Regulatory Amendments Implementing the Frank LoBiondo Coast Guard Authorization Act of 2018, 9676-9684 [2020-02493]

Download as PDF 9676 Federal Register / Vol. 85, No. 34 / Thursday, February 20, 2020 / Rules and Regulations submit the required documentation of legally enforceable floodplain management measures after this rule is published but prior to the actual suspension date. These communities will not be suspended and will continue to be eligible for the sale of NFIP flood insurance. A notice withdrawing the suspension of such communities will be published in the Federal Register. In addition, FEMA publishes a Flood Insurance Rate Map (FIRM) that identifies the Special Flood Hazard Areas (SFHAs) in these communities. The date of the FIRM, if one has been published, is indicated in the fourth column of the table. No direct Federal financial assistance (except assistance pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act not in connection with a flood) may be provided for construction or acquisition of buildings in identified SFHAs for communities not participating in the NFIP and identified for more than a year on FEMA’s initial FIRM for the community as having flood-prone areas (section 202(a) of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4106(a), as amended). This prohibition against certain types of Federal assistance becomes effective for the communities listed on the date shown in the last column. The Administrator finds that notice and public comment procedures under 5 U.S.C. 553(b), are impracticable and unnecessary because communities listed in this final rule have been adequately notified. Each community receives 6-month, 90-day, and 30-day notification letters addressed to the Chief Executive Officer stating that the community will be suspended unless the required floodplain management measures are met prior to the effective suspension date. Since these notifications were made, this final rule may take effect within less than 30 days. National Environmental Policy Act. FEMA has determined that the community suspension(s) included in this rule is a non-discretionary action and therefore the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) does not apply. Regulatory Flexibility Act. The Administrator has determined that this rule is exempt from the requirements of the Regulatory Flexibility Act because the National Flood Insurance Act of 1968, as amended, Section 1315, 42 U.S.C. 4022, prohibits flood insurance coverage unless an appropriate public body adopts adequate floodplain management measures with effective enforcement measures. The communities listed no longer comply with the statutory requirements, and after the effective date, flood insurance will no longer be available in the communities unless remedial action takes place. Community No. State and location Region IV Florida: Saint Lucie County, Unincorporated Areas. 120285 Regulatory Classification. This final rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866 of September 30, 1993, Regulatory Planning and Review, 58 FR 51735. Executive Order 13132, Federalism. This rule involves no policies that have federalism implications under Executive Order 13132. Executive Order 12988, Civil Justice Reform. This rule meets the applicable standards of Executive Order 12988. Paperwork Reduction Act. This rule does not involve any collection of information for purposes of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. List of Subjects in 44 CFR Part 64 Flood insurance, Floodplains. Accordingly, 44 CFR part 64 is amended as follows: PART 64—[AMENDED] 1. The authority citation for Part 64 continues to read as follows: ■ Authority: 42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of 1978, 3 CFR, 1978 Comp.; p. 329; E.O. 12127, 44 FR 19367, 3 CFR, 1979 Comp.; p. 376. § 64.6 [Amended] 2. The tables published under the authority of § 64.6 are amended as follows: ■ Effective date authorization/cancellation of sale of flood insurance in community Current effective map date May 31, 1974, Emerg; August 17, 1981, Reg; February 19, 2020, Susp. Feb. 19, 2020 .......... Date certain Federal assistance no longer available in SFHAs Feb. 19, 2020. *-do- =Ditto. Code for reading third column: Emerg. —Emergency; Reg. —Regular; Susp. —Suspension. Dated: February 4, 2020. Eric Letvin, Deputy Assistant Administrator for Mitigation, Federal Insurance and Mitigation Administration—FEMA Resilience, Department of Homeland Security, Federal Emergency Management Agency. [FR Doc. 2020–02508 Filed 2–19–20; 8:45 am] BILLING CODE 9110–12–P FEDERAL MARITIME COMMISSION 46 CFR Parts 503, 515, and 535 [Docket No. 19–06] RIN 3072–AC77 Regulatory Amendments Implementing the Frank LoBiondo Coast Guard Authorization Act of 2018 Federal Maritime Commission. Final rule. lotter on DSKBCFDHB2PROD with RULES AGENCY: ACTION: The Federal Maritime Commission (Commission) is revising its regulations to implement the provisions of the Frank LoBiondo Coast Guard Authorization Act of 2018. The SUMMARY: VerDate Sep<11>2014 16:08 Feb 19, 2020 Jkt 250001 PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 proposed revisions include amendments to the regulations governing: Commission meetings; ocean transportation intermediary licensing, financial responsibility, and general duties, and the submission of public comments on ocean common carrier and marine terminal operator agreements. The revisions also include miscellaneous updates to the references to statutory provisions reorganized by the LoBiondo Act. DATES: This rule is effective February 20, 2020. FOR FURTHER INFORMATION CONTACT: Rachel E. Dickon, Secretary; Phone: (202) 523–5725; Email: secretary@ fmc.gov. E:\FR\FM\20FER1.SGM 20FER1 Federal Register / Vol. 85, No. 34 / Thursday, February 20, 2020 / Rules and Regulations SUPPLEMENTARY INFORMATION: II. Summary of NPRM Table of Contents In the NPRM, the Commission focused on the statutory changes that warranted corresponding revisions to the Commission’s regulations. The proposed changes included: • Revising several Commission regulations to update references to statutory provisions; • Revising the regulations governing Commission meetings to include provisions on ‘‘nonpublic collaborative discussions,’’ a new type of meeting established by the LoBiondo Act that is not open to public observation; • Revising the regulations governing OTI licensing and financial responsibility to reflect statutory changes to the types of persons that are required to be licensed and maintain a bond, insurance, or other surety; • Revising the regulations governing the general duties of NVOCCs to reflect amendments to several prohibited acts; and • Revising the regulations related to comments on filed ocean common carrier and marine terminal operator (MTO) agreements to reflect that such comments are now confidential and may not be disclosed by the Commission; The Commission sought comment on these proposed