NEW YORK/ NEW JERSEY FOREIGN FREIGHT FORWARDERS
& BROKERS ASSOCIATION, INC.
SEMINAR/ LUNCHEON MEETING
JUNE 20, 2012
NEWARK, NJ
NRAs: ONE YEAR LATER
And
FMC ENFORCEMENT REVIEW
Carlos Rodriguez, Esq.
Husch Blackwell
750 17th Street, N.W.
Washington, D.C. 20006
© Husch Blackwell LLP
QUICK REVIEW OF NRAs
KEY ITEMS : (EXPERIENCE: GENERALLY SUCCESSFUL)
*ROUTINE RATES NEGOTIATIONS BECOME THE NRAS
*MUST BE IN “WRITING”---E-MAIL EXCHANGES O.K.
* ROLE FOR BOOKING CONFIRMATION, QUOTE SHEETS, ETC.
Notice Requirement: “Rules Tariff, bill of lading or other
shipping document”---September 12: “Rules Tariff only”-Direct
Rule Making
* SHIPPER AGREEMENT MUST BE CLEAR
* CHARGES CAN BE IN RULES TARIFF OR AS LINE ITEMS IN
NRA (“QUOTATION”)
*RATE/CHARGES INCREASES WITHOUT 30 DAY
NOTICE
DISCUSSION: WHAT ARE YOU DOING AND WHY?
2
KEY ITEMS continued
THE FMC RESPONSE
(TWO MAIN ITEMS)
*
ACCEPTANCE BY THE SHIPPER
The Rule States:
In order to qualify for the exemptions . . . an NRA must:
(a) Be in writing;
(c) Be agreed to by both NRA shipper and NVOCC, prior to receipt of
cargo by the common carrier or its agent (including originating carriers in the
case of through transportation);
FMC WANTS TO SEE SOME WRITTEN RESPONSE BY SHIPPER: E-MAIL “OK”
WOULD BE ENOUGH IN CLEAR RESPONSE TO QUOTATIONS. DISCUSSION.
3
THE FMC RESPONSE
continued
*
RATE AND CHARGES: WHERE DO THEY GO?
RATES: ON THE NRA---THE NRA: THE GROUPING OF E-MAILS,
QUOTATION SHEETS, BOOKING CONFIRMATIONS ETC.
CHARGES: CAN BE ON NRA MATERIAL, OR IN YOUR RULES TARIFF
*
WHAT ABOUT LOCAL ORIGIN/DESTINATION PORT CHARGES?
“All applicable origin and destination local terminal and/or port charges shall
apply for the account of the cargo to all NRAs. “ RULES TARIFF ITEM
4
THE FMC RESPONSE
continued
MISCELLANEOUS FMC ITEMS ON NRAs
*
“GET IT RIGHT” OUTREACH v. “ENFORCEMENT”
*
NRAs ADDRESS RULE: “Contain the legal name and address of
the parties and any affiliates; and contain the names, title and addresses of the
representatives of the parties agreeing to the NRA”---This should change to
“Contain the names of the parties and the names of the representatives
agreeing to the NRA” Direct Rule Making. Effective date: Sept. 12, 2012
*
HISTORICAL TARIFF: MUST KEEP THE RATES TARIFF
ACCESSIBLE FOR THE PRIOR 5 YEARS; LAST TWO YEARS MUST BE
ELECTRONICALLY RETRIEVABLE. AFTER 2 YEARS: HARD COPY O.K.
*
FMC STATES: “No longer required to file NOTICE on FMC
NVOCC Form FMC-1 before using NRAs.” NOT SO: MUST INDICATE ON FMC NO.
1 THE WEB LOCATION OF THE RULES TARIFF.
5
THE FMC RESPONSE
continued
*
“STATED CARGO QUANTITIES”---DOES NOT MEAN MQCS.
CAN MEAN SINGLE SHIPMENT OR NO. OF SHIPMENTS. CAN HAVE MAXIMUM
NO. OF SHIPMENTS. NRA IS NOT AN NSA.
*
RULE: “An NVOCC wishing to invoke an exemption pursuant
to this part must indicate that intention to the Commission and to the public by
a prominent notice in its rules tariff and bills of lading or equivalent shipping
documents.” September 12: “Rules Tariff only”-Direct Rule Making
SUGGESTION (PUT IN SMALL FONT ON FRONT OF BILL OF LADING:
“ Rates and charges for this shipment apply pursuant to 46C.F.R. 532.6 and
520. See Carrier’s Rules tariff at www.nameofnvocc. com.” WILL BE ABLE TO
REMOVE SEPT. 12---SEE ABOVE.
