[Federal Register Volume 62, Number 47 (Tuesday, March 11, 1997)]
[Notices]
[Pages 11198-11199]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6038]
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FEDERAL MARITIME COMMISSION
[Docket No. 97-04]
Ever Freight International Ltd., Sigma Express Inc., and Mario F.
Chavarria dba Transcargo Intl.--Possible Violations of Sections
10(a)(1) and 10(b)(1) of the Shipping Act of 1984; Order of
Investigation and Hearing
Ever Freight International Ltd. (``Ever Freight'') is a tariffed
and bonded non-vessel-operating common carrier (NVOCC) located at 18th
Floor, Kam Sang Building, 255-257 Des Voeux Road Central, Sheung Wan in
Hong Kong. Ever Freight holds itself out as an NVOCC pursuant to its
ATFI tariff FMC No. 001, filed June 17, 1996.
Ever Freight currently maintains an NVOCC bond, No. 8941414, in the
amount of $50,000 with the Washington International Insurance Company,
located in Schaumburg, Illinois. Pursuant to Rule 24 of Ever Freight's
tariff, Washington International Insurance Company also serves as the
U.S. resident agent for purposes of receiving service of process on
behalf of Ever Freight International Ltd.
Ever Freight is believed to have been established by former
employees of Goldline Ltd., an NVOCC which has operated without a
tariff or bond since May 1995.\1\ Likewise, Ever Freight is believed to
have operated as an NVOCC from March 1996 through June 16, 1996 without
benefit of the bond or tariff required by the 1984 Act. During that
period and at times subsequent to the filing of its tariff and bond,
Ever Freight participated in numerous apparent acts of misdescription
of cargo on shipments from Hong Kong to the U.S., in concert with U.S.
consignees Sigma Express Inc. and Mario F. Chavarria d/b/a/ Transcargo
International, among others.
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\1\ Goldline currently operates under the name Comm-Sino Ltd.
but has adopted numerous pseudonyms in the past, including Harvesta
Ltd., Gain Sharp Trading, Truest Ltd., Vastmas Intl. Ltd. and
Wellsources Ltd. A formal investigation, FMC Docket No. 96-19, is
presently underway as to Comm-Sino, alleging violations of sections
10(a)(1) and 10(b)(1).
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Respondent Sigma Express Inc. (``Sigma Express'') is a tariffed and
bonded NVOCC located at 11222 La Cienaga Blvd., Suite 330, Inglewood,
California 90304. The President of Sigma Express is Echo Tsai. As
relevant herein, Sigma Express acts as the U.S. consignee and notify
party on certain inbound NVOCC shipments from Ever Freight.
Respondent Mario F. Chavarria is a licensed ocean freight forwarder
(FMC license No. 4175) and a tariffed and bonded NVOCC doing business
as Transcargo International (``Transcargo''). Transcargo's offices are
located at 5155 Rosecrans Avenue, Suite 110, Hawthorne, California
90250. As relevant herein, Transcargo acts as the U.S. consignee and
notify party on certain inbound NVOCC shipments from Ever Freight.
It appears that Ever Freight, acting as shipper in relation to an
ocean common carrier, misdescribed the commodity on numerous shipments
transported by an ocean common carrier between March 1, 1996 and
December 31, 1996.\2\ The shipments primarily originated in Hong Kong,
and were destined for Los Angeles and other U.S. ports and points. In
each of these instances, Ever Freight was listed as shipper on the
ocean carrier's bill of lading, and Ever Freight destination agents in
the U.S., including respondents Sigma Express and Transcargo, acted as
the consignee or notify party. Each shipment generally reflects that an
Ever Freight ``house'', or NVOCC, bill of lading was issued for tender
by the ultimate consignee to Ever Freight's agent upon arrival of the
cargo at destination, which correctly describes the commodity shipped.
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\2\ Based on import data available from the PIERS subsidiary of
the Journal of Commerce, Ever Freight has acted as shipper on over
1100 inbound shipments during the nine month period ending November
1996, accounting for nearly 2700 TEUs of cargo. PIERS reports that
the primary ocean common carriers transporting cargo on behalf of
Ever Freight are Sea-Land and Hanjin Shipping, which together
account for 95% of the total tonnage moved during this period. More
than 200 of these shipments originated during the months of March-
June 1996, at a time when Ever Freight did not yet have any tariff
rates effective for its NVOCC services.
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It further appears that the ocean common carrier rated the
commodities in accordance with the inaccurate description furnished by
Ever Freight, while the U.S. consignees of Ever Freight's shipments
accepted delivery of the cargo and made payment to the ocean common
carrier on the basis of the lower rate attributable to the inaccurate
commodity description. Contemporaneous with the payment of any freight
due to the ocean common carrier, Ever Freight's agents in the U.S also
would issue arrival notices and
[[Page 11199]]
obtain payment of the NVOCC's freight charges from the U.S. importer,
in each case correctly describing the commodity based on actual
contents shipped.
In addition, during time periods subsequent to the filing of Ever
Freight's NVOCC tariff and bond in June 1996, Ever Freight appears both
as shipper and as a carrier issuing its own (Ever Freight) NVOCC bill
of lading with respect to the commodity being shipped. The rates
assessed and collected by Ever Freight and its U.S. agents for these
shipments, however, bear no relation to the rates set forth in Ever
Freight's ATFI tariff on file with the Commission.\3\ Since Ever
Freight has never subsequently modified its tariff rates, it would
appear that all shipments in which Ever Freight issued its NVOCC bill
of lading may be found to constitute violations of section 10(b)(1) of
the 1984 Act.
