[Federal Register Volume 62, Number 107 (Wednesday, June 4, 1997)]
[Notices]
[Pages 30587-30589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14470]
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FEDERAL MARITIME COMMISSION
[Docket No. 97-09]
Topocean Consolidation Service Ltd., Topocean Consolidation
Service (Los Angeles) Inc. and Topocean Consolidation Service (New
York) Inc. Possible Violations of Sections 8, 23(a) and 10(a)(1) of the
Shipping Act of 1984; Order of Investigation and Hearing
Topocean Consolidation Service Ltd. (``Topocean Taiwan'') is a
tariffed and bonded non-vessel-operating common carrier (``NVOCC'')
located at 11F-1, 316, Sec. 5 Nan-King East Road, Taipei, Taiwan.
Topocean Taiwan holds itself out as a NVOCC pursuant to its Automated
Tariff Filing and Information System (``ATFI'') tariff, FMC No. 012067-
002, effective June 12, 1996. According to Rule 24 of its tariff,
Topocean Taiwan's resident agent in the United States for service of
process is Topocean Consolidation Service (Los Angeles) Inc. located at
3780 W. Century Blvd., Inglewood, CA 90303. Between October 20, 1993
and September 15, 1995, Topocean Taiwan maintained an ATFI tariff (FMC
No. 012067-001) which was canceled by the Federal Maritime Commission
(``Commission'') in September 1995 for Topocean Taiwan's failure to
maintain a NVOCC bond. In conjunction with filing its current tariff,
Topocean Taiwan furnished a NVOCC bond, No. 18017, effective May 2,
1996 and issued by American Contractors Indemnity Company in Los
Angeles, CA.
Topocean Consolidation Service (Los Angeles) Inc. (``Topocean LA'')
is a tariffed and bonded NVOCC located at 3780 W. Century Blvd.,
Inglewood, CA. Topocean LA holds itself out as a NVOCC pursuant to its
ATFI tariff, FMC No. 014097-001, effective June 12, 1996. Topocean LA
maintains a NVOCC bond, No. 15885, issued by American Contractors
Indemnity Company, located in Los Angeles, CA. Topocean LA is a United
States destination agent for shipments from Topocean Taiwan.
Topocean Consolidation Service (New York) Inc. (``Topocean NY'') is
a destination agent in the New York area for shipments from Taiwan and
Hong Kong. Topocean NY is located at 145-17 155th St., Jamaica, NY
11434. It does not maintain with the Commission a NVOCC bond and tariff
nor is it a licensed ocean freight forwarder. Topocean NY is a United
States destination agent for shipments from Topocean Taiwan.
Topocean Taiwan appears to have operated as a NVOCC on numerous
shipments between September 16, 1995 and June 11, 1996. A NVOCC is a
common carrier that holds itself out to the public as a provider of
ocean transportation for compensation and acts as a shipper in its
relationship with an ocean common carrier for the transportation of
cargo of other persons. Topocean Taiwan's ocean shipments originated in
Taiwan and were discharged at United States ports. Each shipment
generally reflects that a Topocean Taiwan ``house'', or NVOCC, bill of
lading was issued in which Topocean Taiwan held itself out as a
provider of ocean transportation. The NVOCC bill of lading would be
tendered by the ultimate consignee to one of Topocean Taiwan's
destination agents \1\ upon arrival of the cargo at its United States
destination. In each of these instances, Topocean Taiwan was listed as
shipper on the ocean carrier's bill of lading. Thus, Topocean Taiwan,
by providing and holding out to the public to provide transportation by
water of cargo for compensation and by contracting as a shipper in
relation to a common carrier for the transportation of cargo of other
persons, appears to have operated as a NVOCC for these shipments.
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\1\ Topocean Taiwan has at least three United States destination
agents: Topocean LA, Topocean NY and Apex Maritime Co., Inc.
(located near San Francisco, CA).
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According to the records of the Commission's Bureau of Tariffs,
Certification and Licensing (``BTCL''), Topocean Taiwan did not have an
effective tariff during this time period. Section 8 of the Shipping Act
of 1984 (``1984 Act''), 46 USC app. 1707, provides that no common
carrier may provide service in the United States foreign trade unless
the carrier first has filed a tariff with the Commission showing all of
its rates, charges and practices. Section 8 also states that no new
rates may become effective earlier than 30 days after filing at the
Commission. The Commission's regulations implementing this statutory
provision, at 46 CFR 514.9(b)(9)(i)(A), explain that ``[n]ew tariffs *
* * shall * * * be filed to become effective not earlier than 30 days
after the date of filing.'' \2\ Therefore, it would appear that
Topocean Taiwan may have acted as a NVOCC for shipments which occurred
between September 16, 1995, and June 11, 1996, without an effective
tariff in violation of section 8 of the 1984 Act.
