Notice of Inquiry; Solicitation of Views on Proposal of the Ministry of Transport of the People's Republic of China for Adjustment of the Amount for the FMC Optional Bond Rider, 34945-34947 [2011-14860]

Agencies

• Federal Maritime Commission

[Federal Register Volume 76, Number 115 (Wednesday, June 15, 2011)]
[Proposed Rules]
[Pages 34945-34947]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-14860]


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FEDERAL MARITIME COMMISSION

46 CFR Part 515

[Docket No. 11-09]


Notice of Inquiry; Solicitation of Views on Proposal of the 
Ministry of Transport of the People's Republic of China for Adjustment 
of the Amount for the FMC Optional Bond Rider

Issued: June 10, 2011.
AGENCY: Federal Maritime Commission.

ACTION: Notice of inquiry.

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SUMMARY: The Federal Maritime Commission (``FMC'' or ``Commission'') is 
issuing this Notice of Inquiry (``NOI'') to solicit public comment on 
the Ministry of Transport of the People's Republic of China's proposal 
to the Commission to amend the financial responsibility requirements of 
regulations set forth in Appendix E to subpart C of part 515--Optional 
Rider for Additional NVOCC Financial Responsibility (Optional Rider to 
Form FMC 48) [Form 48A] (China Bond Rider).

DATES: Responses are due on or before July 15, 2011.

ADDRESSES: Submit comments to:

Karen V. Gregory, Secretary, Federal Maritime Commission, 800 North 
Capitol Street, NW., Room 1046, Washington, DC 20573-0001.
Or e-mail non-confidential comments to: Secretary@fmc.gov. (E-mail 
comments as attachments in Microsoft Word or PDF.)

FOR FURTHER INFORMATION CONTACT: Rebecca A. Fenneman, General Counsel, 
Office of the General Counsel, Federal Maritime Commission, 800 North 
Capitol Street, NW., Suite 1018, Washington, DC 20573-0001. Telephone: 
(202) 523-5740. E-mail: RFenneman@fmc.gov.

SUPPLEMENTARY INFORMATION:
    Submit Comments: Non-confidential filings may be submitted in hard 
copy or by e-mail as an attachment (in Microsoft Word or PDF) addressed 
to Secretary@fmc.gov on or before July 15, 2011. Include in the subject 
line: ``Docket No. 11-09-FMC Optional Bond Rider.'' To help assure that 
all potential respondents will provide usefully detailed information in 
their submissions, the Commission will provide confidential treatment 
to the extent allowed by law for those submissions, or parts of 
submissions, for which the parties request confidentiality. Responses 
to this inquiry that seek confidential treatment must be submitted in 
hard copy by U.S. mail or courier. Confidential filings must be 
accompanied by a transmittal letter that identifies the filing as 
``confidential'' and describes the nature and extent of the 
confidential treatment requested. When submitting documents in response 
to the NOI that contain confidential information, the confidential copy 
of the filing must consist of the complete filing and be marked by the 
filer as ``Confidential-Restricted,'' with the confidential material 
clearly marked on each page. When a confidential filing is submitted, 
an original and one additional copy of the public version of the filing 
must be submitted. The public version of the filing should exclude 
confidential materials, and be clearly marked on each affected page, 
``confidential materials excluded.'' Questions regarding filing or 
treatment of confidential responses to this inquiry should be directed 
to the Commission's Secretary, Karen V. Gregory, at the telephone 
number or e-mail provided above.

Background

    On April 15, 2011, the Federal Maritime Commission (FMC or 
Commission) received a communication

[[Page 34946]]