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\3\ Since filing its tariff in the ATFI system in June 1996,
Ever Freight has maintained a tariff consisting only of three
classes of Cargo N.O.S. rates. Ever Freight does not publish ``per
container'' rates, nor does it appear to charge those Cargo N.O.S.
rates which it does publish, inasmuch as its rates are tariffed
solely on a weight/measurement (W/M) ton basis.
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Section 10(a)(1) of the Shipping Act of 1984 (``1984 Act''), 46
U.S.C. app Sec. 1709(a)(1), prohibits any person knowingly and
willfully, directly or indirectly, by means of false billings, false
classification, false weighing, false report of weight, false
measurement, or by any other unjust or unfair device or means, to
obtain or attempt to obtain ocean transportation for property at less
than the rates or charges that would otherwise be applicable. Section
10(b)(1), 46 U.S.C. app. Sec. 1709(b)(1), prohibits a common carrier
from charging, collecting or receiving greater, less or different
compensation for the transportation of property than the rates and
charges set forth in its tariff. Under section 13 of the 1984 Act, 46
U.S.C. app. Sec. 1712, a person is subject to a civil penalty of not
more than $25,000 for each violation knowingly and willfully committed,
and not more than $5,000 for other violations. Section 13 further
provides that a common carrier's tariff may be suspended for violations
of section 10(b)(1) for a period not to exceed one year, while section
23 of the 1984 Act, 46 U.S.C. app. Sec. 1721 provides for a similar
suspension in the case of violations of section 10(a)(1) of the 1984
Act. Finally, section 19(b) of the 1984 Act, 46 U.S.C. app.
Sec. 1717(b), provides that the license of a freight forwarder shall be
suspended or revoked if it appears that the licensee is no longer
qualified to render forwarding services to the public or has willfully
failed to comply with any provisions of the 1984 Act.
Now therefore, it is ordered, That pursuant to section 10, 11, 13,
19 and 23 of the 1984 Act, 46 U.S.C. app. Secs. 1709, 1710, 1712, 1717
and 1721, an investigation is instituted to determine:
(1) Whether Ever Freight International Ltd., Sigma Express Inc.,
and Mario Chavarria dba Transcargo International, violated section
10(a)(1) of the 1984 Act by directly or indirectly obtaining
transportation at less than the rates and charges otherwise applicable
through the means of misdescription of the commodities actually
shipped;
(2) Whether Ever Freight International Ltd., in its capacity as a
common carrier, violated section 10(b)(1) of the 1984 Act by charging,
demanding, collecting or receiving less or different compensation for
the transportation of property than the rates and charges shown in its
NVOCC tariff;
(3) Whether, in the event violations of sections 10(a)(1) and
10(b)(1) of the 1984 Act are found, civil penalties should be assessed
against Ever Freight International Ltd., Sigma Express Inc. and Mario
F. Chavarria dba Transcargo International and, if so, the amount of
penalties to be assessed against any or all of the parties;
(4) Whether, in the event violations of sections 10(a)(1) and
10(b)(1) of the 1984 Act are found, the tariff of Ever Freight
International Ltd. should be suspended;
(5) Whether, in the event violations of sections 10(a)(1) of the
1984 Act are found, the freight forwarding license of Mario F.
Chavarria should be suspended or revoked; and
(6) Whether, in the event violations are found, an appropriate
cease and desist order should be issued against any or all of the
parties.
It is further ordered, That a public hearing be held in this
proceeding and that this matter be assigned for hearing before an
Administrative Law Judge of the Commission's Office of Administrative
Law Judges at a date and place to be hereafter determined by the
Administrative Law Judge in compliance with Rule 61 of the Commission's
rules of practice and procedure, 46 CFR 502.61. The hearing shall
include oral testimony and cross-examination in the discretion of the
Presiding Administrative Law Judge only after consideration has been
given by the parties and the Presiding Administrative Law Judge to the
use of alternative forms of dispute resolution, and upon a proper
showing that there are genuine issues of material fact that cannot be
resolved on the basis of sworn statements, affidavits, depositions, or
other documents or that the nature of the matters in issue is such that
an oral hearing and cross-examination are necessary for the development
of an adequate record;
It is further ordered, That Ever Freight International Ltd., Sigma
Express Inc. and Mario F. Chavarria dba Transcargo International are
designated as Respondents in this proceeding;
It is further ordered, That the Commission's Bureau of Enforcement
is designated a party to this proceeding;
It is further ordered, That notice of this Order be published in
the Federal Register, and a copy be served on parties of record;
It is further ordered, That other persons having an interest in
participating in this proceeding may file petitions for leave to
intervene in accordance with Rule 72 of the Commission's rules of
practice and procedure, 46 CFR 502.72;
It is further ordered, That all further notices, orders, and/or
decisions issued by or on behalf of the Commission in this proceeding,
including notice of the time and place of hearing or prehearing
conference, shall be served on parties of record;
It is further ordered, That all documents submitted by any party of
record in this proceeding shall be directed to the Secretary, Federal
Maritime Commission, Washington, DC 20573, in accordance with Rule 118
of the Commission's rules of practice and procedure, 46 CFR 502.118,
and shall be served on parties of record; and
It is further ordered, That in accordance with Rule 61 of the
Commission's rules of practice and procedure, the initial decision of
the Administrative Law Judge shall be issued by March 6, 1998 and the
final decision of the Commission shall be issued by July 6, 1998.
Joseph C. Polking,
Secretary.
[FR Doc. 97-6038 Filed 3-10-97; 8:45 am]
BILLING CODE 6730-01-M
