such 

termination shall become effective thirty (30) 

days after receipt of said notice and proof of 

transmission by the Federal Maritime 

Commission. The Surety shall not be liable 

for fines or penalties imposed on the 

Principal after the expiration of the 30-day 

period but such termination shall not affect 

the liability of the Principal and Surety for 

any fine or penalty imposed prior to the date 

when said termination becomes effective. 

2. This Bond remains in full force and 

effect according to its terms except as 

modified above. 

In witness whereof we have hereunto set 

our hands and seals on this llll day of 

llll, 20ll. 

[Principal], 

By: lllllllllllllllllll

[Surety], 

By: lllllllllllllllllll

Privacy Act and Paperwork Reduction 

Act Notice 

The collection of this information is 

authorized generally by Section 19 of 

the Shipping Act of 1984 (46 U.S.C. 

40901–40904). This is an optional form. 

Submission is completely voluntary. 

Failure to submit this form will in no 

way impact the Federal Maritime 

Commission’s assessment of your firm’s 

financial responsibility. 

You are not required to provide the 

information requested on a form that is 

subject to the Paperwork Reduction Act 

unless the form displays a valid OMB 

control number. Copies of this form will 

be maintained until the corresponding 

license has been revoked. 

The time needed to complete and file 

this form will vary depending on 

individual circumstances. The 

estimated average time is: 

Recordkeeping, 20 minutes; Learning 

about the form, 20 minutes; Preparing 

and sending the form to the FMC, 20 

minutes. 

If you have comments concerning the 

accuracy of these time estimates or 

suggestions for making this form 

simpler, we would be happy to hear 

from you. You can write to the 

Secretary, Federal Maritime 

Commission, 800 North Capitol Street 

NW., Washington, DC 20573–0001 or 

email: secretary@fmc.gov. 

By the Commission. 

Karen V. Gregory, 

Secretary. 

[FR Doc. 2014–24003 Filed 10–9–14; 8:45 am] 

BILLING CODE 6730–01–P 

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