from the Maritime Administration, U.S. Department of Transportation, 
transmitting a request from the Ministry of Transport (MOT) of the 
People's Republic of China (China or PRC) to revise the Commission's 
regulations at Appendix E to subpart C of part 515--Optional Rider for 
Additional NVOCC Financial Responsibility (Optional Rider to Form FMC 
48) [Form 48A] (China Bond Rider). These documents are available to the 
public on the Commission's Web site at https://www.fmc.gov.
    Pursuant to an Annex to the 2003 bilateral Maritime Agreement 
between the United States and the People's Republic of China, the PRC 
does not require U.S. Non-Vessel-Operating Common Carriers (NVOCCs) to 
make a cash deposit in a Chinese bank as would otherwise be required by 
Chinese regulations, as long as the NVOCC:
    (1) Is a legal person registered by U.S. authorities;
    (2) Obtains an FMC license as an NVOCC; and
    (3) Provides evidence of financial responsibility in the total 
amount of Chinese Renminbi (RMB) 800,000 or U.S. $96,000.
    An FMC-licensed U.S. NVOCC that voluntarily provides an additional 
surety bond in the amount of $21,000 (denominated in USD or RMB), which 
by its conditions is available for potential claims of the MOT (as well 
as other Chinese agencies) for violations of the Chinese Regulations on 
International Maritime Transportation, would be able to register in the 
PRC without paying the cash deposit otherwise required by Chinese law 
and regulation.
    In 2004, the Commission issued a Notice of Proposed Rulemaking 
(NPR) to explore mechanisms for NVOCCs to file proof of such additional 
financial responsibility. 69 FR 4271 (January 29, 2004). The Commission 
received comments in response to the NPR from the National Customs 
Brokers and Forwarders Association of America, Inc. (NCBFAA), American 
Surety Association (ASA), and the Surety Association of America (SAA). 
The NPR arose from a Commission order issued January 22, 2004 granting 
in part and denying in part a petition for rulemaking from NCBFAA. See 
Petition No. P10-03, Petition of the National Customs Brokers and 
Forwarders Association of America, Inc. for Rulemaking, 30 S.R.R. 76 
(FMC 2004). The proposed rule granted NCBFAA's petition in most 
substantive respects. On April 1, 2004, the Commission issued a final 
rule which amended its regulations governing proof of financial 
responsibility for ocean transportation intermediaries to allow an 
optional rider to be filed with a licensed NVOCC's proof of financial 
responsibility to provide additional proof of financial responsibility 
for such carriers serving the U.S. oceanborne trade with the PRC. 
Docket No. 04-02, Optional Rider for Proof of Additional NVOCC 
Financial Responsibility, 30 S.R.R. 179 (FMC 2004).
    MOT has now requested that the Commission review its financial 
responsibility regulations set forth in 46 CFR 515.21 et seq. MOT 
asserts that the exchange rate between the USD and the RMB has risen 
from 1:8.276 in 2003 to 1:6.536 at present, an increase of 
approximately 21.02%. Consequently, MOT asserts, the amount of 96,000 
USD is inadequate to meet 800,000 RMB at the current exchange rate. 
Specifically, MOT requests that the regulation be revised to include a 
provision that would allow for adjustments to the USD amount required 
in a NVOCC optional bond rider covering transportation activities in 
the U.S./China trades when the USD and the RMB exchange rate fluctuates 
20% higher or lower than that of the last adjustment. MOT also proposes 
that the adjustment be jointly approved by the U.S. and the PRC at the 
bilateral maritime consultative meeting of the same year. Finally, if 
this proposal is adopted, the MOT also proposes that the existing total 
required bond amount of 96,000 USD, be increased to 122,000 USD, which, 
MOT asserts, is the equivalent amount of 800,000 RMB at the present 
exchange rate.
    The questions below seek to solicit comments on how the amendment 
of the financial responsibility requirement would affect business 
operations. Commenters may address any or all of the questions and/or 
submit any comments on the optional bond rider generally as well as the 
effects of an adjustment to the optional bond rider not addressed by 
any of these questions. Please identify the specific question you are 
responding to when providing comments.

Questions

    1. Describe how, and to what extent, the optional rider to the 
required NVOCC bond has impacted your company's business operations? 
Does this make for more certainty in your business operation? Has the 
optional rider to the required NVOCC bond impacted your overall 
business costs? If so, how?
    2. What do you see as the advantages and disadvantages of an 
adjustment to the current optional rider to the required NVOCC bond?
    3. Please explain whether, and if so, how significantly your 
business costs/operations would be affected by a provision that allows 
for adjustments to the U.S. Dollar amount required in a NVOCC optional 
China bond rider when the USD (U.S. Dollar) and the RMB (Renminbi) 
exchange rate fluctuates 20% higher or lower.
    Along with comments, respondents should provide their name, their 
title/position, contact information (e.g., telephone number and/or e-
mail address), name and address of company or other entity and type of 
company or entity (e.g., carrier, exporter, importer, trade 
association, etc.).
    Responses to this Notice of Inquiry will help the Commission 
ascertain more precisely how the impact of potentially changing the 
financial responsibility requirement of the optional rider to the 
required NVOCC bond would affect U.S. ocean liner commerce, the ocean 
liner industry, and the economy with a view to determining whether 
additional analyses or action by the Commission may be necessary.
    To promote maximum participation, the NOI questions will be 
published in the Federal Register and on the Commission's Web site at 
https://www.fmc.gov in a downloadable text or pdf file. They can also be 
obtained by contacting the Commission's Secretary, Karen V. Gregory, by 
telephone at (202) 523-5725 or by e-mail at secretary@fmc.gov. Please 
indicate whether you would prefer a hard copy or an e-mail copy of the 
NOI questions. Non-confidential comments may be sent to 
secretary@fmc.gov as an attachment to an e-mail submission. Such 
attachments should be submitted in Microsoft Word or text-searchable 
PDF.
    The Commission anticipates that filed comments will be made 
publicly available on its Web site. Public availability of comments 
will likely improve public awareness of the MOT request, and generate 
input that the Commission can consider in analyzing the potential 
impact on the industry of adjustments in the current regulations and 
requirements concerning the optional rider to the required NVOCC bond. 
Nevertheless, some commenting parties may wish to include commercially 
sensitive information as relevant or necessary in their responses by 
way of explaining their liner shipping experiences or detailing their 
responses in practical terms. To help assure that all potential 
respondents will provide usefully detailed information in their 
submissions, the Commission will provide confidential

[[Page 34947]]

treatment to the extent allowed by law for those submissions, or parts 
of submissions, for which the parties request confidentiality.

    By the Commission.
Rachel E. Dickon,
Assistant Secretary.
[FR Doc. 2011-14860 Filed 6-14-11; 8:45 am]
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