Thursday, September 29, 2016

Another Tranche of Fines for Freight Forwarders and Ocean Cargo Carriers

Various Alleged Frauds and Irregularities Net the FMC More Cash
Shipping News Feature
US – The Federal Maritime Commission (FMC) has recovered a total of $338,000 in civil penalties after completing several compromise agreements with various ocean freight companies. The agreed penalties resulted from investigations conducted by the Commission’s Area Representatives from around the country, and settlements with the parties involved, namely six ocean transportation intermediaries (both non-vessel-operating common carriers (NVOCCs) and freight forwarders). As so often happens with these cases the parties settled and agreed to penalties, but did not admit to violations of the Shipping Act or Commission regulations. FMC Chairman Mario Cordero said:

“These agreements and penalties reflect the continuous efforts of the Commission’s Area Representatives and Bureau of Enforcement to level the regulatory playing field for all segments of the maritime industry, guard against unfair trade practices, and ensure that the shipping public is served by qualified ocean transportation intermediaries. It is through the hard work of our staff that the Commission seeks to achieve our mission of fostering a fair, efficient and secure maritime transportation system."

The compromise agreements are:

Posey International (Posey) – a licensed and bonded non-vessel-operating common carrier (NVOCC) and ocean freight forwarder based in Spring, Texas. Commission staff alleged that Posey continued operating without a valid Qualifying Individual for a period in excess of one year. Posey made a payment of $22,000 in compromise of these allegations.

King Ocean Services – a vessel-operating common carrier located in Miami, Florida. It was alleged that King Ocean provided service to its shipper customers pursuant to rates and charges in various service contracts and corresponding amendments that were not timely filed with the Commission. Under the terms of the compromise agreement, King Ocean paid $50,000 in penalties.

CL USA – a licensed and bonded NVOCC and ocean freight forwarder located in Medley, Florida. Commission staff alleged that CL USA operated without a valid Qualifying Individual for a period in excess of one year. CL USA paid $22,500 in compromise of these allegations.

Carlo Shipping International d/b/a CSI Logistics – a licensed ocean transportation intermediary located in Elizabeth, New Jersey. It was alleged that CSI Logistics knowingly and wilfully accepted cargo for ocean transportation from unlicensed NVOCCs and also provided transportation that was not in accordance with the rates and charges set forth in its NVOCC tariff. CSI Logistics made a monetary payment of $32,500 in compromise of these allegations.

Sino Connections Logistics – a registered NVOCC based in Kowloon, Hong Kong, China. Commission staff alleged that Sino Connections obtained ocean transportation of property at rates and charges that were less than would be otherwise applicable by improperly utilising rates limited to certain named accounts in one of its service contracts. It was also alleged that Respondent provided transportation in the liner trade that was not in accordance with the rates and charges contained in its NVOCC tariff. Pursuant to the terms of its compromise agreement, Sino Connections paid a penalty of $90,000.

Baron Worldwide – a licensed and bonded ocean freight forwarder located in Centennial, Colorado. It was alleged that Baron Worldwide operated without a Qualifying Individual for a period in excess of one year. Respondent paid a penalty of $21,000 in compromise of these allegations.

China International Freight – based in Taipei, Taiwan, is a tariffed and bonded NVOCC registered with the Commission. Commission staff alleged that China International obtained ocean transportation at less than rates and charges that would be otherwise applicable by improperly utilising rates and charges limited to specific named accounts in its service contracts. China International also provided transportation that was not in accordance with the rates and charges published in its NVOCC tariff. Under the terms of the compromise, China International made a monetary payment of $100,000.