FMC Votes to Issue Final Rule on NVOCC Rate Tariffs Exemption by Feb 23, Etc.
At its February 16, 2011 meeting, the Federal Maritime Commission voted to take several steps to reduce regulatory burdens, including approving by a 3-1 vote a draft final rule to allow licensed non-vessel-operating common carriers (NVOCCs) that enter into Negotiated Rate Agreements with their customers to be exempt from the requirement of publishing their rates in tariffs if they meet certain conditions.
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The FMC also made decisions to review its regulations and update its rules of practice and procedure.
NRA Final Rule Expected by Feb 23, to Take Effect 45 Days After FR Pub
According to the FMC, the final rule will relieve more than 3,300 licensed NVOCCs from the costs and burdens of publishing in tariffs the rates they charge for cargo shipments. The Shipping Act gives the FMC authority to grant exemptions from its requirements if doing so will not result in substantial reduction in competition or detriment to commerce.
FMC states that the final rule will be issued by February 23, 2011, and NVOCCs who follow its conditions will be relieved of rate publication requirements 45 days after the rule is published in the Federal Register.
(See ITT’s Online Archives or 05/07/10 and 02/09/11 news, 10050749 and 11020924, for BP summaries of the proposed rule and the trade’s comments on it, including the belief that the rule’s exemption should also apply to registered but unlicensed NVOCCS, such as those that are foreign-based.)
Exemption to be Limited to U.S.-Licensed NVOCCs, but Could be Expanded Later
The final rule approved by the FMC limits the exemption to U.S.-licensed NVOCCs, but Commissioners in the majority said they would commence proceedings to receive public input on potential future modifications, including the possibility of extending the exemption to foreign, unlicensed NVOCCs.
Brennan Dissented, Says FMC Does Not Have Authority to Rewrite Shipping Act
Commissioner Brennan, the lone dissenter, stated: "The Commission lacks the authority to rewrite the Shipping Act by making tariff publication optional for licensed NVOCCs. Congress clearly took up the tariff issue with the 1998 Ocean Shipping Reform Act and determined to maintain tariff requirements for all common carriers. Three commissioners of the Federal Maritime Commission should not, and cannot, trump the judgment made by a previous Congress and President on this issue."
FMC Intends to Prepare a Plan to Apply President’s EO to Improve Regulation, Regulatory Review
The FMC also declared its intention to prepare a plan to systematically review its existing rules to make them more effective or less burdensome in achieving the agency’s regulatory objectives. This plan will follow the guidance of President Obama’s January 2011 Executive Order 13563, which instructs agencies to prepare a preliminary plan for the review within 120 days. The FMC also declared its intent to give full consideration to the additional provisions of the EO during its rulemaking processes. Although EO 13563 does not apply to independent agencies such as the FMC, the White House has encouraged independent agencies to voluntarily follow its guidance.
FMC Also Voted to Update Rules of Practice and Procedure
In addition, the FMC voted unanimously to update its filing requirements and clarify its procedures for informal proceedings for small claims. The changes reduce filing burdens on the public, are eco-friendly, and enhance privacy protections for parties to FMC proceedings. The rule change approved is the first step in the FMC’s ongoing project to make its procedural rules more clear, modern, efficient, and environmentally friendly.