NCBFAA Notice: FMC Issues Proposed Rulemaking Affecting All OTIs As discussed recently in the Monday Morning eBriefing, in reviewing the FMCs NPRM on the OTI regulations it is clear that the agency took to heart many of our criticisms and backed away from a large number of the proposals that had previously been advanced in the Advance Notice of Proposed Rulemaking (ANPRM). So, the new NPRM contains several positive changes, but also includes a number of items that raise concerns for NVOCCs and ocean forwarders. Although the NCBFAA will file its formal Comments, the fact that the FMC received a large number of comments from NCBFAA members concerning the ANPRM was very helpful in getting the agency to focus on the problems that the proposal would cause. So, the Association suggests that members consider submitting their own comments in this important rulemaking. To assist in that process, we have prepared this draft of a form of a template with suggested format that would hopefully be useful to companies who do wish to submit their own comments. Again, the NCBFAA strongly recommends that members consider filing their own comments. Although you should review the entire NPRM, the following is a brief discussion of some of the major points that you may wish to also address: • First, the original proposal to require all OTIs to provide updated corporate information through a license renewal process every two years and to pay a filing fee has been pared back, so that there would be no fee and the renewal would be every 3rd year, rather than every two years. This still raises several important issues that are worthy of comment. Initially, while some OTIs may not have been great in timely providing the FMC with notice of corporate officer, QI and address changes, that is not the case with all companies and, in any event, there are existing regulations that can be enforced to encourage better compliance. More importantly, your FMC licenses do not have term limits and can be suspended or revoked only for limited, extraordinary reasons. But, if converted to limited terms as originally proposed in the ANPRM and repeated here, the agency could refuse to issue a renewal for a variety of reasons, including the mere pendency of some enforcement case. While that may not have been what the Commission intended, that is a real possibility under any license renewal regime. As licenses are not issued today if an applicant has pending issues with BOE, this proposed policy could well interfere with license renewals - which would be a significant problem for any company in that situation. As the NCBFAA suggested in its ANPRM Comments, even if it is necessary to have a new regulation to improve the process of getting updated information for the Commissions records, this could be done far more simply by requiring OTIs to provide updated information every third year in response to an email request from the Commission; that would not jeopardize any license renewal. So, rather than bogging down the FMCs BCL staff any further, it makes sense for the FMC to simply establish a triennial report, so that each licensee would provide updated corporate information on line through some portal without worrying about any license renewals. • Second, the FMC proposes to eliminate the need for additional bonding for all branch offices. The Association suspects that this is not a problem for your company, so that you might wish to support that. • Third, although the Commission did agree to drop most of the proposals that related to agents and advertising, the NPRM still contains proposed restrictions on advertising that may be somewhat problematic. As drafted, the proposed new regulation at section 515.31(j) prohibits anyone from holding out to provide OTI service unless it is licensed. Since NVOCCs and forwarders necessarily use many types of third parties to provide some of the required services (consolidation, break bulk, transportation, etc.), read literally this could be construed as prohibiting those companies from doing any advertising. Accordingly, if any new regulation is necessary, it should be amended so that it only applies to companies that are holding out to provide the complete OTI service rather than when they act as a service provider for OTIs. • Fourth, the NPRM still would require sureties to provide notice of any claims or lawsuits that are pending against OTIs. It is unclear why the Commission feels a need for this, at least with respect to regular commercial OTIs (as opposed to the HHG barrel trade firms). The NPRM does not explain why the agency wants the information or whether it will be treated as confidential and protected from release. If you believe that the release of this type of information could be improperly used in the market place, you might want to address this issue as well. • Fifth, in prior filings with the FMC, the NCBFAA suggested that the Commission eliminate the need for forwarders to issue certifications to the carriers of their entitlement to forwarder compensation. The NPRM would make the certification somewhat easier by permitting it to be done electronically. Nonetheless, as it is not clear that any purpose is served by this process any longer, you may wish to comment about this and support elimination of the certification requirement. A copy of the NPRM is available on the FMCs website, and was also posted on the NCBFAA website. They also appear in the 10/10/14 edition of the Federal Register, at P. 61544. Obviously, individual companies can file their own comments as well, but any comments are due on or before December 12, 2014. Comments can either be filed via email or via mail addressed to Karen Gregory, Secretary; Federal Maritime Commission; 800 North Capitol Street, NW; Washington, DC 20573. In either case, please make sure to show the docket number (Docket No. 13-05) and the title (Ocean Transportation Intermediary Licensing and Financial Responsibility Requirements, and General Duties) in the reference line. If you have any questions, please let us know at the NCBFAA headquarters.
Posted on: Mon, 10 Nov 2014 15:02:56 +0000
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