[Federal Register Volume 64, Number 136 (Friday, July 16, 1999)]
[Notices]
[Pages 38498-38499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18120]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Maritime Administration
[Docket No. MARAD-1999-5946]
Crowley American Transport, Inc.; Application for Approval of the
Proposed Transfer of Maritime Security Program Operating Agreements
(MA/MSP-13 Through MA/MSP-15)
Counsel for Crowley American Transport, Inc. (Crowley) and American
Automar, Inc. (Automar), by letter dated July 2, 1999, has notified the
Maritime Administration (MARAD), of the proposed transfer of three
Maritime Security Program (MSP) Operating Agreements (MA/MSP-13 through
15) from Crowley to Automar International Car Carriers Inc. (AICC), a
wholly-owned subsidiary of Automar, pursuant to section 652(j) of the
Merchant Marine Act of 1936, as amended (Act). Crowley was awarded
three MSP Operating Agreements for the U.S.-flag vessels, SEA FOX, SEA
LION and SEA WOLF on December 20, 1996.
Automar has entered into an agreement with Crowley, whereby Automar
or its wholly-owned subsidiaries will purchase certain container vessel
assets of Crowley. The assets will include the two vessels formerly
known as the SEA LION and SEA WOLF (renamed ``LTC CALVIN P. TITUS'' and
``SP 5 ERIC G. GIBSON'' respectively), which had been operating under
MSP contracts, but are now intended to be operated under long-term
contract to the U.S. Navy commencing in July 1999. Additionally,
Crowley and Automar propose that certain related vessel assets and the
three referenced MSP Operating Agreements be transferred from Crowley
to Automar.
With respect to the transfer of MSP Operating Agreements, section
652(j) of the Act provides that ``A contractor under an operating
agreement may transfer the agreement (including all rights and
obligations under the agreement) to any person eligible to enter into
that Operating Agreement under this subtitle after notification of the
Secretary [of Transportation] in accordance with regulations prescribed
by the Secretary, unless the transfer is disapproved by the Secretary
within 90 days after the date of notification. A
[[Page 38499]]
person to whom an Operating Agreement is transferred may receive
payments from the Secretary under the agreement only if each vessel to
be covered by the agreement after the transfer is an eligible vessel
under section 651(b).''
Assuming MARAD does not disapprove the proposed transfer within 90
days of its acceptance of the completed application, Crowley and
Automar have stated their intention to transfer MSP Operating Agreement
MA/MSP-13 from the SEA FOX to the FAUST and MA/MSP-14 from the SEA LION
to the FIDELIO. The FAUST and FIDELIO are existing U.S.-flag roll-on/
roll-off (Ro/Ro) vessels and Automar has asserted that they are MSP
eligible vessels under section 651(b) of the Act. Crowley and Automar
have advised that this transfer is scheduled to occur on or before
August 20, 1999. The third MSP Operating Agreement proposed for
transfer is MA/MSP-15 from the SEA WOLF to the Ro/Ro vessel TANABATA,
or an equivalent vessel, which is asserted to be an eligible vessel
under section 651(b) of the Act, and would be reflagged to U.S.-
registry no later than March 31, 2000.
In implementing the transaction, it is asserted that under a U.S.
citizen owner trust structure, the vessels will be bareboat chartered
to Automar's subsidiary (AICC) which will then time charter the FAUST,
FIDELIO and TANABATA to American Roll-On Roll-Off Carrier LLC (ARC), a
Delaware limited liability company, which will engage American V. Ships
Marine, Ltd. (V Ships), to provide technical and management support to
operate the FAUST, FIDELIO, TANABATA. These three vessels and a fourth
existing U.S.-flag, non-MSP Ro/Ro vessel, the TELLUS, will be operated
in U.S.-flag commercial service between the United States and Europe.
The application contains reference to section 804 of the Act
concerning foreign-flag vessels which call on the United States and
which are owned or chartered by a foreign corporation with connections
to Automar. Automar asserts that the foreign involvement is limited to
Fram Shipping Limited (Fram), a Bermuda corporation, which owns or
charters foreign-flag vessels that may call on the United States from
time to time, and which owns approximately 20 percent of the issued and
outstanding shares of common stock of Automar. A foreign citizen
director of Fram is also a director of Automar, however, the
application states that Fram is only a portfolio investor and does not
have the ability to divert any MSP payments to the foreign corporation
or elect any director to Automar's board. Automar asserts that there is
not sufficient foreign affiliation to require the application of
section 804 restrictions.
Crowley and Automar have requested that MARAD allow the proposed
transfers to become effective in accordance with the application and
pursuant to law. This notice invites comments on legal and policy
issues that may be raised by the Crowley and Automar proposal relating
to the sale of the ships and the transfer of the three subject MSP
Operating Agreements. MARAD has received one comment in advance of this
notice, questioning whether one or more MSP contracts may be
transferred without a simultaneous transfer of the vessel operated
under that contract (namely SEA FOX) to the same purchaser.
A redacted copy of the transfer application will be available for
inspection at the DOT Dockets Facility and on the DOT Dockets website
(address information follows). Any person, firm, or corporation having
an interest in this proposal and desiring to submit comments concerning
the application may file comments as follows. You should mention the
docket number that appears at the top of this document. You should
submit your written comments to the Docket Clerk, U.S. DOT Dockets,
Room PL-401 Nassif Building, Department of Transportation, 400 Seventh
Street, S.W., Washington, DC 20590. Comments may also be submitted by
electronic means via the Internet at http://dmses.dot.gov/sub-
mit/. All comments will become part of the docket. You may call Docket
Management at (202) 366-9324. You may visit the docket room to inspect
and copy comments at the above address between 10 a.m. and 5 p.m., EDT.
Monday through Friday, except Holidays. An electronic version of this
document is available on the World Wide Web at http://dms.dot.gov.
Comments must be received no later than the close of business on July
23, 1999. This notice is published as a matter of discretion, and the
fact of its publication should in no way be considered a favorable or
unfavorable decision on the application, as filed, or as may be
amended. MARAD will consider any comments timely submitted and take
such action with respect thereto as may be deemed appropriate.
Dated: July 12, 1999.
By Order of the Maritime Administration.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 99-18120 Filed 7-15-99; 8:45 am]
BILLING CODE 4910-81-P
