The Federal Maritime Commission has entered into compromise agreements with three different companies resulting in the collection of more than $2.3 million in civil penalty payments, and commitments by each company to reform specific business practices.
The agreements are the result of investigations by the Commission’s Bureau of Enforcement, Investigations, and Compliance (BEIC).
CMA-CGM, S.A. (CMA-CGM), an ocean common carrier, paid $1,975,000 to resolve allegations that it overbroadly defined and applied its definition of merchant in a bill of lading to demand payment from a third party who should not have been billed. CMA-CGM has terminated this practice and ensures future compliance by amending its U.S. tariff rules to limit the definition of merchant in its bills of lading to shippers, consignees, and persons with a beneficial interest in the cargo as defined by Commission regulations at 46 C.F.R. § 515.2(b). CMA-CGM agreed that, in addition to paying civil penalties, it will also furnish restitution to impacted third parties in the form of refunds and waivers. The agreement includes CMA-CGM’s stated commitment to comply with the Demurrage and Detention Billing Rule (46 C.F.R. Part 541) upon the rule’s effective date of May 28, 2024.
Vanguard Logistics Services (USA), Inc. (Vanguard), an ocean transportation intermediary (OTI), paid $175,000 to resolve allegations that it knowingly and willfully accepted cargo from, or transported cargo for, the accounts of OTIs that did not have bonds, insurance, or other sureties as required by law. Vanguard has agreed to undertake an audit of its internal practices and procedures and will provide quarterly updates to BEIC on the progress of the audit as well as a report of remedial actions it takes in response to the audit’s findings.
Shipco Transport, Inc. (Shipco), an OTI, paid $155,000 to resolve three allegations of misconduct. First, that it knowingly and willfully accepted cargo from or transported cargo for the accounts of OTIs that did not have bonds, insurance, or other sureties as required by law. Second, that it allowed an unlicensed OTI to obtain transportation for property at less than the rates or charges that would otherwise be applicable. Third, that it allowed another OTI to obtain transportation for property at less than the rates or charges that would otherwise be applicable by providing access to service contracts of an ocean common carrier to which the OTI was not a signatory.
Both Vanguard and Shipco have agreed in their respective compromise agreements to fully cooperate with BEIC in any future investigatory or enforcement efforts.
Compromise agreements are reached prior to the Commission initiating formal enforcement actions. The three companies did not admit to any violations of the law.
Penalty payments are deposited into the General Fund of the United States. The Federal Maritime Commission receives no portion from any financial penalties collected.