Possible Revocation of Ocean Transportation Intermediary License No. 022025 Cargologic USA LLC; Order To Show Cause, 10152-10153 [2014-03731]

Agencies

• Federal Maritime Commission

[Federal Register Volume 79, Number 36 (Monday, February 24, 2014)]
[Notices]
[Pages 10152-10153]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-03731]



[[Page 10152]]

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FEDERAL MARITIME COMMISSION

[Docket No. 14-01]


Possible Revocation of Ocean Transportation Intermediary License 
No. 022025 Cargologic USA LLC; Order To Show Cause

    February 18, 2014. The Federal Maritime Commission (Commission) 
deems it appropriate and in the public interest that a proceeding be, 
and hereby is, instituted pursuant to sections 11 and 19 of the 
Shipping Act of 1984 (Shipping Act), 46 U.S.C. Sec. Sec.  41302 and 
40903, directing respondent Cargologic USA LLC a licensed non-vessel-
operating common carrier (NVOCC) and ocean freight forwarder (OFF), to 
show cause why its Ocean Transportation Intermediary license should not 
be revoked for cause.
    Based on information provided to it, the Commission's Bureau of 
Enforcement makes the following allegations:

Statement of Facts Constituting Basis for Commission Action

    1. Cargologic USA LLC (Cargologic) is a New York limited liability 
company, organized in July 2005.
    2. Cargologic has been licensed to operate as an ocean 
transportation intermediary (OTI) pursuant to FMC license No. 022025 
since September 2011.
    3. According to records maintained by the Commission's Bureau of 
Certification and Licensing (BCL), Cargologic maintains its principal 
offices at 182-16 149th Road--Suite 212, Springfield Gardens, New York 
11413.
    4. BCL records identify the principal of Cargologic as Alex 
Epshteyn, President and Secretary.
    5. Matvey Gurfinkel was approved as the sole Qualifying Individual 
(QI) for Cargologic.
    6. Upon information and belief, Mr. Gurfinkel was no longer 
employed with nor serving as QI for Cargologic as of March 2013.
    7. By correspondence mailed March 25, 2013 to Cargologic's 
principal office, BCL notified Cargologic of the Commission's 
requirement that all OTI licensees must maintain an active QI.
    8. By correspondence mailed November 21, 2013 to Cargologic's 
principal office, BCL again notified Cargologic of the Commission's 
requirement that all OTI licensees must maintain an active QI.
    9. By correspondence emailed December 11, 2013 to Mr. Epshteyn, BCL 
again notified Cargologic of the Commission's requirement that all OTI 
licensees must maintain an active QI.
    10. The March 25, 2013 and November 21, 2013 letters requested 
Cargologic to timely comply with Commission regulations by submitting 
an application to replace its QI.
    11. The December 11, 2013 email requested Cargologic to timely 
comply with Commission regulations by submitting an application to 
replace its QI.
    12. Cargologic has neither responded to BCL's letters nor submitted 
an application for a replacement QI.

The Commission's Jurisdiction and Requirements of Law

    13. Under 46 U.S.C. Sec.  41302(a), the Commission is empowered to 
investigate any conduct or agreement that the Commission believes may 
be in violation of the Shipping Act.
    14. Section 19 (c) of the Shipping Act, 46 U.S.C. Sec.  40903 (a), 
provides that the Commission:

. . . after notice and opportunity for hearing, shall suspend or 
revoke an ocean transportation intermediary's license if the 
Commission finds that the ocean transportation intermediary--(1) is 
not qualified to provide intermediary services; or (2) willfully 
failed to comply with a provision of this part or with an order or 
regulation of the Commission.

    15. The Commission's implementing regulations at 46 CFR Sec.  
515.16(a) provide that an OTI license be revoked or suspended for any 
of the following reasons:
     (i) Violation of any provision of the Act, or any other statute or 
Commission order or regulation related to carrying on the business of 
an ocean transportation intermediary;
     (ii) Failure to respond to any lawful order or inquiry by the 
Commission;
     (iii) Making a materially false or misleading statement to the 
Commission in connection with an application for a license or an 
amendment to an existing license;
     (iv) Where the Commission determines that the licensee is not 
qualified to render intermediary services; or
     (v) Failure to honor the licensee's financial obligations to the 
Commission.
    16. Commission regulations at 515.11(b) require all licensees to 
maintain an active QI. 46 CFR Sec.  515.11(b).
    17. Commission regulations at 515.12(d) require each licensee to 
notify the Commission of any changes in fact to its original license 
application (form FMC-18) within thirty (30) days after such change(s) 
occurs. 46 CFR Sec.  515.12(d).
    18. Commission regulations at 515.18(c) require that, when a QI no 
longer serves in a full-time active capacity with the licensee, the 
licensee must furnish to the Commission the name(s) and detailed 
intermediary experience of any officer who may qualify the licensee 
within thirty (30) days after its QI no longer serves in an active 
capacity. 46 CFR Sec.  515.18(c).
    19. Commission regulations at 515.31(g) require licensees to 
respond promptly to any lawful inquiries from any authorized 
representative of the Commission. 46 CFR Sec.  515.31(g).

