01-10283. Criteria for Granting Waivers of Requirement for Exclusive U.S.-Flag Vessel Carriage of Certain Export Cargoes

AGENCY:

Maritime Administration, Department of Transportation.

ACTION:

Notice of policy revision.

Statement of Policy on Public Resolution 17—73rd Congress

The Maritime Administrator has authorized the following statement describing the policies and procedures in administration of Public Resolution 17, 73rd Congress, 48 Stat. 500, 46 App. U.S.C. § 1241-1, as it applies to credits of the Export-Import Bank of the United States or similar government instrumentalities.

1. Scope of Applicability

Public Resolution No. 17 provides that where an instrumentality of the Government makes loans or credit guarantees to foster the export of agricultural or other products, such products must be carried exclusively in vessels of the United States unless the Maritime Administration (we, us, or our) certifies to the lending agency that such vessels are not available as to numbers, tonnage capacity, sailing schedule or at reasonable rates. The Resolution is applicable to credits of the Export-Import Bank (Eximbank, government instrumentality) or other Government instrumentalities for the purpose of financing the acquisition and shipment of United States products or services. The government instrumentality must include in such credit agreements a requirement that shipments be made in United States-flag vessels, except to the extent that we grant a waiver of the requirement as outlined in this policy statement. If the government instrumentality receives a request for a waiver, it will refer the request to us.

2. Types of Waivers

The process to be followed for all waiver requests is set forth in Appendix A. Guidelines for the information to be included in the waiver request are set forth in Appendix B. We will post the essential terms of applications for, and status of, all waiver requests and waivers on our web site. If our web site is not available, we will transmit the information to the U.S.-flag carriers and the shipper/applicant. Security access to waiver information will be limited to bona fide U.S.-flag ocean carriers and to the shipper who requests or receives the waiver. MARAD will treat all information submitted by shippers that is not essential for U.S.-flag cargo bookings as “business confidential” and exempt from public disclosure under the Freedom of Information Act (FOIA), section 552 (b)4. MARAD may consult with or request further information from any carrier or shipper or Government Agency to clarify any questions we may have on any topic.

(A) Statutory (Non-Availability) Waiver

When it appears that U.S. vessels will not be available within a reasonable time or at reasonable rates, public or private foreign borrowers, or their representatives or their shippers in the United States may apply directly to our Office of Cargo Preference for waiver of the U.S.-flag requirement. Requests for waivers must follow the format in Appendix B and must have a legal signature. We will make any necessary investigation to determine whether U.S.-flag vessels are available and may request additional information. We will approve or deny the waiver request in writing. Copies of approved waivers or denials will be sent to the appropriate government instrumentality.

Such waivers will apply to the specifically approved cargo movements. Within thirty (30) calendar days of vessel loading, applicants or their designated representatives in the United States must report the name of the vessel, registry, date of sailing, load and discharge ports, ocean freight amount, FAS value of cargo, gross weight of cargo in kilos, gross volume of cargo in cubic meters, and total revenue tons, in the general form of Appendix F. A copy of the rated bills of lading must be attached to the report. The government instrumentality's Credit Number must be provided to the ocean carrier by the shipper and must be shown clearly on the rated bill of lading issued by the ocean carrier. The Maritime Administration and the government instrumentality will accept only the ocean bill of lading issued by the carrier operating the vessel as proof of export. An NVOCC or freight intermediary bill of lading must be accompanied by a rated ocean carrier bill of lading.

We strongly encourage those public or private foreign borrowers, and/or their United States representatives or their shippers to meet with U.S.-flag carriers and then to meet separately with our Office of Cargo Preference staff. During the meeting, we must receive full and complete information regarding the project, specifically identifying those cargoes for which a waiver might be sought. Appendix C lists the information that must be presented to us and the carriers. Essential waiver information will be posted on our web site for use by bona fide U.S.-flag carriers and the shipper/applicant.