revisions and on whether the Commission should remove the licensed U.S. agent requirement for registered NVOCCs. Although beyond the scope of this current rulemaking, the Commission also invited comments on any regulatory changes necessary to implement other LoBiondo Act provisions not discussed in the NPRM. I. Introduction II. Summary of NPRM III. Comment Summary IV. Revisions to Commission Regulations A. References to Statutory Provisions (Parts 515, 530, 532, 545) B. Commission Meetings (Part 503) C. OTI Licensing, Financial Responsibility, and General Duties (Part 515) 1. Licensing and Financial Responsibility 2. Common Carrier Prohibitions D. Comments on Filed Agreements (Part 535) V. Rulemaking Analyses and Notices lotter on DSKBCFDHB2PROD with RULES I. Introduction On December 4, 2018, the ‘‘Frank LoBiondo Coast Guard Authorization Act of 2018’’ was enacted as Public Law 115–282 (LoBiondo Act or Act). The LoBiondo Act made a number of changes affecting the Federal Maritime Commission (Commission) and the Shipping Act of 1984 (Shipping Act). These included the changes made in Title VII of the Act, referred to as the ‘‘Federal Maritime Commission Authorization Act of 2017,’’ as well as a miscellaneous provision in § 834 of the LoBiondo Act. By Notice of Proposed Rulemaking (NPRM) published in the Federal Register on October 9, 2019, the Commission proposed to revise its regulations to reflect the statutory changes. The Commission also invited comment on whether the statutory changes to the ocean transportation intermediary (OTI) 1 licensing requirements conflicted with the Commission’s regulatory requirement that only licensed OTIs may perform OTI services in the United States for registered nonvessel-operating common carriers (NVOCCs) and whether this requirement should therefore be removed. The NPRM included a 30-day comment period, and the Commission received one comment. After consideration of the comment and for the reasons stated below, the Commission is adopting all of the proposed amendments without substantive change. In addition, the Commission has determined that the licensed U.S. agent requirement for registered NVOCCs conflicts with the statutory licensing and financial responsibility provisions as amended by the LoBiondo Act, and is removing that requirement. 1 OTIs include non-vessel-operating common carriers (NVOCCs) and ocean freight forwarders (OFFs). 46 U.S.C. 40102(20). VerDate Sep<11>2014 16:08 Feb 19, 2020 Jkt 250001 III. Comment Summary The Commission received a single comment from Hecny Brokerage Services, Inc., on its behalf and that of its affiliates (Hecny). Hecny is a licensed NVOCC. The comment is a letter addressed to the National Customs Brokers and Forwarders Association of America (NCBFAA), a trade association representing OTIs, air cargo agents, and customs brokers. About NCBFAA, https://www.ncbfaa.org/scripts/4disapi. dll/4DCGI/cms/review.html?Action= CMS_Document&DocID=503& MenuKey=about (last visited Dec. 23, 2019). The letter requests that the NCBFAA file comments on the October 9, 2019 NPRM opposing the elimination of the licensed U.S. agent requirement for registered NVOCCs. Hecny’s reasons for opposing this change are discussed in more detail in Section IV.C below. The Commission received no comments from NCBFAA. PO 00000 Frm 00017 Fmt 4700 Sfmt 4700 9677 IV. Revisions to Commission Regulations A. References to Statutory Provisions (Parts 515, 530, 532, 545) The LoBiondo Act amended 46 U.S.C. 41104 to revise several prohibited acts and added a new prohibited act. Public Law 115–282, 708. As part of those amendments, the Act changed the subsection designations in § 41104. The Commission is therefore revising its regulations to reflect the new subsection designations. B. Commission Meetings (Part 503) The LoBiondo Act amended 46 U.S.C. 303 to exclude certain Commission meetings from the requirements of the Government in the Sunshine Act (5 U.S.C. 552b). Public Law 115–282, 711(a). Under the revised statute, a majority of Commissioners may hold a meeting closed to the public to discuss Commission business if: (1) No vote or official Commission action is taken at the meeting; (2) only Commissioners and employees are present; (3) at least one Commissioner from each political party is present (assuming there are sitting Commissioners from more than one party); and (4) the Commission’s General Counsel is present. 46 U.S.C. 303(c).2 The statute refers to these closed meetings as ‘‘nonpublic collaborative discussions.’’ Although the Commission need not publicize such meetings beforehand or record a complete transcript or minutes, the Commission must, following the meeting, make publicly available a list of individuals present at the meeting and a summary of matters discussed, except for those matters the Commission determines may be withheld from the public under one of the applicable exemptions listed in the Sunshine Act. § 303(c)(2)–(3). For those matters withheld from the public, the Commission must provide a summary with as much general information as possible. § 303(c)(3). The required disclosures must be made within two business days after the meeting, unless the meeting relates to an ongoing proceeding before the Commission, in which case the disclosures must be made on the date of the final Commission decision. § 303(c)(2), (4); see S. Rep. No. 115–89 at 19. Finally, the Act includes provisions clarifying that: (1) The Sunshine Act 2 This exclusion was modeled on a similar provision in the Surface Transportation Board Reauthorization Act of 2015. See S. Rep. No. 115– 89 at 19 (2017) (accompanying S. 1129, an earlier authorization bill that contained many of the provisions later incorporated into the LoBiondo Act); 49 U.S.C. 1303(a)(2). E:\FR\FM\20FER1.SGM 20FER1 9678 Federal Register / Vol. 85, No. 34 / Thursday, February 20, 2020 / Rules and Regulations continues to apply to all meetings other than nonpublic collaborative discussions as described in § 303(c), as well as to any information related to those discussions that the Commission proposes to withhold from the public; and (2) the provisions governing nonpublic collaborative discussions do not authorize the Commission to withhold records accessible to an individual under the Privacy Act of 1974 (5 U.S.C. 552a). § 303(b)(5)–(6). The final rule includes a new section, § 503.84, in part 503 of the Commission’s regulations mirroring the new provisions in 46 U.S.C. 303(c)(1)– (4) and makes necessary conforming revisions to other sections in that part. lotter on DSKBCFDHB2PROD with RULES C. OTI Licensing, Financial Responsibility, and General Duties (Part 515) 1. Licensing and Financial Responsibility The LoBiondo Act amendments expanded the class of persons that must be licensed as OTIs and meet the OTI financial responsibility requirements to include persons that advertise or hold themselves out as OTIs. 46 U.S.C. 40901(a); 40902(a); Public Law 