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\2\ The Commission's regulations at 46 CFR 514.1(e)(1), provide
that ``[o]perating without an effective tariff on file with the
Commission * * * is unlawful.''
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Section 23(a) of the 1984 Act, 46 U.S.C. app. 1721(a), requires
every NVOCC to furnish to the Commission ``a bond, proof of insurance,
or other such surety, as the Commission may require.'' Between
September 16, 1995 and May 2, 1996, Topocean did not furnish a bond,
proof of insurance or other such surety to the Commission as required
by section 23(a). Therefore, Topocean Taiwan appears to have acted as a
NVOCC for shipments which occurred between September 16, 1995 and May
2, 1996, without a bond, proof of insurance or other such surety in
violation of section 23(a) of the 1984 Act.
It appears that Topocean LA and Topocean NY, in concert with
Topocean Taiwan, knowingly and willfully obtained or attempted to
obtain ocean transportation for cargo at less than the applicable rates
in violation of section 10(a)(1) of the 1984 Act, 46 U.S.C. 1709(a)(1),
by means of misdescription of commodities for numerous shipments
transported by ocean common carriers between September 1, 1995 and
April 30, 1997. Section 10(a)(1) of the 1984 Act prohibits any person
knowingly and willfully, directly or indirectly, by means of false
billing, 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.
It appears that the misdescribed shipments originated in Taiwan or
Hong Kong and were discharged at or via United States ports. In each of
these instances, Topocean Taiwan usually was listed as shipper on the
ocean carrier's bill of lading, and the destination agents, Topocean LA
and Topocean NY, acted as the consignee or notify party. Each shipment
generally reflects that a Topocean Taiwan ``house'', or NVOCC, bill of
lading, which correctly describes the commodity shipped, was issued for
tender by the ultimate consignee to Topocean LA or Topocean NY upon
[[Page 30588]]
arrival of the cargo at destination. The commodity descriptions on the
NVOCC bills of lading do not match the commodity descriptions set forth
on the ocean common carriers' bills of lading. According to the ocean
common carriers' tariffs and service contracts, the commodities
described on the ocean common carriers' bills of lading appear to have
lower rates than the commodities described on the
NVOCC 's bills of lading.
It further appears that the ocean common carriers rated the
commodities in accordance with the inaccurate descriptions, while
Topocean LA and Topocean NY accepted delivery of the cargo and paid
ocean freight to the ocean common carriers on the basis of the lower
rates attributable to the inaccurate commodity descriptions.
Contemporaneous with the payment of freight, Topocean LA and Topocean
NY issued arrival notices to the U.S. importers, which correctly
described the commodity based on actual contents shipped. The resulting
profit on these shipments would be divided equally between the United
States destination agent (Topocean LA or Topocean NY) and Topocean
Taiwan. Thus, Topocean NY and Topocean LA appear to have increased
their profits on these shipments because of the misdescriptions.
Therefore, it seems that Topocean LA and Topocean NY knowingly and
willfully obtained or attempted to obtain ocean transportation for
property at less than the applicable rates in violation of section
10(a)(1) of the 1984 Act.
Between September 1, 1995 and April 30, 1997, it appears that
Topocean LA, in concert with Topocean Taiwan, knowingly and willfully
obtained or attempted to obtain ocean transportation for property at
less than the applicable rates in violation of section 10(a)(1) of the
1984 Act by means of false cargo measurements. In each instance, the
ocean common carrier substituted a larger container for the container
presumably requested by Topocean Taiwan. In accordance with the ocean
common carrier's ``equipment substitution'' rule, the ocean freight for
the requested container would be charged if the cargo's measurement did
not exceed that which could be loaded into the requested container. The
shipment record indicates that the substituted container was loaded
beyond the cubic capacity of the requested container, but the ocean
common carrier's bill of lading shows a cargo measurement which is less
than that which could have been loaded into the requested container. As
a result, Topocean LA paid the ocean freight for the requested
containers rather than the higher ocean freight for the substituted
containers.