(B) General Waivers

In certain circumstances, although U.S.-flag vessels may be available, recipient nation vessels may be authorized to share in the ocean carriage of government instrumentality financed movements, but not in excess of fifty percent (50%) of the total movement under the credit. Although allowing a recipient nation to share in this type of ocean carriage may reduce the U.S.-flag share, we may allow such participation if the recipient nation gives similar treatment to U.S. vessels in its foreign trade. When public or private foreign borrowers, or their U.S. representatives, or the primary U.S. shipper acting on behalf of the borrower desire a general waiver for partial use of the national flag vessels of the recipient nation, they must apply to our Office of Cargo Preference for a General Waiver for the particular credit. When private interests apply, we may request sponsorship by the government of the recipient nation, to assure the recipient nation's responsibility to maintain fair and equitable treatment for U.S.-flag shipping.

(1) If we grant such waivers, they will apply only to vessels of recipient nation registry to the extent of their capacity to carry the cargo, based on normal flow of the traffic from the interior through ports of shipment, but not in excess of fifty percent of the total movement under the credit. The U.S.-flag portion should be awarded first to ensure the minimum fifty percent (50%) requirement is met.

(2) General Waivers will normally apply throughout the life of the credit, but the government instrumentality or we may reconsider the duration of the General Waiver at any time in light of altered circumstances.

(3) The record of cargo distribution between U.S. and recipient national flag vessels will be based on (a) revenue tons; and/or (b) ocean freight revenue; and/or (c) such other units as appropriate which provide the greatest revenue to U.S.-flag carriers.

(4) Applicants or their representatives in the United States must provide reports of movements to our Office of Cargo Preference, monthly. The reports must include the name of the vessel, registry, date of sailing, load and discharge ports, ocean freight, value of cargo, gross weight of cargo in kilos, gross volume of cargo in cubic meters, and total revenue tons in the general form of Appendix F. From time to time, we may change the data to be included on these reports to meet specific circumstances of the movements. Copies of the rated ocean bills of lading must be attached. The government instrumentality Credit Number must be provided by the shipper to the underlying ocean carrier and must be shown clearly on the rated bill of lading issued by the ocean carrier. The Maritime Administration and the government instrumentality will accept only the ocean bill of lading issued by the carrier operating the vessel as proof of export. An NVOCC or freight intermediary bill of lading must be accompanied by a rated copy of the underlying ocean bill of lading.

(5) We will not grant a General Waiver until our Office of Cargo Preference has received written confirmation of the applicant's agreement to the foregoing terms and conditions and has been advised of the name and address of the designee located in the United States who will be responsible for controlling the routing of the cargo and for providing the required monthly reports.

(6) General Waiver information will be posted on our web site for use by bona fide US-flag carriers and the shipper/applicant.

(C) Compensatory Waivers

When public or private foreign borrowers, or their U.S. representatives, or their shippers in the U.S., prior to a decision to seek a government instrumentality credit agreement, in honest error or through extenuating circumstances as approved by us, move cargo for which a waiver is necessary to meet subsequent government instrumentality financing requirements, the exporter may apply to our Office of Cargo Preference for a Compensatory Waiver. After investigation, we may grant a Compensatory Waiver whereby the exporter contracts in writing with us to move whatever amount of revenue tons of cargo are required to generate an equivalent or greater amount of ocean freight revenue of non-government impelled cargo on U.S.-flag vessels within a specified time period. If our Office of Cargo Preference determines that a U.S.-flag ocean carrier made the primary error and the shipper reasonably could not be expected to have detected the error and achieved compliance, we may issue a retroactive Statutory Waiver.

Waiver recipients or their representatives in the United States must provide reports of such compensatory movements to our Office of Cargo Preference, monthly. The reports must include the name of the vessel, registry, date of sailing, load and discharge ports, ocean freight, value of cargo, gross weight of cargo in kilos, gross volume of cargo in cubic meters, and total revenue tons, in the general form of Appendix F. From time to time, we may change the data to be included on these reports to meet specific circumstances of the movements. Copies of the rated ocean bills of lading must be attached. The Maritime Administration and the government instrumentality will accept only the ocean bill of lading issued by the carrier operating the vessel as proof of export. An NVOCC or freight intermediary bill of lading must be accompanied by a rated ocean bill of lading. All outstanding compensatory waiver amounts and shipper contact information will be published on our web site for use by bona fide U.S.-flag carriers and the shipper/applicant.