115–282, 707(a), (c). Previously, only persons that acted as OTIs were subject to the licensing and financial responsibility requirements. The Commission is amending the general licensing and financial responsibility requirements in §§ 515.3 and 515.21 to reflect this change.3 The Commission expects this change to have minimal, if any, effects on the universe of entities that must meet the licensing and financial responsibility requirements. In general, an entity that advertises or holds itself out as an OTI also acts as an OTI, and the practical effect of the change is to make it easier for the Commission to enforce the licensing and financial responsibility requirements and prosecute noncompliant OTIs. Instead of having to show that a noncompliant entity actually acted as an OTI, the mere fact that an unlicensed entity advertised or held itself out as an OTI is now sufficient to show a violation of the statute. As described in the NPRM, the LoBiondo Act also includes a new provision clarifying that the OTI licensing and financial responsibility requirements do not apply to a person ‘‘that performs [OTI] services on behalf 3 The proposed regulatory text in the NPRM inadvertently retained a reference to ‘‘acting as an ocean transportation intermediary’’ in § 515.21(a). The final rule does not include this phrase in light of the changes made by the LoBiondo Act. VerDate Sep<11>2014 16:08 Feb 19, 2020 Jkt 250001 of an [OTI] for which it is a disclosed agent.’’ 46 U.S.C. 40901(c); Public Law 115–282, 707(b). The Commission tentatively determined in the NPRM that this statutory change might conflict with the Commission’s regulations at 46 CFR 515.3 requiring that only licensed OTIs may act as U.S. agents to provide OTI services for registered NVOCCs (which are not licensed). As noted above, the Commission received only one comment on this rulemaking from Hecny, which opposed removing this requirement. For the reasons discussed below, the Commission has determined that this requirement, along with the complementary requirement in § 515.3 that registered NVOCCs must use licensed OTIs to provide NVOCC services in the United States, conflict with the new statutory provision at § 40901(c). The Commission is therefore revising § 515.3 to remove these requirements and making corresponding changes to § 515.4, which describes the circumstances when a license is not required. The requirement that only licensed OTIs can provide OTI services on behalf of foreign-based, unlicensed NVOCC principals was originally promulgated after the enactment of the Ocean Shipping Reform Act of 1998 (OSRA), which for the first time required NVOCCs ‘‘in the United States’’ to be licensed. See Final Rule: Licensing, Financial Responsibility Requirements, and General Duties for Ocean Transportation Intermediaries, 64 FR 11156, 11156 (Mar. 8, 1999) (1999 Final Rule); Public Law 105–258, 116; S. Rep. 105–61, at 30–31 (1997). The legislative history of OSRA made clear that it was Congress’s intent for the Commission ‘‘to determine when foreign-based entities conducting business in the United States are to be considered persons in the United States for the purposes of’’ the licensing requirements. See S. Rep. No. 105–61, at 31 (1997); 1999 Final Rule, 64 FR at 11156. In the rulemaking implementing this part of OSRA, the Commission considered several options for defining the class of persons required to have a license. At one end of the spectrum, the Commission considered expansive requirements that would have required licenses for NVOCCs incorporated in the United States or with a physical presence in the United States through another person, e.g., an agent, affiliate, or subsidiary (this option was rejected prior to the publication of the proposed rule). NPRM: Licensing, Financial Responsibility Requirements, and General Duties for Ocean Transportation Intermediaries, 63 FR 70710, 70710 (Dec. 22, 1998) (1998 NPRM). At the PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 other end, the Commission considered a narrow definition that would have only required licenses for NVOCCs incorporated in, resident in, maintaining a physical presence in, or established under the laws of the United States. Id. at 70710–70711. In the final rule, the Commission determined to adopt the current requirements, which fell between the two other approaches in terms of scope, concluding that this middle-of-the-road approach was ‘‘the most fair and equitable,’’ ‘‘would increase competition consistent with the intent of OSRA,’’ and represented ‘‘a good step towards leveling the playing field between OTIs in the United States who are within the Commission’s jurisdictional reach and those who are outside of that reach.’’ 1999 Final Rule, 64 FR at 11157. The final rule provided that a person is considered to be ‘‘in the United States’’ if such person is resident in, or incorporated or established under, the laws of the United States, but required that only licensed OTIs act as agents providing OTI services in the United States for foreign-based, unlicensed NVOCCs. See id.; 46 CFR 515.3 (2000). In 2006, an OTI petitioned the Commission for a declaratory order regarding the lawfulness of a licensed OTI using unlicensed agents to provide OTI services to the public. After receiving comments, the Commission rejected the petition, determining that the use of unlicensed agents was unlawful because an agent that provides OTI services ‘‘act[s] as an ocean transportation intermediary’’ and is thereby subject to the licensing requirement in section 19 of the Shipping Act (currently codified at 46 U.S.C. 40901(a)). In the Matter of the Lawfulness of Unlicensed Persons Acting as Agents for Licensed Ocean Transportation Intermediaries—Pet’n for Declaratory Order, 31 S.R.R. 185, 2008 FMC LEXIS 9 (FMC 2008). Landstar, a licensed NVOCC, petitioned the U.S. Court of Appeals for the D.C. Circuit to review the Commission’s order. The court vacated the Commission’s order, holding that ‘‘[a]gents providing NVOCC services for licensed NVOCC principals are not NVOCCs (or OFFs) solely by virtue of being agents of NVOCCs,’’ ‘‘[t]hey therefore fall outside the coverage of the statute’s licensing requirement,’’ and ‘‘[t]he Commission lacks authority to compel those agents to obtain licenses.’’ 569 F.3d at 500. On remand, the Commission granted the original petition, ‘‘but only to the extent consistent with the [c]ourt’s decision in Landstar that it is lawful for a licensed OTI to engage an unlicensed E:\FR\FM\20FER1.SGM 20FER1 lotter on DSKBCFDHB2PROD with RULES Federal Register / Vol. 85, No. 34 / Thursday, February 20, 2020 / Rules and Regulations person to act as its agent to perform OTI services on behalf of the disclosed licensed OTI.’’ In the Matter of the Lawfulness of Unlicensed Persons Acting as Agents for Licensed Ocean Transportation Intermediaries—Pet’n for Declaratory Order, 31 S.R.R. 1058, 2009 FMC LEXIS 25 (FMC 2009). In 2014, the Commission proposed to amend § 515.3 to delete a requirement that separately incorporated branch offices be licensed when they serve as an agent for a licensed OTI. NPRM: Ocean Transportation Intermediary Licensing and Financial Responsibility Requirements, and General Duties, 79 FR 61544, 61545 (Oct. 10, 2014). The Commission proposed to retain the requirement that only licensed OTIs may perform OTI services in the United States for foreign-based, unlicensed NVOCCS, but to replace the term ‘‘unlicensed ocean transportation intermediary’’ with the term ‘‘registered NVOCC’’ to reflect the Commission requirement that foreign-based, unlicensed NVOCCs register with the Commission. See id.; Final Rule: NonVessel-Operating Common Carrier Negotiated Rate Arrangements; Tariff Publication Exemption, 78 FR 42866 (July 18, 2013). Some commenters argued that the requirement regulated agents in contravention of Landstar. See Final Rule: Ocean Transportation Intermediary Licensing and Financial Responsibility Requirements, and General Duties, 80 FR 68722, 68723 (Nov. 5, 2015). In response, the Commission recited the rationale for the requirement in the 1999 final rule and explained that the requirement was necessary in order to ensure that the distinction created by Congress between NVOCCs ‘‘in the United States’’ that require a license and foreign-based NVOCCs that do not require a license would not be thwarted. Id. The Commission further noted that the requirement had long been in effect and stated that it was consistent with Landstar in that it regulated the conduct of OTI principals, not agents. Id. In its comment, Hecny argues that the focus of the LoBiondo Act was on carrier alliances and the need to provide additional powers to the Commission to protect terminal service and equipment providers. The company asserts that the changes to the OTI statutory provisions were intended to be ‘‘cosmetic’’ changes to reflect the Landstar decision, and there is no history indicating an intent to change the requirement relating to U.S. agents for registered NVOCCs. Hecny further states that it is unaware of any problems with the licensed U.S. agent requirement and that there are ample reasons supporting it. According VerDate Sep<11>2014 16:08 Feb 19, 2020 Jkt 250001 to Hecny, the requirement: (1) Enhances the Commission’s ability to timely receive responses to its requests because licensed entities are aware of the types of records responsive to such requests and know that they could lose their own license if they fail to act responsibly; and (2) gives customers confidence that they are being treated properly because a licensed entity is responsible for handling their goods and is held to the standards set forth in the Commission’s regulations. Hecny concludes by asserting that there is no reason for changing the current requirement and believes that serious problems could arise if U.S. agents are not licensed OTIs. After considering the history of the licensed U.S. agent requirement, the language of the relevant LoBiondo Act provision, and the comment submitted, the Commission has determined that the requirement is inconsistent with the new provision at § 40901(c) and must be removed. Section 40901(c) plainly states that disclosed agents performing OTI services on behalf of OTIs are not required to be licensed. The provision does not distinguish between agents performing OTI services on behalf of licensed OTIs versus unlicensed or registered OTIs; all disclosed agents are exempt from the licensing requirement regardless of whether the OTI principal is licensed. The relevant provisions of § 515.3 of the Commission’s regulations include dual complementary requirements: (1) Registered NVOCCs must use licensed OTIs to provide NVOCC services in the United Stated; and (2) only licensed OTIs may act as agents to provide OTI services in the United States for registered NVOCCs. These requirements are applicable to the registered NVOCC principal and not the U.S. agent, i.e., if a U.S. agent performing OTI services for a registered NVOCC is unlicensed, the registered NVOCC, not the agent, is considered to have violated the regulation. See 80 FR at 68723. Regardless of whether the requirement applies to the registered NVOCC principal or the U.S. agent, however, the result is the same: U.S. agents performing OTI services on behalf of registered NVOCCs must have a license. This result clearly conflicts with § 40901(c) and the decision by Congress to exempt such agents from the licensing requirement. Under § 40901, as amended, the Commission lacks the authority to compel these U.S. agents to obtain licenses.4 See Landstar, 569 F.3d 4 Although disclosed agents of registered NVOCCs may not face the risk of noncompliance with the Commission’s regulations and potential civil PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 9679 at 500 (holding that because agents providing NVOCC services for licensed NVOCCs principals ‘‘fall outside the coverage of the statute’s licensing requirement, . . . [t]he Commission lacks authority to compel those agents to obtain licenses’’). In the absence of such authority, the relevant requirements in § 515.3 must be removed. See id. The Commission respectfully disagrees with Hecny’s characterization of the LoBiondo Act’s changes to the OTI provisions as ‘‘cosmetic’’ changes to reflect the Landstar decision. In the NPRM, the Commission speculated that codifying the Landstar decision may have been Congress’s intent, but there is no legislative history to support this theory. In any event, it is presumed ‘‘that Congress ‘says in a statute what it means and means in a statute what it says there,’’’ Rotkiske v. Klemm, 205 L. Ed. 2d 291, 297 (2019) (quoting Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 254 (1992)), and ‘‘neither courts nor federal agencies can rewrite a statute’s plain text to correspond to its supposed purposes.’’ Landstar, 569 F.3d at 498 (citing Norfolk S. Ry Co. v. Sorrell, 549 U.S. 158, 171 (2007); Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 462 (2002)). As the Commission indicated in the NPRM, § 40901(c) is broader than the holding in Landstar. The court in Landstar held that the Commission lacked authority to require that agents of licensed NVOCCs obtain licenses. The new § 40901(c) exempts agents performing OTI services on behalf of an OTI from the licensing and financial responsibility requirements. By its plain language, the exemption in § 40901(c) applies to both agents of NVOCCs and agents of OFFs, as NVOCCs and OFFs both fall within the statutory definition of ‘‘ocean transportation intermediary.’’ See 46 U.S.C. 40102(20).5 And the statutory language does not limit the applicability of the exemption based on whether the OTI principal is licensed, referring to persons that perform ‘‘ocean penalties if they do not obtain the license, § 515.3 compels agents to obtain licenses because it prohibits registered NVOCCs from using unlicensed agents. 