FMC Collects $1,227,500 in Penalties from NVOCC's

Federal Maritime Commission Chairman Mario Cordero announced that the Commission has completed compromise agreements recovering a total of $1,227,500 in civil penalties.

 

The agreements were reached with seven non-vessel-operating common carriers (NVOCCs) and one vessel-operating common carrier (VOCC). The agreed penalties resulted from investigations conducted by the Commission’s Area Representatives in New York and Seattle, and headquarters staff in Washington D.C. The parties settled and agreed to penalties, but did not admit to violations of the Shipping Act or the Commission’s regulations.

In making the announcement, Chairman Mario Cordero stated: "I commend the staff at FMC in fulfilling their responsibility to protect the American shipping public from entities who may be in breach of the Shipping Act. The compromise agreements demonstrate how serious we are about protecting the international shipping marketplace from fraud and threats to cargo security, and in our commitment to shield the many lawful participants in international trade from commercial deception and other unlawful trading practices."

The compromise agreements are as follows:

United Arab Shipping Company (S.A.G.)
United Arab Shipping Company, also known as UASC, is a VOCC based in Dubai, U.A.E. It was alleged that UASC violated 46 U.S.C. 41104(1) by unlawfully rebating to its NVOCC customer, Falcon Maritime and Aviation Inc., a portion of the applicable service contract rate in the form of an administrative fee not identified in the service contract, and for which no services were provided. UASC also violated 46 U.S.C. 41104(2) by providing transportation not in accordance with the rates and charges in its published tariff. Under the terms of the compromise, UASC paid $537,500 to the Commission.

City Ocean Logistics Co., Ltd., City Ocean International, Inc., and CTC International Inc.
City Ocean Logistics Co., Ltd. is a bonded NVOCC located in Shenzhen, China; City Ocean International is a licensed NVOCC and freight forwarder based in Diamond Bar, California; and CTC International is a licensed NVOCC and freight forwarder co-located with City Ocean International in Diamond Bar, CA. Commission staff alleged that City Ocean Logistics and City Ocean International knowingly and willfully obtained ocean transportation for property at less than the rates and charges that would otherwise be applicable by improperly utilizing rates limited to certain "named accounts" in service contracts, and through the collection of forwarder compensation on export shipments in which City Ocean Logistics acted as NVOCC.

In addition, CTC International unlawfully collected forwarder compensation on shipments in which City Ocean Logistics, City Ocean International and/or CTC International had a beneficial interest. City Ocean Logistics, City Ocean International and CTC International also provided transportation in the liner trade that was not in accordance with the rates and charges set forth in their published tariffs. In addition to surrendering the ocean transportation intermediary (OTI) license of CTC International, Respondents made a payment of $325,000 in compromise of these allegations.

Oriental Logistics Group Limited
Oriental Logistics Group is a tariffed and bonded NVOCC located in Taipei, Taiwan. Commission staff alleged that Oriental Logistics Group violated 46 U.S.C. 41102(a) by knowingly and willfully obtaining transportation at less than applicable rates by misrepresenting the names of shipper accounts under one of its service contracts, and by misdescribing cargo under such contract. Oriental Logistics Group also violated 46 U.S.C. 41104(2) by providing transportation not in accordance with the rates and charges in its published tariff. Respondent made a payment of $100,000 in compromise of these allegations.

Hyundai Logistics (USA) Inc.
Hyundai Logistics (USA) is a tariffed and bonded NVOCC and freight forwarder located in La Mirada, CA. Commission staff alleged that Hyundai Logistics (USA) violated 46 U.S.C. 41102(a) by knowingly and willfully obtaining transportation at less than applicable rates by means of improperly allowing third parties to access service contracts to which Hyundai Logistics (USA) was the contract signatory. Under the terms of the compromise, Respondent made a payment of $100,000.

Falcon Maritime and Aviation Inc.
Falcon Maritime and Aviation is a licensed NVOCC based in Jamaica, NY. It was alleged that Falcon Maritime and Aviation violated 46 U.S.C. 41102(a) by unlawfully obtaining rebates from a VOCC of a portion of the applicable service contract rate in the form of an administrative fee not identified in the service contracts of United Arab Shipping Company, and for which no services were provided. Under the terms of the compromise, Falcon Maritime and Aviation paid $85,000 to the Commission.

Sea Gate Logistics Inc.
Sea Gate Logistics is a licensed NVOCC and freight forwarder based in Valley Stream, NY. Commission staff alleged that Sea Gate Logistics violated 46 U.S.C. 41102(a) by knowingly and willfully obtaining transportation at less than applicable rates by means of improperly obtaining access to service contracts to which Sea Gate Logistics was not the contract signatory. Sea Gate also violated 46 U.S.C. 41104(2) by providing transportation not in accordance with the rates and charges in its published tariff. Under the terms of the compromise, Sea Gate Logistics made a payment of $80,000.