(D) Conditional Waivers

Public or private foreign borrowers or their U.S. representatives or their shippers in the U.S. may apply to our Office of Cargo Preference for a Conditional Waiver of the U.S.-flag requirement for specific overdimensional cargoes if they find that no U.S.-flag liner vessel service capable of accommodating the multiple shipments of their overdimensional cargoes will be available during their proposed project time period. Such Conditional Waiver may be for the length of the project but not greater than two years from the date of any such waiver approval. Also, if during the course of executing a project, U.S.-flag liner vessel service ceases to be available to carry the multiple shipments of their overdimensional cargoes, the borrower or their shippers also may apply for such a Conditional Waiver. Conversely, if a U.S.-flag liner vessel service capable of accommodating the cargoes commences operations, the Conditional Waiver will be withdrawn.

Before we will grant a Conditional Waiver, the exporter must meet with the U.S.-flag carriers and then must meet separately with our Office of Cargo Preference staff, to provide full and complete information regarding the project, specifically identifying those cargoes on which the waiver is sought. Appendix C lists the information that must be presented to us and the carriers.

We will grant a Conditional Waiver only for those trade lanes in which no U.S.-flag liner service capable of accommodating the overdimensional cargo is currently available. A Conditional Waiver will only cover previously identified and pre-approved specific overdimensional cargoes and integral components. If a non-liner U.S.-flag carrier that is willing to provide the shipper at least thirty (30) days notice of their vessel's availability and is willing to carry the cargo at a guideline rate that we calculate (see Appendix D), becomes available after a Conditional Waiver is granted then that U.S.-flag carrier will be entitled to carry the cargo, provided the carrier meets our conditions of carriage. In such case we will not issue the corresponding non-availability waiver letter (see below) for that specific cargo voyage.

Once we grant a Conditional Waiver, in order to meet the needs of the government instrumentality for each voyage made under the terms of the Conditional Waiver, the shipper must provide us with the government instrumentality Credit Number and country, vessel name, registry, sailing date, load port, discharge port, cargo weight in kilos, cargo volume in cubic meters, revenue tons, FAS value of cargo, ocean freight, list of cargoes shipped, and a signed statement certifying these specific cargoes were pre-approved by MARAD for shipment under the Conditional Waiver. We will then issue a standard non-availability waiver letter, for presentation to the government instrumentality for each voyage. This standard non-availability waiver letter will cover only those cargoes specifically identified with projected shipping dates previously agreed to under the Conditional Waiver. A shipper wishing to place any additional cargoes on the same voyage must use the Statutory non-availability waiver procedure, detailed in Appendix A paragraph A, with appropriate notice to the U.S. carriers.

Within 30 days of vessel sailing, the shipper must submit a completed Appendix F form and attach a rated copy of the ocean carriers bill of lading. The government instrumentality's Credit Number must be provided to the ocean carrier by the shipper and must be shown clearly on the rated bill of lading issued by the ocean carrier. We will post essential waiver information on our web site for use by bona fide U.S.-flag carriers and the shipper/applicant.

3. Considerations Influencing Approval of Applications for Waivers

(A) In evaluating applications for Statutory (Non-Availability) Waivers under Paragraph 2(A) we will consider:

(1) Whether the applicant followed the process set forth in Appendix A and provided the waiver information in Appendix B and met with the U.S.-flag carriers and with us at the beginning of the project to provide the information listed in Appendix C;

(2) Whether a carrier's proposed transshipment of Long Lead Time or Critical Item cargoes for cargo that is loose or non-containerizable involves a risk of damage or delay sufficient to constitute non-availability. However, the shipper must provide sufficient documentation acceptable to us such as contracts, certifications, engineering data, etc., to prove the cargoes meet the definition of Long Lead Time or Critical Items (Appendix E). The shipper must certify the foreign-flag carriers will not transship the cargo. MARAD may track vessel voyages.

(3) The national policy of the United States, including the Merchant Marine Act of 1936, as amended, as well as the purpose of the government instrumentality in authorizing the credit.

(B) In evaluating applications for General Waivers under Paragraph 2(B), we will consider:

(1) The treatment given U.S.-flag vessels in the trade with the recipient nation, particularly whether U.S.-flag vessels have equal opportunity compared to national-flag or other foreign-flag vessels to solicit and participate in movements controlled in the foreign nation; parity in the application of consular or other fees, port charges, and facilities; also parity of exchange treatment including the privilege of converting freight collections to dollars as needed, etc. We will seek information from U.S. ship owners and other sources as to their experiences in the particular trade.