5 Although the Landstar decision focused on NVOCCs, the court remarked in dicta and the Commission has historically agreed that the same reasoning applies to agents of licensed OFFs. See Landstar, 569 F.3d at 499 (‘‘But the Commission has no authority to require agents of OFFs who are not themselves OFFs to obtain OFF licenses, just as it has no authority to require agents of NVOCCs who are not themselves NVOCCs to obtain NVOCC licenses.’’); In the Matter of the Lawfulness of Unlicensed Persons Acting as Agents for Licensed Ocean Transportation Intermediaries—Pet’n for Declaratory Order, 31 S.R.R. 1058, 2009 FMC LEXIS 25. E:\FR\FM\20FER1.SGM 20FER1 9680 Federal Register / Vol. 85, No. 34 / Thursday, February 20, 2020 / Rules and Regulations lotter on DSKBCFDHB2PROD with RULES transportation intermediary services on behalf of an ocean transportation intermediary.’’ See 46 U.S.C. 40901(c) (emphasis added). The Commission has consistently interpreted this type of broad language as including both licensed OTIs and foreign-based, unlicensed NVOCCs that are registered with the Commission. See, e.g., PetraPet, Inc. v. Panda Logistics Ltd., 33 S.R.R. 4, 2013 FMC LEXIS 37 (FMC 2013) (finding that a registered NVOCC violated 46 U.S.C. 41102(c), which provides, ‘‘A[n] . . . ocean transportation intermediary may not fail to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property’’ (emphasis added)).6 Therefore, contrary to Hecny’s contentions, § 40901(c) goes beyond the holding in the Landstar decision and applies to U.S. agents performing OTI services for registered NVOCCs as well as those performing services for licensed OTIs. This Commission’s determination that the licensed U.S. agent requirement in 46 CFR 515.3 conflicts with 46 U.S.C. 40901(c) reflects the changed statutory landscape since the 2015 final rule. At that time, the Commission was considering whether the licensed U.S. agent requirement for registered NVOCCs conflicted with the Landstar decision. Notwithstanding some of the arguably broader dicta in the decision, the court in Landstar was focused on whether the agents performing OTI services for licensed NVOCCs were ‘‘act[ing] as’’ OTIs and thus subject to the licensing requirement in § 40901(a). In the 2015 final rule, the Commission considered not only the ‘‘act as’’ language in § 40901(a) and the Landstar decision, but also the other changes made to the licensing requirement by OSRA, specifically the language limiting the requirement to persons ‘‘in the United States.’’ As the Commission noted, the provision as amended imposed the licensing requirement on NVOCCs in the United States but not foreign-based NVOCCs, and the legislative history indicated clear Congressional intent that the Commission determine when foreignbased NVOCCs were to be considered to be ‘‘in the United States’’ and subject to the licensing requirement. 80 FR at 68723. Retaining the licensed U.S. agent 6 The Commission notes that Petra Pet was decided under an earlier interpretation of 46 U.S.C. 41102. See Final Rule: Interpretive Rule, Shipping Act of 1984, 83 FR 64478 (Dec. 17, 2018); 46 CFR 545.4. The Commission’s revised interpretation of the section, however, affects only the types of actions covered by the prohibition, not the types of entities to which it applies. VerDate Sep<11>2014 16:08 Feb 19, 2020 Jkt 250001 requirement reflected an appropriate balance that effectuated Congress’s desire for the Commission to distinguish between NVOCCs that must obtain a license and those that need not, while respecting the ‘‘act as’’ language and the Landstar decision by: (1) Limiting the requirement to U.S. agents of registered NVOCCs; and (2) applying the requirement only to registered NVOCC principals and not to agents. The addition of § 40901(c), however, materially changes this analysis and warrants reconsideration of the licensed U.S. agent requirement. Rather than excluding agents from the licensing requirements based on the interpretation that they do not ‘‘act as an’’ OTI under § 40901(a), § 40901(c) creates an explicit exemption for such agents. Moreover, in the 2015 final rule, the Commission was dealing with multiple facets of a statutory provision enacted in a single piece of legislation. In contrast, the Commission is now faced with reconciling two provisions enacted by different Congresses over 20 years apart. Although the intent of Congress in 1998 was for the Commission to determine whether an NVOCC was ‘‘in the United States’’ and required to be licensed, the recently enacted § 40901(c) has the effect of limiting the Commission’s discretion by foreclosing the agency from requiring agents to obtain a license. Based on the foregoing, the Commission is amending § 515.3 to remove the licensed U.S. agent requirement and to improve readability. The Commission is also making conforming amendments to § 515.4(b), which provides that agents of licensed OTIs are not required to have a license, by revising that provision to cover disclosed agents of any OTI. The Commission shares some of Hecny’s concerns about the potential effects of removing the licensed U.S. agent requirement because U.S. shippers may no longer have the protection of dealing with a licensed agent when working with a foreign-based NVOCC. The Commission believes, however, that any potential negative effects will be mitigated given the Commission’s increased oversight over foreign-based, unlicensed NVOCCs, which have been required to register with the Commission since 2013. See 46 CFR 515.19. The Commission also notes that no other NVOCCs commented on the NPRM and, despite Hecny’s request, NCBFAA elected not to file a comment on this issue. This suggests that Hecny’s concerns may not be widely shared by the licensed NVOCC community. Nevertheless, going forward, the Commission will closely monitor the PO 00000 Frm 00020 Fmt 4700 Sfmt 4700 effect of removing the licensed U.S. agent requirement, and, if necessary, take appropriate action in the future to protect U.S. shippers. Such action may include reconsidering the financial responsibility requirements for foreignbased, registered NVOCCs or reconsidering the interpretation of when an NVOCC is ‘‘in the United States’’ under 46 U.S.C. 40901 and must obtain a license. 