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Sunday, January 21, 2018

Financial Responsibility News

FMC Grants PVO Reimbursement Decrease

Commissioner Richard A. Lidinsky, Jr.

The Federal Maritime Commission (FMC) granted a passenger vessel operator a decrease in the amount of financial responsibility it is required to maintain to reimburse passengers when an operator fails to perform cruises as contracted. The Federal Maritime Commission has granted the request of a passenger vessel operator (PVO) for partial relief from its financial responsibility requirements used to reimburse passengers when a PVO fails to perform cruises as contracted. This is the first request granted to a PVO since the Commission updated its regulations in 2013.

FMC Grants Chinese Petitions

The Federal Maritime Commission (FMC) issued a Press Release stating that it granted the petitions of three Chinese controlled carriers for relief from the 30-day waiting requirement for reduction of tariff rates. The FMC also issued a Final Rule amending its regulations governing financial responsibility to permit licensed NVOCCs, at their option, to file proof of additional financial responsibility as an alternative to meet a Chinese requirement to demonstrate financial responsibility for NVOCCs operating in China. The Final Rule will be effective upon its publication in the Federal Register. Finally, the FMC is soliciting comments from those involved in maritime trade with China regarding shipping restrictions…

Optional rider for proof of additional NVOCC financial responsibility

The Federal Maritime Commission (FMC) issued a Notice of Proposed Rulemaking (NPRM) that would, if adopted, provide for an optional rider for proof of additional financial responsibility for non-vessel-operating common carriers (NVOCCs). This rulemaking was undertaken at the request of the National Customs Brokers and Forwarders Association of America (NCBFAA) in order to accommodate a new requirement of the Chinese government that NVOCCs operating in that country maintain financial responsibility in a different manner than currently provided for in the United States. Comments on the proposal should be submitted by February 20, 2004. (Source: HK Law)

Alaska Increases COFR Levels

The Alaska Department of Environmental Conservation issued New Financial Responsibility Dollar Amounts for oil spills. The increased levels for which owners and operators of vessels operating in Alaska waters must provide evidence of financial responsibility to obtain COFRs come into effect on October 27, 2002. The levels have been increased by 33.4% over the prior level. Source: HK Law

FMC Issues Vessel Financial Responsibility Proposal

The Federal Maritime Commission (FMC) issued a Notice of Proposed Rulemaking (NPRM) that would, if adopted, eliminate the current ceiling on required coverage of financial responsibility for nonperformance, adjust the amount of coverage required by providing for consideration of obligations of credit card issuers, provide for use of alternative dispute resolution, revise the application form, and make a number of technical adjustments to the Performance and Casualty regulations. Comments should be submitted by January 8, 2003. Source: HK Law

Comment Period for Financial Responsibility Extended

The U.S. Federal Maritime Commission (FMC) has extended the comment period on its proposal regarding passenger vessel financial responsibility until May 30, 2003. The FMC will also hold a public meeting to receive oral comments, with the date to be announced in a subsequent Notice. Closed-door meetings with individual Commissioners may also be requested. Summaries or transcripts of oral presentations will be included in the record.

FMC Amends Financial Responsibility Regulations

The Federal Maritime Commission (FMC) has amended its rules on passenger vessel financial responsibility for nonperformance of transportation by eliminating the availability of self-insurance, limiting guarantees to those Protection and Indemnity Associations approved by the Commission, and discontinuing the existing sliding scale formula for determining the amount of coverage required. The changes come into effect on August 5, 2002.

San Pedro Fuel Distributor Assumes Responsibility for Harbor Cleanup

The Jankovich Company, a San Pedro, Calif. based fuel and lubricant distributor, assumed financial responsibility of the estimated 210-gallon Los Angeles Harbor fuel spill clean up. The Coast Guard and California Department of Fish and Game, Office of Spill Prevention and Response will continue to monitor recovery operations being conducted by Patriot Environmental Services. The clean up is expected to be completed by Wednesday afternoon. Under the Federal Water Pollution Control Act, assuming financial responsibility is not an admission of fault. The actual source and cause of the fuel spill remains under investigation.

