FMC Publishes List of Controlled Carriers

The Federal Maritime Commission is publishing an updated list of controlled carriers. Section 3(8) of the Shipping Act of 1984 (“Shipping Act”), 46 U.S.C. app. § 1702(3), defines a "controlled carrier" as: an ocean common carrier that is, or whose operating assets are, directly or indirectly, owned or controlled by a government; ownership or control by a government shall be deemed to exist with respect to any carrier if-- (A) a majority portion of the interest in the carrier is owned or controlled in any manner by that government, by any agency thereof, or by any public or private person controlled by that government; or (B) that government has the right to appoint or disapprove the appointment of a majority of the directors, the chief operating officer, or the chief executive officer of the carrier. As required by the Shipping Act, controlled carriers are subject to special oversight by the Commission. Section 9(a) of the Shipping Act, 46 U.S.C. app. § 1708(a), states, in part: No controlled carrier subject to this section may maintain rates or charges in its tariffs or service contracts, or charge or assess rates, that are below a level that is just and reasonable, nor may any such carrier establish, maintain, or enforce unjust or unreasonable classifications, rules, or regulations in those tariffs or service contracts. An unjust or unreasonable classification, rule, or regulation means one that results or is likely to result in the carriage or handling of cargo at rates or charges that are below a just and reasonable level. The Commission may, at any time after notice and hearing, prohibit the publication or use of any rates, charges, classifications, rules, or regulations that the controlled carrier has failed to demonstrate to be just and reasonable. Congress enacted these protections to ensure that controlled carriers, whose marketplace decision making can be influenced by foreign governmental priorities or by their access to non-market sources of capital, do not engage in unreasonable below-market pricing practices which could disrupt trade or harm privately-owned shipping companies. The controlled carrier list is not a comprehensive list of foreign-owned or -controlled ships or shipowners; rather, it is only a list of ocean common carriers (as defined in section 3(16) of the Shipping Act) that are owned or controlled by governments. Thus, tramp operators and other non-common carriers are not included, nor are non-vessel-operating common carriers, regardless of their ownership or control. Nine previously classified controlled carriers have been declassified since the list was last issued on September 21, 2000 (65 Fed. Reg. 58086)(Sept. 27, 2000) for various reasons. Some have ceased operating as ocean common carriers in the U.S. trades, others have gone out of existence altogether. There is one new addition to the list. Black Sea Shipping Company (Ukraine), Polish Ocean Lines (Poland), POL-America, Inc. (Poland) and International Transport Enterprise Co. (GETDD) Ltd. (People’s Republic of China) are being removed from the list, as they no longer operate vessels nor conduct any other business in the U.S. foreign trades. Tientsin Marine Shipping Company (People’s Republic of China), Pakistan National Shipping Corporation (Pakistan) and Egyptian Navigation Company (d/b/a Egyptian National Line) (Egypt) are being removed from the list, as they no longer operate vessels in the U.S. foreign trades, although they do appear to continue to operate as non-vessel-operating common carriers (“NVOCCs”) in the U.S. foreign trades. China National Foreign Trade Transportation (Group) Corp. (d/b/a Sinotrans)(People’s Republic of China) is also being removed from the list as this entity no longer does business in the U.S.-foreign trades, and accordingly, all tariffs in U.S.-foreign trades have been cancelled effective February 28, 2003. Finally, although never appearing on a list published in the Federal Register, Shanghai Hai Hua Shipping Co., Ltd. (d/b/a HASCO) had been classified by the Commission as a controlled carrier on January 7, 2002. The Commission is now removing this classification, as HASCO operates no vessels in the U.S. foreign trades. The single new addition to the list is Sinotrans Container Lines Co., Ltd. (d/b/a Sinolines)(RPI No. 017703). Sinolines informed the Commission of its controlled carrier status by letter to the Commission’s Secretary on June 26, 2002, as required by 46 C.F.R. § 565.4.