2. Common Carrier Prohibitions The LoBiondo Act expanded the common carrier prohibition against knowingly and willfully accepting or transporting cargo for OTIs that do not meet certain Shipping Act requirements. See 46 U.S.C. 41104(a)(11); Public Law 115–282, 708(a)(2)(A). Previously, common carriers were prohibited from knowingly and willfully accepting or transporting cargo for an OTI that did not have a tariff and did not meet the OTI financial responsibility requirements. See 46 U.S.C. 41104(11) (2017). This wording, in effect, limited the prohibition to dealing with noncompliant NVOCCs, as OFFs are not required to have a tariff. See 46 CFR 515.19(g)(1)(vii); 515.27(a). The LoBiondo Act split the provision into two separate prohibitions in 46 U.S.C. 41104(a)(11). The first prohibits common carriers from knowingly and willfully accepting or transporting cargo from an NVOCC that does not have a tariff. The second prohibits common carriers from knowingly and willfully accepting or transporting cargo from an OTI (i.e., NVOCC or OFF) that does not meet the financial responsibility requirements. The Commission’s regulations at 46 CFR 515.19 and 515.27 reflect the earlier version of the prohibition (accepting or transporting cargo for noncompliant NVOCCs). The Commission is therefore amending these sections to reflect the new, broader statutory prohibition. D. Comments on Filed Agreements (Part 535) The LoBiondo Act made several changes to the provisions governing Commission action on agreements. In particular, the LoBiondo Act expanded on the existing requirement that the Commission transmit a notice of an agreement filing to the Federal Register within seven days, adding a requirement that the Commission request interested persons to submit relevant information and documents. 46 U.S.C. 40304(a)(2); Public Law 115–282, 706(a). Although the Commission already includes such requests in its Federal Register notices, see 46 CFR E:\FR\FM\20FER1.SGM 20FER1 lotter on DSKBCFDHB2PROD with RULES Federal Register / Vol. 85, No. 34 / Thursday, February 20, 2020 / Rules and Regulations 535.603, adding this statutory provision renders such comments confidential under 46 U.S.C. 40306, which exempts ‘‘[i]nformation and documents . . . filed with the . . . Commission under [chapter 403]’’ from disclosure under the Freedom of Information Act. Previously, only information provided by the filing parties was protected from disclosure under § 40306. See Final Rule: Rules Governing Agreements by Ocean Common Carriers and Other Persons Subject to the Shipping Act of 1984, 49 FR 45320, 45336 (Nov. 15, 1984) (interpreting the provision (as originally enacted in the Shipping Act of 1984) as only protecting information provided by the filing parties). In addition, the Act included a saving clause stating that nothing in § 706 of the Act or the amendments made to 46 U.S.C. 40304 may be construed to prescribe a specific deadline for the submission of relevant information and documents from interested persons in response to a request for comment on an agreement filing. Public Law 115–282, 706(c). The Commission is revising its regulations in part 535 to address these changes. In particular, the final rule revises the procedures for submitting comments on filed agreements in § 535.603 to reflect that such comments are exempt from disclosure under FOIA and to make conforming changes to the list of confidentially submitted material in § 535.608. The final rule also revises the Federal Register notice requirements in § 535.602 to reflect the saving clause, namely that the Shipping Act may not be construed as prescribing a deadline for the submission of comments on filed agreements. Under revised § 535.602, Federal Register notices will no longer include a ‘‘final date’’ or rigid deadline for filing comments; rather, notices will include a date by which comments are most useful for the Commission’s analysis of an agreement, e.g., when the agreement is subject to the statutory 45-day review period before going into effect.7 Comments received before that date will be considered by the Commission and staff in making determinations within the 45-day review period, while comments received after that date may be considered, to the extent practicable, within the 45-day review period or as part of the Commission’s continuing 7 The proposed regulatory text in the NPRM expressly referenced the 45-day review period. The final rule does not include this reference, reflecting that certain types of filed agreements are effective on filing and are not subject to the review period. See, e.g., 46 CFR 535.302, 535.311. VerDate Sep<11>2014 16:08 Feb 19, 2020 Jkt 250001 review of the agreement after it goes into effect. V. Rulemaking Analyses and Notices Effective Date The Administrative Procedure Act generally requires a minimum of 30 days before a final rule can go into effect, but excepts from this requirement: (1) Substantive rules which grant or recognize an exemption or relieve a restriction; (2) interpretive rules and statements of policy; and (3) when an agency finds good cause for a shorter period of time and includes those findings with the rule. 5 U.S.C. 553(d). The majority of the changes made by this rule implement statutory changes made by the LoBiondo Act and involve limited, if any, exercise of discretion by the Commission. Notwithstanding the effective date for the regulatory changes in this final rule, regulated entities are currently subject to the amended statutory provisions, including the expanded scope of persons required to obtain an OTI license from the Commission under 46 U.S.C. 40901 and the expanded prohibition against knowingly and willfully accepting or transporting cargo for OTIs that do not meet certain Shipping Act requirements in 46 U.S.C. 41104(a)(11). Likewise, this final rule does not affect the Commission’s existing statutory authority to hold certain types of nonpublic meetings under 46 U.S.C. 303 or the confidentiality protections for thirdparty comments on filed agreements under 46 U.S.C. 40306. A delayed effective date is therefore unnecessary. In addition, a delayed effective date would lengthen the period during which the Commission’s regulations would be inconsistent with the revised statutory provisions, potentially causing confusion among regulated entities and other affected parties. A delayed effective date would therefore also be contrary to the public interest. For the foregoing reasons, the Commission finds good cause for these changes to be effective immediately. Although the elimination of the licensed U.S. agent requirement for registered NVOCCs is likewise in response the statutory changes in the LoBiondo Act, the analysis above reflects that this change is more than a technical change to match the revised statutory text. Nonetheless, as this change relieves a restriction on registered NVOCCs and their U.S. agents, an immediate effective date for the change is warranted under 5 U.S.C. 553(d). PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 9681 Congressional Review Act The rule is not a ‘‘major rule’’ as defined by the Congressional Review Act, codified at 5 U.S.C. 801 et seq. The rule will not result in: (1) An annual effect on the economy of $100,000,000 or more; (2) a major increase in costs or prices; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreignbased companies. 