*
REGISTERED NVOCCs AND NRAs---WHAT’S NEXT? DISCUSSION.
6
NRA DISCUSSION POINTS
1. NRA MUST BE IN PLACE PRIOR TO CARGO BEING RECEIVED BY
OCEAN CARRIER OR MOTOR CARRIER IF THROUGH BILL IS ISSUED BY
NVOCC.
•
DISCUSSION POINTS: MARKET PLACE CHANGES:
A.
TOO BAD---YOU ARE STUCK WITH THE RATES/CHARGES YOU
QUOTED!!! YEA/NAY?
DOES 1 ABOVE ALLOW NVOCCs TO ENTER NEW NRA IF
MARKET PLACE CHANGES?
B.
WHAT DOES 30 DAY OFFER MEAN IN YOUR RULES TARIFF OR
YOUR NRA QUOTATION?
----JUST WHAT IT SAYS. YOU ARE STUCK.
----NOT MUCH. YOU CAN TAKE IT BACK. WHEN?
C.
BOTH SHIPPER AND NVOCC AGREE THAT THEY MADE A
MISTAKE ON THE NRA QUOTE AND ACCEPTANCE. CAN THEY
MUTUALLY AGREE TO DIFFERENT RATES OR CHARGES?
7
NRA DISCUSSION POINTS---continued
2. NRAs AND FOREIGN AGENT ROLE ISSUES?
* IS IT “ALL OR NOTHING?” OR CAN YOU HAVE NRAs OUTBOUND
AND RATE TARIFF PUBLICATION INBOUND? OR VICE VERSA?
* ON AN ALL NRA ENVIRONMENT, WHAT DOES THE FOREIGN AGENT
OBLIGATED TO DO?
NOTHING? THE FMC CANT REACH THEM.
EVERYTHING WE TELL THEM TO DO TO MAKE US COMPLIANT? IF THEY
DON’T DO THE NRA QUOTES RIGHT CAN WE BLAME THEM? WHAT WILL
THE FMC LOOK AT?
* AGENT AGREEMENTS SHOULD CONTAIN NRA GUIDELINES AND
INDEMNITY LANGUAGE.
WILL THIS SAVE US FROM FMC ISSUES?
ARE THEY ENFORCEABLE?
8
FMC ENFORCEMENT REVIEW
A.
BUREAU OF ENFORCEMENT OTI
AUDITS
B.
SERVICE CONTRACT REVIEWS
9
FMC ENFORCEMENT REVIEW continued
*
BUREAU OF ENFORCEMENT OTI AUDITS
FOR DISCUSSION
THE AUDIT LETTER SENSITIVE POINTS (selected items from audit
letter):
FEDERAL MARITIME COMMISSION
OCEAN TRANSPORTATION INTERMEDIARY AUDIT REVIEW
OCEAN FREIGHT FORWARDER & NVOCC
PART I: OTI - OCEAN FREIGHT FORWARDERS:
1. Website:
Amount of Surety Bond (Total): (Ocean Freight Forwarder) $
2. Name of Qualifying Individual:
Is the qualifying individual an active officer of the firm?
Yes [
]
No [
]
5. Please attach a sample of the stationery and billing forms which are used in your ocean
freight forwarding business.
10
THE AUDIT LETTER TRAPS (elected items from audit letter)
continued ---Forwarder
•
6.
Do you have branch offices or agents operating in any U.S. location other than the office to which
this letter is addressed? Yes [ ] No [ ]. If the answer is YES, please provide the complete address of each
branch office or agent.
•
8.
Have you entered into special arrangements or contracts with any shipper in the foreign commerce
of the United States? Yes [ ] No [ ]. If the answer is YES, please attach a copy of each special
arrangement or contract.
•
10.
Are you a party to or have you entered into a service contract, in your own name or for your own
behalf, with any ocean common carrier for the transportation of cargo in the foreign commerce of the
United States? Yes [ ] No [ ]
•
11.
