§ 282.10 - Basis for determining foreign-flag competition.

The foreign-flag competition shall form the basis for determining the cost disadvantage of operating the subsidized vessels in the essential service. The Maritime Administrator shall determine the foreign-flag competition from those countries that have carried a significant amount of cargo in the service by using the following procedures:

(a) The primary source of information shall be commodity import/export data compiled by the Bureau of the Census. Cargo data shall be compiled in long tons. Trade publications which show advertised sailings shall be used to verify the liner services offered by foreign-flag operators.

(b) The U.S. import/export data shall be compiled by reference to countries actually served by the subsidized operator, using the subsidized operator's own competition data for each country to eliminate the flags which are not substantial competitors with the subsidized vessels. An example of the weighting procedure follows:

Example

	Country A	Country B	Country C	Total
I. Determination of U.S.-Flag Weights:
U.S. Subsidized Carrier	300	500	200	1,000
Percent	30	50	20	100
II. Actual Foreign-Flag Carryings:
Flag 1	1,500	500	1,000	3,000
Flag 2	4,000	6,000	0	10,000
Flag 3	5,000	2,000	5,000	12,000
III. Adjusted Foreign-Flag Carrying (Actual Foreign × U.S. wts):
Flag 1	450	250	200	900
Flag 2	1,200	3,000	0	4,200
Flag 3	1,500	1,000	1,000	3,500
				8,600
IV. Competition Computation:		Actual percent		Re-weight (percent)
Flag 2	4200/8600	49.0		55.0
Flag 3	3500/8600	41.0		45.0
		90.0		100.0

(c) The principal foreign flags shall be those countries whose cargo carrying would rank the flag among those carriers that aggregate at least 50 percent of the total foreign-flag carryings.

(d) The total cargo carryings of each principal foreign flag shall be expressed as a percentage of total cargo carryings of all principal flags on the service. The resultant ratio shall be applied to the costs of that principal flag for determining its portion of the composite foreign cost, which shall be used for establishing the cost disadvantage of U.S. vessels in the service.

(e) The determination of the principal competitors and competition weight factors shall be based upon the import/export data for the twelve months of the penultimate calendar year preceding January 1 of the subsidized year to allow several months to collect foreign cost data.