5 U.S.C. 804(2). Regulatory Flexibility Act The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 601– 612) provides that whenever an agency promulgates a final rule after being required to publish a notice of proposed rulemaking under the Administrative Procedure Act (APA) (5 U.S.C. 553), the agency must prepare and make available a final regulatory flexibility analysis (FRFA) describing the impact of the rule on small entities, unless the head of the agency certifies that the rulemaking will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 604–605. Based on the analysis below, the Chairman of the Federal Maritime Commission certifies that this final rule will not have a significant economic impact on a substantial number of small entities. Most of the final rule’s changes will clearly have no economic impact on any regulated entities, i.e., updating references to statutory provisions, the amendments relating to nonpublic collaborative discussions by the Commission, and the amendments relating to comments on filed agreements. With respect to the amendments to the regulations governing OTI licensing, financial responsibility, and general duties, the Commission recognizes that the majority of businesses affected by these proposed changes (OTIs) qualify as small entities under the guidelines of the Small Business Administration. The final rule will not, however, result in a significant economic impact on these entities. The regulatory changes include: (1) Expanding the class of entities that must obtain a license to include those holding themselves out or advertising as OTIs; (2) eliminating the requirement that U.S. agents of foreign-based, registered NVOCCs be licensed; and (3) expanding the prohibition on common carriers transporting cargo for noncompliant OTIs to include OFFs that have not met the financial responsibility requirements. These changes are expected to have minimal, if any, economic impact. As E:\FR\FM\20FER1.SGM 20FER1 9682 Federal Register / Vol. 85, No. 34 / Thursday, February 20, 2020 / Rules and Regulations explained above, the Commission expects that requiring entities that hold themselves out or advertise as OTIs to obtain a license and bond, insurance, or other surety will have minimal, if any, effects on the universe of entities that must meet the licensing and financial responsibility requirements. In general, an entity that advertises or holds itself out as an OTI also acts as an OTI, and the practical effect of the change is to make it easier for the Commission to enforce the licensing and financial responsibility requirements and prosecute noncompliant OTIs. Further, to the extent that eliminating the license requirement for U.S. agents of foreignbased, registered NVOCCs has any effect, it will be to reduce the regulatory burden on those agents as well as registered NVOCCs.8 Finally, the changes to the prohibition on transporting cargo for noncompliant OTIs will have little, if any, economic impact on common carriers, including NVOCCs. NVOCCs will continue to be able to rely on the Commission’s website, which contains an easily searchable database of OTIs, to ascertain both NVOCC and OFF compliance with the relevant requirements. National Environmental Policy Act lotter on DSKBCFDHB2PROD with RULES The Commission’s regulations categorically exclude certain rulemakings from any requirement to prepare an environmental assessment or an environmental impact statement because they do not increase or decrease air, water, or noise pollution or the use of fossil fuels, recyclables, or energy. 46 CFR 504.4. In addition to correcting references to statutory provisions, the proposed rule would make changes to the regulations governing Commission meetings in part 503, the regulations governing OTI licensing, financial responsibility, and general duties in part 515, and the regulations governing the submission of comments on filed agreements in part 535. This rulemaking thus falls within the categorical exclusion for actions regarding access to public information under part 503 (§ 504.4(a)(24)), actions related to the issuance, modification, denial and revocation of ocean transportation intermediary licenses (§ 504.4(a)(1)), and actions related to the consideration of agreements (§ 504.4(a)(9)–(13), (30)– 8 When originally proposing the licensed U.S. agent requirement in 1998, the Commission stated that it expected that most U.S. agents would already be licensed and the impact of the requirement would be de minimis. 1998 NPRM, 63 FR at 70714. The Commission expects that removing the requirement will likewise have minimal, if any, economic impact on registered NVOCCs or their U.S. agents. VerDate Sep<11>2014 16:08 Feb 19, 2020 Jkt 250001 (35)). Therefore, no environmental assessment or environmental impact statement is required. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3521) (PRA) requires an agency to seek and receive approval from the Office of Management and Budget (OMB) before collecting information from the public. 44 U.S.C. 3507. The agency must submit collections of information in rules to OMB in conjunction with the publication of the notice of proposed rulemaking. 5 CFR 1320.11. This rule does not contain any collections of information as defined by 44 U.S.C. 3502(3) and 5 CFR 1320.3(c). Executive Order 12988 (Civil Justice Reform) This rule meets the applicable standards in E.O. 12988 titled, ‘‘Civil Justice Reform,’’ to minimize litigation, eliminate ambiguity, and reduce burden. Regulation Identifier Number The Commission assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda, available at http:// www.reginfo.gov/public/do/ eAgendaMain. 46 CFR Part 503 Freedom of Information, Privacy, Sunshine Act. 46 CFR Part 515 Freight, Freight forwarders, Maritime carriers, Reporting and recordkeeping requirements. 46 CFR Part 530 Freight, Maritime carriers, Reporting and recordkeeping requirements. 46 CFR Part 532 Common carriers, Exports, Maritime carriers, Reporting and recordkeeping requirements. 46 CFR Part 535 Administrative practice and procedure, Freight, Maritime carriers, Reporting and recordkeeping requirements. Frm 00022 Fmt 4700 Antitrust, Maritime carriers. For the reasons set forth above, the Federal Maritime Commission is amending 46 CFR parts 503, 515, 530, 532, 535, and 545 as follows: PART 503—PUBLIC INFORMATION 1. The authority citation for part 503 is revised to read as follows: ■ Authority: 5 U.S.C. 331, 552, 552a, 552b, 553; 31 U.S.C. 9701; 46 U.S.C. 303; E.O. 13526 of January 5, 2010 75 FR 707, 3 CFR, 2010 Comp., p. 298, sections 5.1(a) and (b). 