(2) The national policy of the United States, including the Merchant Marine Act of 1936, as amended, as well as the purpose of the government instrumentality in authorizing the credit.

(C) In evaluating applications for compensatory waivers under Paragraph 2(C), we will consider:

(1) The circumstances leading to the movement on a foreign-flag vessel;

(2) The prior history of the exporter in shipping its government-impelled and commercial cargoes on U.S.-flag vessels;

(3) Any previous or current compensatory waivers used by the exporter and its efforts to comply with the terms of the previous or existing compensatory waivers; and

(4) The national policy of the United States, including the Merchant Marine Act, 1936, as amended, as well as the purpose of the government instrumentality in authorizing the credit;

(D) In evaluating applications for conditional waivers under Paragraph 2(D) we will consider:

(1) Whether the applicant followed the process set forth in Appendix A and provided the waiver information in Appendix B and met with the U.S.-flag carriers and with us at the beginning of the project to provide the information listed in Appendix C;

(2) Whether a carrier's proposed transshipment of Long Lead Time or Critical Item cargoes for cargo that is loose or non-containerizable involves a risk of damage or delay sufficient to constitute non-availability. However, the shipper must provide sufficient documentation acceptable to us such as contracts, certifications, engineering data, etc., to prove the cargoes meet the definition of Long Lead Time or Critical Items (Appendix E). The shipper must certify the foreign-flag carriers will not transship the cargo. MARAD may track vessel voyages.

(3) Whether a non-liner carrier's refusal to offer service at or below our guideline rate may constitute non-availability. Upon application by the shipper and only for Conditional Waivers, we will calculate a guideline rate for non-liner service. The rate will be expressed as dollars per revenue ton of cargo, as set forth in Appendix D.

(4) The national policy of the United States, including the Merchant Marine Act of 1936, as amended, as well as the purpose of the government instrumentality in authorizing credit.

(E) Providing false information, or concealing facts, or non-compliance with the terms of a waiver may result in the cancellation of the current waiver and/or a refusal to grant future waivers and/or other appropriate actions, including debarment from government loans, guaranties, or contracts. Civil or criminal fraud will be penalized under the appropriate United States Code section. MARAD reserves the right to audit any waiver.

Attachments (these attachments are hereby incorporated into this policy):

Appendix A: Waiver Request Procedures

Appendix B: Waiver Request Required Information

Appendix C: Information and Communication Guide

Appendix D: Guideline Rate Policy

Appendix E: Definitions and Miscellaneous Information

Appendix F: Movement Reports Guide

Appendix A

(OMB No. 2133-0013 applies to this collection of information.)

Waiver Request Procedures

A. Statutory (Non-Availability) Waivers

1. The process begins when public or private foreign borrowers or their United States representative, receives or expects to receive government instrumentality credit approval. (Note: Shipments could begin before the credit approval. See the section on Compensatory Waivers.) In the early stages of the project, either before or when the credit is approved, the shipper should meet with the U.S.-flag carriers and us and discuss the project cargoes detailing the information suggested in Appendix C. We will confirm the government instrumentality Credit Number.

2. The shipper must present its Request for Quotation (RFQ) for ocean service to the carriers at least forty-five (45) calendar days in advance of the intended shipping date. For efficiency, the RFQ also should be sent to the Maritime Administration. The RFQ must be presented at the same time and with the same information to all carriers, both U.S. and foreign. The RFQ must be given to all U.S.-flag carriers who may have service or could initiate service and should contain the most detailed information available regarding the commodities, sizes and weights. The shipper must give carriers at least fourteen (14) calendar days in which to respond.

3. The U.S.-flag carriers must respond to the RFQ within fourteen (14) calendar days either declining the cargo or providing an offer addressing both the rate quotations and the logistical needs expressed in the RFQ.

4. If the shipper cannot obtain service from a U.S.-flag carrier, the shipper may apply for a waiver from us. Such waiver application must be presented at least thirty (30) calendar days in advance of the intended shipping date. The request must contain all the required information as shown in Appendix B.

5. We will review the application, verify the waiver documentation provided by the shipper, investigate or request further information as necessary, and further search the market for U.S.-flag carriers to handle the cargo.

