Thursday, June 11, 2015

NVOCCs and Ocean Freight Forwarding and Logistics Companies Fined Heavily for Bribery and Corruption

(They All Agreed to Pay Up - Although of Course Denying All Charges)
Shipping News Feature

US – CHINA – WORLDWIDE – The Federal Maritime Commission (FMC) has recovered a total of $430,000 in civil penalties after completing several separate compromise agreements with various ocean freight companies. The agreed penalties resulted from investigations conducted by the Commission’s Area Representatives from around the country. The parties, seven non-vessel-operating common carriers (NVOCCs) and freight forwarders, settled and agreed to penalties, but did not admit to violations of the Shipping Act or the Commission’s regulations. Chairman Cordero stated:

"Fraud and commercial deception in the international shipping marketplace must be found and vigorously dealt with. These settlement agreements and the penalties collected demonstrate that the Commission remains committed to the difficult task of detecting threats to cargo security and the shipping public, both in the US and in locations abroad."

The habit of taking the punishment whilst denying the crime has become quite the fashion amongst those accused in the world of shipping and logistics, as a glance through any of our previous similar stories will reveal. The compromise agreements are as follows:

Blue Cargo Group LLC, trading as Blu Logistics – a licensed NVOCC and freight forwarder headquartered in Miami, Florida. It was alleged that Blue Cargo violated section 10(b)(1) of the Shipping Act by knowingly and wilfully remitting monetary compensation to the Transportation Manager of its largest shipper-customer. Blue Cargo made a payment of $105,000 to settle these allegations.

Unipac Shipping – a licensed and bonded NVOCC and freight forwarder based in Diamond Bar, California. Commission staff alleged that Unipac Shipping violated section 10(a)(1) by obtaining transportation at less than applicable rates by means of accessing service contracts to which Unipac Shipping was not a party; Unipac Shipping also violated section 10(b)(2) by providing transportation other than in accordance with the rates and charges in its published tariff. Unipac Shipping paid $75,000 in compromise of these allegations

Hughes International – a licensed and bonded NVOCC and freight forwarder with offices in Clark, New Jersey. It was alleged that Hughes International violated section 10(a)(1) by obtaining transportation at less than applicable rates by means of improperly allowing third parties to access service contracts to which Hughes was the contract signatory, and by misdescribing commodities under certain service contracts. Under the terms of the compromise, Hughes International paid $75,000.

JHJ International – a tariffed and bonded NVOCC located in Shanghai, China. Commission staff alleged that JHJ International violated section 10(a)(1) by knowingly and wilfully obtaining transportation at less than applicable rates by misrepresenting the names of shipper accounts under certain service contracts; and that JHJ International also violated section 10(b)(2)(A) by providing transportation other than in accordance with the rates and charges in its published tariff. JHJ International made a payment of $65,000 in compromise of these allegations.

CTS International – a tariffed and bonded NVOCC located in Shanghai. It was alleged that CTS International violated section 10(a)(1) by obtaining transportation at less than applicable rates by means of accessing service contracts to which CTS International was not a party; and that CTS International also violated section 10(b)(2)(A) by providing transportation other than in accordance with the rates and charges in its published tariff. Under the terms of the compromise, CTS International paid $50,000.

Ri-Time Logistic – a licensed NVOCC located in City of Industry, California. Commission staff alleged that Ri-Time Logistic violated section 10(a)(1) by knowingly and wilfully obtaining transportation at less than applicable rates by means of misdescribing commodities and misdeclaring the names of shipper accounts under certain service contracts. Under the terms of the compromise, Ri-Time Logistic paid $35,000.

C.H. Robinson Project Logistics – a licensed and bonded freight forwarder located in Houston, Texas. It was alleged that C.H. Robinson Project Logistics continued operating as an ocean transportation intermediary without a valid Qualifying Individual for more than one year. C.H. Robinson Project Logistics made a payment of $25,000 in compromise of this allegation.