The shipment records demonstrate that Topocean LA was cognizant
that the shipments had been misdeclared as to the cubic measurement and
were loaded at higher measurements only possible through the provision
of a larger container. However, Topocean LA apparently paid the ocean
freight according to the inaccurate measurement shown on the ocean
common carrier's bill of lading. Therefore, it appears that Topocean LA
knowingly and willfully obtained or attempted to obtain ocean
transportation for property at less than the applicable rates between
September 1, 1995 and April 30, 1997 in violation of section 10(a)(1).
On June 12, 1996, Topocean Taiwan became a tariffed and bonded
NVOCC. At that time, Topocean Taiwan's shipments could be accepted by
ocean common carriers,\3\ and this cargo could be rated in accordance
with ocean common carriers' applicable tariffs or service contracts.
Based upon the facts set forth above, it appears that between June 12,
1996 and April 30, 1997, Topocean Taiwan may have obtained or attempted
to obtain ocean transportation for property at less than the applicable
rates by means of false cargo measurements or misdescriptions of cargo
in violation of section 10(a)(1) of the 1984 Act.
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\3\ Section 10(b)(14) of the 1984 Act, 46 U.S.C. app.
1709(b)(14), prohibits ocean common carriers from knowingly and
willfully accepting cargo from or transporting cargo for the account
of an untariffed and unbonded NVOCC.
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Under section 13 of the 1984 Act, 46 USC app. 1712, a person is
subject to a civil penalty of not more than $25,000 for each knowing
and willful violation of the 1984 Act. In addition, section 23 of the
1984 Act, 46 U.S.C. app. 1721, provides that a common carrier's tariff
may be suspended for violations of sections 10 (a)(1) of the 1984 Act.
Now therefore, it is Ordered, That pursuant to sections 3, 8, 10,
11, 13, 14 and 23 of the 1984 Act, 46 U.S.C. app. 1702, 1707, 1709,
1710, 1712, 1713 and 1721, and 46 CFR Part 514, an investigation is
instituted to determine:
(1) Whether Topocean Consolidation Service Ltd. violated section 8
of the 1984 Act by operating as a common carrier without an effective
tariff on file at the Commission between September 16, 1995 and June
11, 1996;
(2) Whether Topocean Consolidation Service Ltd. violated section
10(a)(1) of the 1984 Act between June 12, 1996 and April 30, 1997, by
directly or indirectly obtaining ocean transportation for property at
less than the rates and charges otherwise applicable by means of
misdescriptions of commodities or false cargo measurements;
(3) Whether Topocean Consolidation Service Ltd. violated section
23(a) of the 1984 Act, by providing non-vessel-operating common carrier
services without an effective bond filed at the Commission between
September 16, 1995 and May 2, 1996;
(4) Whether Topocean Consolidation Service (Los Angeles) Inc. and/
or Topocean Consolidation Service (New York) Inc. violated section 10
(a)(1) of the 1984 Act between September 1, 1995 and April 30, 1997, by
directly or indirectly obtaining transportation at less than the rates
and charges otherwise applicable by means of misdescription of
commodities;
(5) Whether Topocean Consolidation Service (Los Angeles) Inc.
violated section 10(a)(1) of the 1984 Act between September 1, 1995 and
April 30, 1997, by directly or indirectly obtaining or attempting to
obtain ocean transportation at less than the rates and charges
otherwise applicable by means of false cargo measurements;
(6) Whether, in the event violations of section 8, 10 (a)(1) and
23(a) of the 1984 Act are found, civil penalties should be assessed
against Topocean Consolidation Service Ltd., Topocean Consolidation
Service (Los Angeles) Inc., and Topocean Consolidation Service (New
York) Inc. and, if so, the amount of penalties to be assessed;
(7) Whether, in the event violations of section 10 (a)(1) of the
1984 Act are found, the tariffs of Topocean Consolidation Service Ltd.
and Topocean Consolidation Service (Los Angeles) Inc. should be
suspended or canceled; and
(8) Whether, in the event violations of the 1984 Act are found, an
appropriate cease and desist order should be issued against Topocean
Consolidation Service Ltd., Topocean Consolidation Service (Los
Angeles) Inc. and Topocean Consolidation Service (New York) Inc.
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
[[Page 30589]]
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 Topocean Consolidation Service Ltd.,
Topocean Consolidation Service (Los Angeles) Inc. and Topocean
Consolidation Service (New York) Inc. 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, D.C. 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 May 29, 1998 and the
final decision of the Commission shall be issued by September 28, 1998.
Joseph C. Polking,
Secretary.
[FR Doc. 97-14470 Filed 6-3-97; 8:45 am]
BILLING CODE 6730-01-M