6. We will either approve or deny the waiver in writing.

B. General Waivers

1. As set forth in our Policy Statement at paragraph 2(B), a foreign borrower or primary U.S. exporter who desires to make partial use of registered vessels of the recipient nation for a specific U.S. Government instrumentality credit must send a written request to our Office of Cargo Preference.

2. We will make necessary investigations, including consultations with U.S.-flag carriers, to determine that parity of treatment is extended to U.S.-flag vessels in the foreign trade of that nation.

3. If we do not find discrimination, we will advise the applicant that we may grant a General Waiver upon receipt of written confirmation of the applicant's agreement to the terms and conditions set forth in our Policy Statement at paragraph 2(B). When we receive the written confirmation, we will grant the General Waiver in writing with a copy to the U.S. Government instrumentality.

C. Compensatory Waivers

1. If a Compensatory Waiver is needed (see our Policy Statement paragraph 2(C)), the shipper should apply to us in writing, stating the reasons, identifying the government instrumentality Credit Number and country, and attaching freighted copies of the ocean bills of lading covering the applicable cargoes.

2. If, after investigation, we decide to grant a Compensatory Waiver, we will notify the shipper of the requirements. Those requirements include moving whatever amount of revenue tons of non-government impelled cargo on U.S.-flag vessels are required to generate an equivalent or greater amount of ocean freight revenue within a specified time period. The shipper must then execute a written contract with us affirming they will meet those requirements.

3. Once we receive the written contract from the shipper, we will issue the waiver.

D. Conditional Waivers

1. An applicant for a Conditional Waiver (see our Policy Statement paragraph 2(D)) must fulfill the conditions and information stated in Appendix C and must identify the specific overdimensional and integral component cargoes with projected shipping dates during the waiver time period. The shipper must search the market for U.S.-flag carriers to transport the identified cargoes. If the shipper cannot find such carriers, the shipper may apply in writing to us and must provide the information required in Appendix B and state the requested beginning and ending dates of the conditional waiver period. We must receive the application at least sixty (60) calendar days before the intended start of the requested Conditional Waiver period.

2. We will review the application in light of the information presented at the earlier meeting, consult with the U.S. carriers, and request additional information, as necessary.

2. If no U.S.-flag carrier which can accommodate the multiple shipments of overdimensional cargo can be found, we will grant a Conditional Waiver for the agreed time period, conditions, and specific identified cargoes.

4. We will calculate a Guideline Rate for the specific cargoes covered under the Conditional Waiver, as set forth in Appendix D, and will publish the Guideline Rate on our web site for use by bona fide U.S.-flag carriers and the shipper/applicant.

5. Immediately after each shipment departs the load port, the shipper must give us an update of the remaining project cargoes previously approved under the Conditional Waiver and an update of the projected shipping dates. Forty days prior to the next shipment, the shipper must confirm to us the projected load date, place, and cargo.

6. If at any time during the period of the Conditional Waiver, a U.S.-flag non-liner carrier gives at least a thirty (30) day notice to the shipper and us in which the U.S.-flag non-liner carrier offers to carry the cargo at or below the published guideline rate, the U.S.-flag non-liner carrier will be entitled to do so provided the carrier meets our conditions of carriage. If at any time during the period of the Conditional Waiver, a U.S.-flag liner vessel service capable of accommodating the cargoes commences operations, the Conditional Waiver will be withdrawn.

7. To meet the needs of the government instrumentality for each voyage made under a Conditional Waiver, the shipper must give us the government instrumentality Credit Number and country, vessel name, registry, sailing date, load port, discharge port, cargo weight in kilos, cargo volume in cubic meters, revenue tons, FAS value of cargo, ocean freight, list of cargoes shipped, and a signed statement certifying these cargoes were pre-approved by MARAD for shipment under the Conditional Waver. We will then issue a standard non-availability waiver letter for each voyage for presentation to the government instrumentality. This standard non-availability waiver letter will cover only those cargoes specifically identified and previously agreed to under the Conditional Waiver. A shipper who wishes to place any additional cargoes on the same voyage must use the Statutory non-availability waiver procedure, detailed in Appendix A paragraph A, with appropriate notice to the U.S. carriers. Within 30 days of vessel sailing, the shipper must submit a completed Appendix F form and attach a freighted copy of the ocean carriers bill of lading. We will post essential waiver information on our web site for use by bona fide U.S.-flag carriers.