California Delays New Regs Implementations

The date for compliance with new California State regulations for contingency plans and certificates of financial responsibility (COFR) for non-tank vessels, originally set for September 1, has been delayed by the state's Office of Spill Prevention and Response (OSPR). OSPR Administrator Gary Gregory said while the regulations were expected to be finalized soon after the September 1 deadline, the non-tank vessel industry will be given 30 days to comply after the regulations are approved by the Office of Administrative Law and filed with the Secretary of State. The regulations require non-tank barges carrying any quantity of fuel or oil used to operate onboard equipment and machinery to file certificates of financial responsibility and vessel contingency plans.

The COFRs are Coming

Two Coast Guard small boats set a security zone around the 900-foot container ship Cosco Busan. (U.S. Coast Guard photo)

On February 5, the US Coast Guard promulgated its long-awaited proposal for updating the Certificate of Financial Responsibility (COFR) program. Owners and operators of vessels over 300 gross tons operating in United States waters have been required to provide evidence of financial responsibility to respond to oil spills from their vessels since 1972. The program was significantly broadened with enactment of the Oil Pollution Act of 1990 (OPA 90), which increased the categories of damages for which oil spill liability could attach.

Final Rule for OPA 90 Vessel Financial Responsibility Announced

The Coast Guard published a final rule amending Coast Guard regulations under the Oil Pollution Act of 1990 (OPA 90), in Title 33, Code of Federal Regulations, Part 138, governing requirements for vessel owners and operators to establish and maintain evidence of financial responsibility. The amendments ensure the amounts of financial responsibility that must be demonstrated under the Coast Guard's Certificate of Financial Responsibility program are consistent with increases to the OPA 90 limits of liability by the Delaware River Protection Act of 2006. The amendments also increase the COFR application and certification fees, and eliminate the requirement that an original printed COFR be carried aboard covered vessels.

MARAD – DWP licensing workshop

he Maritime Administration (MARAD) will conduct a Deepwater Port Licensing Workshop in Washington, DC on September 10.  Topics of discussion will include facility security, the role of Adjacent Coastal States, and financial responsibility requirements.

FMC Issues Notice

The Federal Maritime Commission (FMC) has issued a notice stating that an item has been added to the schedule for the closed portion of the FMC meeting on January 30, 2002. The Commission has added consideration of an application of the Delta Queen Steamboat Co. to approve a revised escrow agreement for its passenger vessel certificate of financial responsibility. Source: HK Law

Port Security Hearings Set For Next Week

On March 13, 2002, the Subcommittee on Coast Guard and Maritime Transportation of the House Committee on Transportation and Infrastructure will conduct a hearing on Port Security: Shipping Containers. The next day, it will conduct a hearing on Financial Responsibility for Port Security. Source: HK Law

FMC Revokes Various OTI Licenses

The Federal Maritime Commission (FMC) issued an order revoking the licenses for various ocean transportation intermediaries (OTI) for failure to comply with the financial responsibility requirements of the Shipping Act of 1984. Source: HK Law

WQIS Prepared for COFR Limit Increase

On July 11, 2006 the President signed into law Title VI of the Coast Guard and Maritime Transportation Act of 2006, which increased the limits of liability for vessels under OPA 90. It also split the tank vessel category into single and double hulls with single hulls having higher limits. Those limits went into effect in 2006. However, the requirement for evidence of financial responsibility required to obtain a Certificate of Financial Responsibility (COFR) was not increased at that point. Meaning, existing COFRs remained valid. By a notice in the Federal Register/Vol. 73, No.181/Wednesday, September 17, 2008 the Coast Guard promulgated regulations implementing the new COFR regulations to take effect from January 15, 2009. As of that date, the financial guaranty or insurance to the U.S.