Basis for Revocation or Suspension of Respondent's Oti License

    20. The Commission previously has found that the sanction of 
revocation is appropriate when the Commission can no longer rely upon 
the honesty and integrity of the licensee, or of its principals, to the 
extent necessary to insure future conduct within the confines of the 
statutes and regulations. AAA Nordstar Line Inc.--Revocation of License 
No. 12234, 29 S.R.R. 663 (FMC, 2002); Independent Ocean Freight 
Forwarder License--E.L. Mobley Inc., 21 F.M.C. 845 (FMC, 1979); 
Independent Ocean Freight Forwarder Application--Lesco Packing Inc., 19 
F.M.C. 132 (FMC, 1976).
    21. The Commission also will issue cease and desist orders based on 
demonstrated Shipping Act violations and revocation of OTI licenses. 
Revocation of Ocean Transportation Intermediary License No. 021899--
Trans World Logistics Corp., 32 S.R.R. 758 (FMC, 2012); Revocation of 
OTI License No. 016019N--Central Agency of Florida, Inc., 31 S.R.R. 486 
(FMC, 2008); Commonwealth Shipping Ltd.--Materially False Statements, 
29 S.R.R. 1408 (FMC, 2003).
    22. Cargologic's failure to submit to the Commission an amended 
Form FMC-18 Rev. advising BCL of changes in the OTI's QI and officers 
within thirty (30) days after such changes occurred establish that 
Cargologic is no longer qualified to provide intermediary services 
within the meaning of 46 U.S.C. Sec.  40903.
    23. Cargologic's failure to respond to lawful inquiries from the 
Commission establish that Cargologic is no longer qualified to provide 
intermediary services within the meaning of 46 U.S.C. Sec.  40903.
    24. Cargologic has failed to maintain an active QI since March, 
2013, in violation of 46 CFR Sec.  515.11(b).
    25. Cargologic has failed to timely notify the Commission of Mr. 
Gurfinkel's separation from Cargologic, in violation of 46 CFR Sec.  
515.12(d).

[[Page 10153]]

    26. Cargologic has failed to timely replace its QI, in violation of 
46 CFR Sec.  515.18(c).
    27. Cargologic has failed to respond to BCL's correspondence of 
March 25, 2013, November 21, 2013, and December 11, 2013, in violation 
of 46 CFR Sec.  515.31(g).
    28. Cargologic is no longer qualified to provide intermediary 
services within the meaning of 46 CFR Sec.  515.16(a).

Order

    Now therefore, it is ordered That, pursuant to Sections 11, 14 and 
19 of the Shipping Act, 46 U.S.C. Sec. Sec.  41302, 41304, 40903(a)(2), 
Cargologic USA LLC is directed to show cause no later than March 21, 
2014, why the Commission should not revoke its license inasmuch as the 
licensee is otherwise not qualified to render intermediary services;
    It is further ordered That, pursuant to Sections 11, 14 and 19 of 
the Shipping Act, 46 U.S.C. Sec. Sec.  41302, 41304, 40903(a)(2), 
Cargologic USA LLC is directed to show cause, no later than March 21, 
2014, why the Commission should not order it to cease and desist from 
operating as an ocean transportation intermediary in the foreign trade 
of the United States inasmuch as the licensee is otherwise not 
qualified to render intermediary services;
    It is further ordered That, this proceeding be limited to the 
submission of affidavits of fact and memoranda of law;
    It is further ordered That, any person having an interest and 
desiring to intervene in this proceeding shall file a petition for 
leave to intervene in accordance with Rule 68 of the Commission's Rules 
of Practice and Procedure, 46 CFR Sec.  502.68. Such petition shall be 
accompanied by the petitioner's memorandum of law and affidavit of 
fact, if any, and shall be filed no later than March 21, 2014;
    It is further ordered That, Cargologic USA LLC be named as 
Respondent in this proceeding. Affidavits of fact and memoranda of law 
shall be filed by Respondent and any intervenors in support of 
Respondent no later than March 21, 2014;
    It is further ordered That, the Commission's Bureau of Enforcement 
(BOE) be made a party to this proceeding;
    It is further ordered That, reply affidavits and memoranda of law 
shall be filed by BOE and intervenors in opposition to Respondent no 
later than April 7, 2014;
    It is further ordered That:
    (a) Should any party believe that an evidentiary hearing is 
required, that party must submit a request for such hearing together 
with a statement setting forth in detail the facts to be proved, the 
relevance of those facts to the issues in this proceeding, a 
description of the evidence which would be adduced, and why such 
evidence cannot be submitted by affidavit; and
    (b) Any request for evidentiary hearing shall be filed no later 
than April 7, 2014;
    It is further ordered That, notice of this Order to Show Cause be 
published in the Federal Register, and that a copy thereof be served 
upon Respondent at its last known address;
    It is further ordered That, all documents submitted by any party of 
record in this proceeding shall be filed in accordance with Rule 2 of 
the Commission's Rules of Practice and Procedure, 46 CFR Sec.  502.2, 
as well as mailed directly to all parties of record;
    Finally, it is ordered That, pursuant to the terms of Rule 61 of 
the Commission's Rules of Practice and Procedure, 46 CFR Sec.  502.61, 
the final decision of the Commission in this proceeding shall be issued 
no later than June 24, 2014.

    By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2014-03731 Filed 2-21-14; 8:45 am]
BILLING CODE 6730-01-P