8. A shipper who needs additional time beyond the original Conditional Waiver period must apply for an extension by following steps 1 through 6 above. After investigation and consultation with the U.S. carriers, we may grant an extension.

Appendix B

(OMB No. 2133-0013 applies to this collection of information.)

PR-17 Waiver Request—Format

The below information is required to process a Statutory or Conditional Waiver request. This information should be mailed or faxed to Office of Cargo Preference, Room 8118, Maritime Administration, 400 Seventh Street, SW., Washington, DC 20590. Fax number is 202-366-5522. Electronic mail address is [e-mail]

RE: Government Instrumentality Credit No. (Enter the number)—Country (Enter Country name)

Applicant: (Name of company seeking the waiver. Should be the cargo manufacturer or beneficial owner. If a freight forwarder or other party makes the application, it must clearly state on whose behalf it is seeking the waiver and that it legally represents said party.)

Vessel: (Name of vessel you propose to use. Enter “To Be Named” if unknown. Note that actual vessel must be named before a final waiver can be issued. Shippers should be aware that PL 105-383 prohibits the carriage of preference cargoes on substandard vessels. See the MARAD web site.)

Registry: (Nation of registry of vessel. Enter “To Be Named” if unknown.)

Commodity: (Short, one-line description similar to Acquisition List line items. Attach detailed description as part of packing list or similar document.)

Weight: (Total weight in kilos. Attach details of individual shipping components with dimensions and weights as part of packing list or similar document.)

Volume: (Total volume in cubic meters. Attach details of individual shipping components with dimensions and weights as part of packing list or similar document.)

Revenue Tons: (shipper's estimate of cargo revenue tons.)

Value of Shipment: (FAS value in US dollars.)

Ocean Freight: (Actual or estimated ocean freight charges from the carrier whom the applicant proposes to use.)

Loading Port: (Desired port to load cargo.)

Loading Date: (Date when cargo will be ready to load.)

Discharge Port: (Desired port of destination for ocean carriers.)

Written Reason(s) for the Waiver Request With Documentation Supporting Each Reason Attached

The following language must be included in any waiver request above the signatory block:

This application is made for the purpose of inducing the United States of America to grant a waiver of Public Resolution 17 and the policy prescribed to carry out the provisions of PR-17. I have carefully examined the application and all documents submitted in connection therewith and, to the best of my knowledge, information and belief, the statements and representatives contained in said application and related documents are full, complete, accurate and true.

Signature:

Name (typed):

Title:

Date:

The Following Documents Must be Attached:

1. Copy of the “Request for Quotations (RFQ)” package which the shipper sent to the carriers. The RFQ should contain the most detailed information available regarding the commodities, sizes and weights. A packing list is preferable.

2. A list of all carriers, with names of personnel, to whom the RFQ was sent.

3. Copies of responses received from any U.S.-flag carriers.

4. Documentation supporting each reason justifying the need for a waiver. For example, a contract problem requires a copy of the applicable contract clauses; a letter of credit problem requires a copy of the L/C; U.S.-flag service not available requires copies of written declinations by the U.S. carriers; etc.

Note:

The essential terms of the waiver application and cargo shipment information will be posted on the Maritime Administration web site but restricted to bona fide U.S.-flag carriers.

Note:

The U.S. Criminal Code makes it a criminal offense for any person knowingly to make a false statement or representation to, or to conceal a material fact from, any department or agency of the United States as to any matter within its jurisdiction (18 U.S.C. 1001), or to file a false, fictitious or fraudulent claim against the United States (18 U.S.C. 287). Civil fraud may incur fines of $10,000 plus 3 times damages and expenses of government recovery. Criminal fraud provides up to 5 years imprisonment. In addition, entities may be debarred from further Government contracts.

Appendix C

(OMB No. 2133-0013 applies to this collection of information.)

Information and Communication

At the beginning of a project shippers should (required for Conditional Waivers):

—Meet with the U.S.