BOEMRE Ups OCSLA and OPA Penalties

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) announced that the maximum civil penalty rate for Outer Continental Shelf Lands Act (OCSLA) violations will increase from $35,000 to $40,000 per day; and from $25,000 to $30,000 per day for Oil Pollution Act (OPA) financial responsibility violations. The increases coincide with adjustments in inflation, as required by OCSLA and OPA. The Obama administration has requested that Congress pass legislation to further raise the maximum civil penalty rates beyond the rate of inflation. “Even with the inflation adjustment, which is the limit of our current regulatory authority, our civil fine authority is inadequate. That view is shared by energy companies operating on the OCS.

HII Promote Tom Stiehle CFO & VP Business Management

Tom Stiehle: Photo credit HII

Responsibility includes:  finance, contracts, estimating & pricing, and business management of Ingall’s Shipbuilding Division. "Tom's extensive background in finance and contract administration forms a solid foundation for this important leadership role," said Ingalls Shipbuilding President Irwin F. Edenzon. In addition to his financial responsibilities, Stiehle will also lead Ingalls' IT function, which includes the internal IT services, IT strategy development and management of the shipyard's subcontract with CSC.

Cummings Hears Testimony on Oil Company Liability

Congressman Elijah E. Cummings (MD-07) took part in a hearing held by the House Transportation and Infrastructure Committee, called to examine the liability requirements for oil spills that are imposed by the Oil Pollution Act of 1990 (OPA) and related statutes on offshore facilities and vessels operating in U.S. waters. The Committee also considered the potential impact on the offshore industry of the liability claims arising from the loss of the Deepwater Horizon in the Gulf of Mexico and the subsequent oil spill from the Macondo well site. To get more information on the issue of both claims and liability caps, Cummings and the Committee also questioned a panel of oil and insurance industry experts, hearing testimony regarding the potential of raising the liability cap.

FMC Seeks Comment on China Matter

FMC considered the petitions of three Chinese controlled carriers for relief from the 30-day waiting requirement for reduction of tariff rates of the Controlled Carrier Act (Petition Nos. P3-99, P4-03 and P6-03). As part of its deliberations, the Commission considered letters from the U.S. Maritime Administrator and the Under Secretary of State for Business, Economics and Agricultural Affairs that discuss commitments made in the recently-concluded bilateral Maritime Agreement between the U.S. and the People’s Republic of China. The Administrator and the Under Secretary urge the Commission to favorably consider the Petitions. The Administrator also indicates that he will encourage U.S. carriers and shippers to support them.

Unified Command Formed to Oversee Clean up in Long Beach Harbor

A unified command comprised of representatives from the U.S. Coast Guard, California Department of Fish and Game Office of Spill Prevention and Response (OSPR) and Paramount Petroleum Corp. was formed to coordinate the recovery and clean up of oil that was released into Long Beach Harbor this morning. An estimated 100-gallons of crude oil was spilled into the water at berth C-55 in the Port of Long Beach. Contractors hired by Paramount Petroleum Corp. have responded and are currently conducting the clean up. Although the source of the original leak is still under investigation, the adjoining storm drain through which the crude oil migrated to the water has been blocked and no additional oil is entering the water. Paramount Petroleum Corp.

Coastal Transportation Pays $412,101 in Fines

prevention laws. required proof of financial responsibility. spilled oil in Dutch Harbor in November 2003. Coastal Transportation, Inc. obtained contingency plan and financial responsibility coverage for its vessels. DEC Commissioner Kurt Fredriksson noted that ¡§Coastal Transportation, Inc. pollution prevention laws. The State intends to maintain an even playing field.

Buzzards Bay Case Remanded for Further Proceedings

The U.S. Court of Appeals for the First Circuit remanded the Buzzards Bay case for further proceedings. Following an oil spill in Buzzards Bay in 2003, the Commonwealth of Massachusetts enacted a law imposing various operational and financial responsibility requirements on tank vessels operating in state waters. The federal government and various maritime industry representatives sought to overturn the state law, arguing that it was (in large part) preempted by federal law. The federal district court, based on the pleadings, permanently enjoined enforcement of the state law. In a 54-page decision, the appellate court determined that the permanent injunction is premature since the state may be able to fashion a regime that does not conflict with the federal regime.

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