H. R. 1442—52
‘‘(b) COMMISSION PROHIBITION.—The Federal Maritime Commis-
sion, at any time after notice and opportunity for a hearing, may 
prohibit the publication or use of a rate, charge, classification, 
rule, or regulation that a controlled carrier has failed to demonstrate 
is just and reasonable. 
‘‘(c) BURDEN OF PROOF.—In a proceeding under this section, 
the burden of proof is on the controlled carrier to demonstrate 
that its rate, charge, classification, rule, or regulation is just and 
reasonable. 
‘‘(d) VOIDNESS.—A rate, charge, classification, rule, or regulation 
that has been suspended or prohibited by the Commission is void 
and its use is unlawful. 
‘‘§ 40702. Rate standards 
‘‘(a) DEFINITION.—In this section, the term ‘constructive costs’ 
means the costs of another carrier, other than a controlled carrier, 
operating similar vessels and equipment in the same or a similar 
trade. 
‘‘(b) STANDARDS.—In determining whether a rate, charge, classi-
fication, rule, or regulation of a controlled carrier is just and reason-
able, the Federal Maritime Commission—
‘‘(1) shall take into account whether the rate or charge 
that has been published or assessed, or that would result from 
the pertinent classification, rule, or regulation, is below a level 
that is fully compensatory to the controlled carrier based on 
the carrier’s actual costs or constructive costs; and 
‘‘(2) may take into account other appropriate factors, 
including whether the rate, charge, classification, rule, or regu-
lation is—
‘‘(A) the same as, or similar to, those published or 
assessed by other carriers in the same trade; 
‘‘(B) required to ensure movement of particular cargo 
in the same trade; or 
‘‘(C) required to maintain acceptable continuity, level, 
or quality of common carrier service to or from affected 
ports. 
‘‘§ 40703. Effective date of rates 
‘‘Notwithstanding section 40501(e) of this title and except for 
service contracts, a rate, charge, classification, rule, or regulation 
of a controlled carrier may not become effective, without special 
permission of the Federal Maritime Commission, until the 30th 
day after publication. 
‘‘§ 40704. Commission review 
‘‘(a) REQUEST FOR JUSTIFICATION.—On request of the Federal 
Maritime Commission, a controlled carrier shall file with the 
Commission, within 20 days of the request, a statement of justifica-
tion that sufficiently details the carrier’s need and purpose for 
an existing or proposed rate, charge, classification, rule, or regula-
tion and upon which the Commission may reasonably base a deter-
mination of its lawfulness. 
‘‘(b) DETERMINATION.—Within 120 days after receipt of informa-
tion requested under subsection (a), the Commission shall determine 
whether the rate, charge, classification, rule, or regulation may 
be unjust and unreasonable.
H. R. 1442—53
‘‘(c) SHOW CAUSE ORDER.—Whenever the Commission is of the 
opinion that a rate, charge, classification, rule, or regulation pub-
lished or assessed by a controlled carrier may be unjust and 
unreasonable, the Commission shall issue an order to the controlled 
carrier to show cause why the rate, charge, classification, rule, 
or regulation should not be prohibited. 
‘‘(d) SUSPENSION PENDING DETERMINATION.—
‘‘(1) NOT YET EFFECTIVE.—Pending a determination of the 
lawfulness of a rate, charge, classification, rule, or regulation 
in a proceeding under subsection (c), the Commission may 
suspend the rate, charge, classification, rule, or regulation at 
any time before its effective date. 
‘‘(2) ALREADY EFFECTIVE.—If a rate, charge, classification, 
rule, or regulation has already become effective, the Commis-
sion, on issuance of an order to show cause, may suspend 
the rate, charge, classification, rule, or regulation on at least 
30 days’ notice to the controlled carrier. 
‘‘(3) MAXIMUM SUSPENSION.—A period of suspension under 
this subsection may not exceed 180 days. 
‘‘(e) 
REPLACEMENT
DURING
SUSPENSION.—Whenever 
the 
Commission has suspended a rate, charge, classification, rule, or 
regulation under this section, the controlled carrier may publish 
a new rate, charge, classification, rule, or regulation to take effect 
immediately during the suspension in lieu of the suspended rate, 
charge, classification, rule, or regulation. However, the Commission 
may reject the new rate, charge, classification, rule, or regulation 
if the Commission believes it is unjust and unreasonable. 
‘‘§ 40705. Presidential review of Commission orders 
‘‘(a) TRANSMISSION
TO
PRESIDENT.—The Federal Maritime 
Commission shall transmit to the President, concurrently with 
publication thereof, each order of suspension or final order of 
prohibition issued under section 40704 of this title. 
‘‘(b) PRESIDENTIAL REQUEST AND COMMISSION ACTION.—Within 
10 days after receipt or the effective date of a Commission order 
referred to in subsection (a), the President, in writing, may request 
the Commission to stay the effect of the order if the President 
finds that the stay is required for reasons of national defense 
or foreign policy. The reasons shall be specified in the request. 
The Commission shall immediately grant the request by issuing 
an order in which the President’s request shall be described. During 
a stay, the President shall, whenever practicable, attempt to resolve 
the matter by negotiating with representatives of the applicable 
foreign governments. 
‘‘§ 40706. Exceptions 
‘‘This chapter does not apply to—
‘‘(1) a controlled carrier of a foreign country whose vessels 
are entitled by a treaty of the United States to receive national 
or most-favored-nation treatment; or 
‘‘(2) a trade served only by controlled carriers. 
‘‘CHAPTER 409—OCEAN TRANSPORTATION 
INTERMEDIARIES
‘‘Sec. 