—flag ocean carriers

—Meet with the Maritime Administration Purpose:

—Lay out project in as much detail as possible

—Discuss contract requirements

—Discuss any unique or expected problem requirements

—Provide best estimates, details, pictures of types of cargo

—Identify any long lead time or critical items

—Discuss what cargoes should move together and why

—Discuss anticipated shipment dates tied to project schedules

—Discuss items which it is doubtful U.S. carriers can handle & alternatives

—Obtain carrier capabilities & alternatives

—Establish and maintain a dialogue with U.S. flag carriers

Note:

For Conditional Waivers, the shipper must specify the projected overdimensional cargoes and integral components and specify their projected shipping dates.

In addition, for the Maritime Administration meeting:

—Discuss potential waivers, if applicable

—Discuss reporting requirements

—Establish a working relationship with Maritime Administration

The essential information will be posted on the Maritime Administration web site.

As the project progresses, keep the carriers and Maritime Administration informed of progress related to initial projections and unforeseen problems as they arise.

Increased understanding of each party's objectives and capabilities will establish better communications and create a smoother/faster process.

Appendix D

(OMB No. 2133-0013 and 2133-0514 apply to this collection of information.)

Once a shipper requests a Conditional Waiver of the U.S.-flag requirement of PR-17, we will calculate a guideline rate or rates as part of the waiver process. The guideline rate will be for the proposed movement of a specific cargo or cargoes on a specific voyage or voyages on U.S.-flag non-liner vessels. For the purpose of this PR-17 policy, the guideline rates will be calculated using the basic framework contained in the Maritime Administration regulations at 46 CFR part 382.3, except as follows:

1. We will calculate the guideline rate based on a vessel or group of vessels we determine is most suited to the cargo and destination.

2. Costs will be indexed to the year of cargo carriage.

3. The calculation will assume, unless we determine otherwise, that the cargo occupies seventy percent of the cubic capacity of the selected vessel(s).

4. The rate will be specified in U.S. dollars per revenue ton.

Appendix E

(OMB No. 2133-0013 applies to this collection of information.)

Definitions: The following definitions apply to this PR-17 policy.

Breakbulk Cargo: General “mark and count” cargo that is carried on a ship loose or non-containerized.

Critical Item Cargo: A product whose non-availability to support the required installation date would cause the project to shut down or to incur substantial liquidated damages.

Foreign Borrower: A foreign government, corporation, or person who is the recipient of a loan or credit guarantee by an instrumentality of the United States.

Government Instrumentality: An agency or function of the United States Government which provides loans or credit guarantees or other financial incentives to foster, directly or indirectly, the export of any product or service.

Liner Service: A service provided on an advertised schedule giving relatively frequent sailings between specific U.S. ports or ranges and designated foreign ports or ranges.

Long Lead Time Cargo: A product which, if damaged during shipment, would require more than six (6) months to repair or remanufacture and which is not available sooner from the shipper's inventory or from any other manufacturer.

Ocean Carrier: The operator of the ocean vessel which carries the cargo between one or more United States ports and one or more foreign ports.

Overdimensional Cargo: A specific piece of cargo is considered overdimensional or out-of-gauge when one or more of its dimensions exceed the interior dimensions of a standard maritime industry forty-foot container or the cargo weight exceeds 39 metric tons and it cannot otherwise be accommodated for safe carriage on a container vessel by the use of other specialized equipment.

Priority of Service: All U.S.-flag service from origin to destination is Priority One service and has first preference for carriage of the cargo. A combination of U.S.-and foreign-flag vessels is Priority Two. If there are competing Priority Two offers, the one with the longest U.S.-flag vessel leg of the voyage has priority. If MARAD agrees that no Priority One service is available then a Priority Two service may be used. If no U.S.-flag service is available then MARAD may approve the use of foreign-flag vessels.

Revenue Ton: A metric ton or cubic meter of cargo, whichever yields the greatest revenue to the ocean carrier.

Shipper: A person or company who is the beneficial owner of the cargo and who contracts with a shipping line or shipowner for the carriage of cargo.

Transshipment: The offloading of breakbulk cargo from one vessel at an intermediate port and reloading the breakbulk cargo on a different vessel for delivery to final destination. It does not include cargo in containers, trailers, or barges or other similar equipment where the entire conveyance is relayed from one vessel to another vessel under a through bill of lading.

By Order of the Maritime Administrator.

Dated: April 20, 2001.

Joel C. Richard,

Secretary, Maritime Administration.