If you have a related NVOCC, have you provided the certification required by 46 CFR 515.42(h) to
the underlying ocean common carrier(s) for collection of ocean freight forwarder compensation? Yes [ ]
No [ ] If the answer is NO, please explain.
•
46. C.F.R. § 515.42 1(h) “The undersigned certifies that neither it nor any related person has issued a bill
of lading or otherwise undertaken common carrier responsibility as a non-vessel-operating common carrier
for the ocean transportation of the shipment covered by this bill of lading.”
•
13.
Have you collected ocean freight forwarder compensation from a vessel operating common carrier
on shipments involving a related NVOCC and/or shipper? Yes [ ] No [ ]
11
THE AUDIT LETTER TRAPS (elected items from audit letter)
continued ---Forwarder
•
15.
On a separate sheet of paper, please list the fees (or range of fees) which you
charge to shippers for forwarding services (Do not list charges for ancillary services such
as postage/petties and insurance placement).
•
16.
For each invoice prepared by your firm to a principal, does the following notice
appear: "Upon request, we shall provide a detailed breakout of the components of all
charges assessed and a true copy of each pertinent document relating to the charges"?
Yes [ ] No [ ]. If the answer is NO, please explain.
•
17.
For each bill of lading prepared by your firm, is the identity of the actual shipper
always disclosed in the shipper identification box? Yes [ ] No [ ]. If the answer is NO,
please explain and provide complete details.
12
THE AUDIT LETTER TRAPS (elected items from audit letter)
continued ---NVOCC
PART II: PERTAINING TO OTI NON-VESSEL OPERATING COMMON CARRIERS:
•
1.
Amount of Surety Bond (Total):
(NVOCC) $
•
3.
Do you have branch offices or agents operating in any U.S. location
other than the office to which this letter is addressed? Yes [ ] No [ ]. If the
answer is YES, please provide the complete address of each branch office or
agent.
•
4.
Are you a party to or have you entered into a service contract, in your
own name or for your own behalf, with any ocean common carrier for the
transportation of cargo in the foreign commerce of the United States? Yes [
] No [ ]
•
5.
If the answer to number 4 is YES, provide complete details of each
arrangement, including service contract number(s), name of the ocean
common carrier(s), and name(s) of any other entities participating under
such contract.
13
THE AUDIT LETTER TRAPS (elected items from audit letter)
continued ---NVOCC
•
6. Have you ever accessed a service contract which you did not sign on your own behalf
either as an NVOCC or as an ocean freight forwarder acting on behalf of your principal?
Yes [ ] No [ ].
•
7.
If your answer to number 6 is YES, provide complete details, including service
contract
number(s), name of the ocean common carrier(s), and name(s) of shipper signatory to
each service contract.
•
•
•
12.
In lieu of NVOCC tariff rates, did your company offer NVOCC service arrangements
(NSA) to your customers during 2011? Yes [ ] No [ ].
If yes, how many NSA did you make available in 2011? (For info, see 46 CFR Part 531.)
•
13.
In lieu of NVOCC tariff rates, did your company offer NVOCC negotiated rate
arrangements (NRA) to your customers during 2011? Yes [ ] No [ ].
•
If yes, how many NRAs did you make available in 2011? (For info, see 46 CFR Part 532.)
•
NOTICE:
date.
Please be advised that an on-site investigation may be scheduled at a later
14
FMC
SERVICE CONTRACT REVIEWS
MOST NVOCC COMPROMISED PENALTIES INVOLVE THE FOLLOWING
SCENARIOS:
1.
Foreign NVOCC enters service contract as shipper party and
provides a similar rate to co-loading NVOCC. Co-loading
formalities are not observed. What are the co-loading
formalities?
2.
Foreign NVOCC who is not registered with FMC or licensed,
acting as Agent for licensed NVOCC, enters service contract
with a carrier as Agent. It identifies the U.S. NVOCC on the
“Consignee” box of the Master bill of lading, but issues its
own housebill. Is it sufficient to meet the FMC regulations
that the licensed NVOCC appear as either “Shipper” or
“Consignee.?” No service contract involved and same agent
uses its own house bill and your company is the Consignee on
the Master b/l.
3.
U.S. licensed NVOCC enters service contract and allows
foreign FMC registered NVOCC agent to issue its own
housebill on the service contract. Is that permissilbe if the
foreign NVOCC is shown as “affiliate.” What is an affiliate?
15