Skip to main content

Maritime Law: FMC Proposes New Rules for OTIs--Have You Made Your Views Known?

On May 31, 2013, the United States Federal Maritime Commission ("FMC") issued proposed rulemaking, significantly affecting the licensing, financial responsibility and duties of Ocean Transportation Intermediaries ("OTI"). The rulemaking started a 60-day notice and comment period, ending July 31, 2013, during which affected or interested parties can provide feedback, objections and other comments to the proposed rule. The proposed new rules impose significant new conditions and alter the regulatory environment and risks for OTIs.
Licensing
Under current regulations, an OTI license is for an unlimited term. Under the proposed rules, OTI licenses would have to be renewed every two years. Renewal applications would have to be submitted at least 60 days prior to the expiration date, and would include Qualifying Individual (QI) identification and contact information along with changes to the OTI's business or organization, trade names, tariff publication, physical address and electronic contact data.
Experience requirements for QIs are expanded and are stated in more detail than before. Under current regulations, an OTI's license may be revoked for failing to respond to a lawful order, making false or misleading statements or failing to have a current tariff or bond. The proposed new rules add that an OTI's license may be revoked for processing, booking, accepting or transporting cargo for the account of an NVOCC with knowledge that said NVOCC is not licensed or registered.
The Commission also proposes to streamline the appeals process for any license revocation by eliminating an OTI’s right for a full evidentiary hearing. Instead, the FMC proposes to establish a procedure by which appeals could be handled by a hearing officer on a written record without any apparent right of discovery concerning matters that may be in the FMC’s files.
Financial Responsibility
Financial responsibility levels also increase with the new rules:
  • Ocean Freight Forwarders: from $50,000 to $75,000
  • NVOCCs: from $75,000 to $100,000
  • Registered (foreign) NVOCCs: from $150,000 to $200,000
However, the FMC would eliminate the $10,000 additional bonding required for each unincorporated branch office. The proposed new rules also establish three payment priority tiers for claims against an OTI bond, with shipper and consignee claims given priority over common carriers, ports, terminals and other third-party creditors.
Foreign NVOCCs
Under current regulations, foreign NVOCCs without a physical presence in the United States may operate in U.S. trades without a license if they: (1) file a Form FMC-1; (2) establish a bond of $150,000; and (3) publish an ocean tariff. Under the proposed new rules, a licensed foreign-based NVOCC must establish a U.S. office qualified to do business in the state and operated by a bona fide employee. The registered NVOCC must use a licensed OTI as its agent and registrations must be renewed every two years.
Comments Currently Requested
Given the effects of the new rules, industry participants are strongly encouraged to provide comments. Non-confidential comments must be submitted to the FMC no later than July 31, 2013. Such comments may be submitted confidentially if they are clearly marked as such on each page. After reviewing the comments submitted, the FMC will issue a revised final rule, as well as an effective date for all changes and new requirements.
The proposed rule can be viewed here => OTI Proposed Rulemaking. If you are unable to access the link, if your business is impacted by these new proposed regulations, if you are interested in submitting comments or understanding how these new proposed regulations will affect your operations, please feel free to contact me at mov@chaloslaw.com. 

Comments

Post a Comment

Popular posts from this blog

ReThink + ReUse Center "It's How We Roll" Fun Raiser -- Bowling Night -- October 16, 2014

As many of my readers may be aware, I am the Chair of the ReThink + ReUse Center, a non-for-profit educational and environmental Center in Miami educating children into rethinking reuseable materials for learning through play. The ReThink and ReUse Center’s Quality Play is Learning Program provides a series of educational and participatory workshops based on the philosophies of Reggio Emilia and Harvard's Project Zero Visible Thinking. The Children’s Trust is the major funder of this program, but the Center is required to continually fundraise for the balance its annual budget.   The Center is having a fun event you are invited to--the ReThink + Reuse Center’s “It’s How We Roll” bowling event on October 16, 2014 at Splitsville Luxury Lanes from 18:00 to 21:30 hours. My firm, Comcast and Waste Management are major sponsors for this event, but we could use a few more sponsors. If you are interested in sponsoring the event, please let me know by reaching me at mov@chalos...
6 comments
Read more

Maritime Law--Florida's Arbitration Code Is Now Revised

Those of us that practice maritime law regularly must always be on the lookout for the contract that may contain an arbitration clause. Thus, any laws related to arbitration are important to those of us practicing in this sector.       The Florida legislature has revised the Florida Arbitration Code ("FAC") and named it the Revised Florida Arbitration Code (the " Revised Act"). Since 1967, the FAC had gone mostly unchanged. The Revised Act addresses concepts that were not addressed in the old law, such as the ability of arbitrators to issue provision remedies, challenges based on notice, consolidation of separate arbitration proceedings, required conflict disclosures by arbitrators, among other major changes. The Revised Act lays out a detailed framework for international arbitration conducted under Florida law and repeals sections of the FAC. The Revised Act spells out what experienced arbitrators knew the case law to be, but codifies it all in one pl...
4 comments
Read more

Maritime Law--Lozman Case Revisited in Miami?

In Hoefling v. City of Miami , Case no.: 14-12482 (11th Cir. Jan. 25, 2016), the U.S. Court of Appeals for the Eleventh Circuit revived almost all of Hoefling's claims. You ask, "Who is Hoefling?" Hoefling  lived on his sailboat Metis O moored off Dinner Key for nearly a decade—until the day he came home and it was gone. About three months earlier, an officer from the Miami Police Department's Marine Patrol Detail tagged Hoefling's vessel for lacking a sanitary device and a working anchor light. He had a deal to use the facilities at the nearby marina but quickly went out and reportedly bought what he needed to comply. Three months later while he was on a business trip, the City of Miami seized and destroyed his boat and all his belongings. As a result, he was homeless. He sued under § 1983, maritime law, and state law. He stated a claim under the Fourth Amendment for seizure and destruction without notice or cause and a “taking.”    At the ...
5 comments
Read more