‘‘40901.
License requirement. 
‘‘40902.
Financial responsibility.
H. R. 1442—54
‘‘40903.
Suspension or revocation of license. 
‘‘40904.
Compensation by common carriers.
‘‘§ 40901. License requirement 
‘‘(a) IN GENERAL.—A person in the United States may not 
act as an ocean transportation intermediary unless the person 
holds an ocean transportation intermediary’s license issued by the 
Federal Maritime Commission. The Commission shall issue a 
license to a person that the Commission determines to be qualified 
by experience and character to act as an ocean transportation 
intermediary. 
‘‘(b) EXCEPTION.—A person whose primary business is the sale 
of merchandise may forward shipments of the merchandise for 
its own account without an ocean transportation intermediary’s 
license. 
‘‘§ 40902. Financial responsibility 
‘‘(a) IN GENERAL.—A person may not act as an ocean transpor-
tation intermediary unless the person furnishes a bond, proof of 
insurance, or other surety—
‘‘(1) in a form and amount determined by the Federal 
Maritime Commission to insure financial responsibility; and 
‘‘(2) issued by a surety company found acceptable by the 
Secretary of the Treasury. 
‘‘(b) SCOPE OF FINANCIAL RESPONSIBILITY.—A bond, insurance, 
or other surety obtained under this section—
‘‘(1) shall be available to pay any penalty assessed under 
section 41109 of this title or any order for reparation issued 
under section 41305 of this title; 
‘‘(2) may be available to pay any claim against an ocean 
transportation intermediary arising from its transportation-
related activities—
‘‘(A) with the consent of the insured ocean transpor-
tation intermediary and subject to review by the surety 
company; or 
‘‘(B) when the claim is deemed valid by the surety 
company after the ocean transportation intermediary has 
failed to respond to adequate notice to address the validity 
of the claim; and 
‘‘(3) shall be available to pay any judgment for damages 
against an ocean transportation intermediary arising from its 
transportation-related activities, if the claimant has first 
attempted to resolve the claim under paragraph (2) and the 
claim has not been resolved within a reasonable period of 
time. 
‘‘(c) REGULATIONS
ON COURT JUDGMENTS.—The Commission 
shall prescribe regulations for the purpose of protecting the interests 
of claimants, ocean transportation intermediaries, and surety 
companies with respect to the process of pursuing claims against 
ocean transportation intermediary bonds, insurance, or sureties 
through court judgments. The regulations shall provide that a judg-
ment for monetary damages may not be enforced except to the 
extent that the damages claimed arise from the transportation-
related activities of the insured ocean transportation intermediary, 
as defined by the Commission. 
‘‘(d) RESIDENT AGENT.—An ocean transportation intermediary 
not domiciled in the United States shall designate a resident agent
H. R. 1442—55
in the United States for receipt of service of judicial and administra-
tive process, including subpoenas. 
‘‘§ 40903. Suspension or revocation of license 
‘‘(a) FAILURE TO MAINTAIN QUALIFICATIONS OR TO COMPLY.—
The Federal Maritime Commission, after notice and opportunity 
for a hearing, shall suspend or revoke an ocean transportation 
intermediary’s license if the Commission finds that the ocean 
transportation intermediary—
‘‘(1) is not qualified to provide intermediary services; or 
‘‘(2) willfully failed to comply with a provision of this part 
or with an order or regulation of the Commission. 
‘‘(b) FAILURE TO MAINTAIN BOND, PROOF OF INSURANCE, OR 
OTHER SURETY.—The Commission may revoke an ocean transpor-
tation intermediary’s license for failure to maintain a bond, proof 
of insurance, or other surety as required by section 40902(a) of 
this title. 
‘‘§ 40904. Compensation by common carriers 
‘‘(a) CERTIFICATION OF LICENSE AND SERVICES.—A common car-
rier may compensate an ocean freight forwarder for a shipment 
dispatched for others only when the ocean freight forwarder has 
certified in writing that it holds an ocean transportation 
intermediary’s license (if required under section 40901 of this title) 
and has—
‘‘(1) engaged, booked, secured, reserved, or contracted 
directly with the carrier or its agent for space aboard a vessel 
or confirmed the availability of the space; and 
‘‘(2) prepared and processed the ocean bill of lading, dock 
receipt, or other similar document for the shipment. 
‘‘(b) DUAL COMPENSATION.—A common carrier may not pay 
compensation for services described in subsection (a) more than 
once on the same shipment. 
‘‘(c) BENEFICIAL INTEREST SHIPMENTS.—An ocean freight for-
warder may not receive compensation from a common carrier for 
a shipment in which the ocean freight forwarder has a direct 
or indirect beneficial interest. A common carrier may not knowingly 
pay compensation on that shipment. 
‘‘(d) LIMITS ON AUTHORITY OF CONFERENCE OR GROUP.—A con-
ference or group of two or more ocean common carriers in the 
foreign commerce of the United States that is authorized to agree 
on the level of compensation paid to an ocean freight forwarder 
may not—
‘‘(1) deny a member of the conference or group the right, 
upon notice of not more than 5 days, to take independent 
action on any level of compensation paid to an ocean freight 
forwarder; or 
‘‘(2) agree to limit the payment of compensation to an 
ocean freight forwarder to less than 1.25 percent of the aggre-
gate of all rates and charges applicable under a tariff and 
assessed against the cargo on which the services of the ocean 
freight forwarder are provided. 
‘‘CHAPTER 411—PROHIBITIONS AND PENALTIES
‘‘Sec. 
‘‘41101.
Joint ventures and consortiums. 
‘‘41102.
General prohibitions.