2. Amend § 503.72 by revising paragraph (a) to read as follows: ■ § 503.72 General rule—meetings. (a) Except as otherwise provided in §§ 503.73, 503.74, 503.75, 503.76, and 503.84, every portion of every meeting and every portion of a series of meetings of the agency shall be open to public observation. * * * * * ■ 3. Amend § 503.78 by revising paragraph (a) to read as follows: § 503.78 General rule—information pertaining to meeting. (a) As defined in § 503.71, all information pertaining to a portion or portions of a meeting or portion or portions of a series of meetings of the agency shall be disclosed to the public unless excepted from such disclosure under §§ 503.79 through 503.81 or § 503.84. * * * * * ■ 4. Add § 503.84 to subpart I to read as follows: § 503.84 Nonpublic Collaborative Discussions. List of Subjects PO 00000 46 CFR Part 545 Sfmt 4700 (a) General. Notwithstanding § 503.72, a majority of the Commissioners may hold a meeting that is not open to public observation to discuss official agency business if: (1) No formal or informal vote or other official agency action is taken at the meeting; (2) Each individual present at the meeting is a Commissioner or an employee of the Commission; (3) At least one (1) Commissioner from each political party is present at the meeting, if there are sitting Commissioners from more than one party; and (4) The General Counsel of the Commission is present at the meeting. (b) Disclosure of nonpublic collaborative discussions. Except as provided under paragraph (c) of this section, not later than two (2) business days after the conclusion of a meeting E:\FR\FM\20FER1.SGM 20FER1 Federal Register / Vol. 85, No. 34 / Thursday, February 20, 2020 / Rules and Regulations under paragraph (a) of this section, the Commission shall make available to the public, in a place easily accessible to the public: (1) A list of the individuals present at the meeting; and (2) A summary of the matters discussed at the meeting, except for any matters the Commission properly determines may be withheld from the public under § 503.73. (c) Exception. If the Commission properly determines matters may be withheld from the public under § 503.73, the Commission shall provide a summary with as much general information as possible on those matters withheld from the public. (d) Ongoing proceedings. If a meeting under paragraph (a) of this section directly relates to an ongoing proceeding before the Commission, the Commission shall make the disclosure under paragraph (b) of this section on the date of the final Commission decision. ■ 5. Amend § 503.85 by revising paragraph (a) introductory text to read as follows: § 503.85 Agency recordkeeping requirements. PART 515—LICENSING, FINANCIAL RESPONSIBILITY REQUIREMENTS, AND GENERAL DUTIES FOR OCEAN TRANSPORTATION INTERMEDIARIES 6. The authority citation for part 515 continues to read as follows: ■ Authority: 5 U.S.C. 553; 31 U.S.C. 9701; 46 U.S.C. 305, 40102, 40104, 40501–40503, 40901–40904, 41101–41109, 41301–41302, 41305–41307; Pub. L. 105–383, 112 Stat. 3411; 21 U.S.C. 862. 7. Revise § 515.3 to read as follows: lotter on DSKBCFDHB2PROD with RULES § 515.3 License; when required. (a) Except as otherwise provided in this part, no person in the United States may advertise, hold oneself out, or act as an ocean transportation intermediary unless that person holds a valid license issued by the Commission. (b) For purposes of this part, a person is considered to be ‘‘in the United States’’ if such person is resident in, or incorporated or established under, the laws of the United States. VerDate Sep<11>2014 16:08 Feb 19, 2020 Jkt 250001 § 515.4 License; when not required. * * * * * (b) Agents, employees, or branch offices of an ocean transportation intermediary. (1) A disclosed agent, individual employee, or branch office of an ocean transportation intermediary is not required to be licensed in order to act on behalf of and in the name of such ocean transportation intermediary. (2) An ocean transportation intermediary must report branch offices to the Commission in Form FMC–18 or under the procedures in § 515.20(e). (3) An ocean transportation intermediary is fully responsible for the acts and omissions of any of its employees and agents that are performed in connection with the conduct of the ocean transportation intermediary’s business. * * * * * ■ 9. Amend § 515.19 by revising paragraph (g)(1)(vii) to read as follows: § 515.19 Registration of foreign-based unlicensed NVOCC. * (a) In the case of any portion or portions of a meeting or portion or portions of a series of meetings determined by the agency to be closed to public observation under the provisions of §§ 502.73 through 503.75, the following records shall be maintained by the Secretary of the agency: * * * * * ■ 8. Amend § 515.4 by revising paragraph (b) to read as follows: ■ * * * * (g) * * * (1) * * * (vii) Knowingly and willfully accepting cargo from or transporting cargo for the account of: (A) an NVOCC that does not have a published tariff as required by 46 U.S.C. 40501 and part 520 of this chapter, and a bond, insurance, or other surety as required by 46 U.S.C. 40902 and this part; or (B) an OFF that does not have a bond, insurance, or other surety as required by 46 U.S.C. 40902 and this part; and * * * * * ■ 10. Amend § 515.21 by revising paragraph (a) introductory text, and paragraphs (a)(1), and (a)(2) to read as follows: § 515.21 Financial Responsibility Requirements. (a) Form and amount. Except as otherwise provided in this part, no person may advertise, hold oneself out, or act as an ocean transportation intermediary unless that person furnishes a bond, proof of insurance, or other surety in a form and amount determined by the Commission to insure financial responsibility. The bond, insurance, or other surety covers the transportation-related activities of an ocean transportation intermediary. (1) Any person in the United States advertising, holding oneself out, or acting as an ocean freight forwarder as PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 9683 defined in § 515.2(m)(1) shall furnish evidence of financial responsibility in the amount of $50,000. (2) Any person in the United States advertising, holding oneself out, or acting as an NVOCC as defined in § 515.2(m)(2) shall furnish evidence of financial responsibility in the amount of $75,000. * * * * * ■ 11. Amend § 515.27 by revising paragraph (a), paragraph (b) introductory text, and paragraphs (b)(1), and (c) to read as follows: § 515.27 Proof of compliance—NVOCC. (a) No common carrier may knowingly and willfully accept cargo from or transport cargo for the account of: (1) An NVOCC that does not have a published tariff as required by 46 U.S.C. 40501 and part 520 of this chapter, and a bond, insurance, or other surety as required by 46 U.S.C. 40902 and this part; or (2) An OFF that does not have a bond, insurance, or other surety as required by 46 U.S.C. 40902 and this part. (b) A common carrier can obtain proof of an NVOCC or OFF’s compliance with the OTI licensing, registration, tariff and financial responsibility requirements by: (1) Consulting the Commission’s website www.fmc.gov as provided in paragraph (d) of this section, to verify that the NVOCC or OFF has complied with the applicable licensing, registration, tariff, and financial responsibility requirements; or * * * * * (c) A common carrier that has employed the procedure prescribed in paragraph (b)(1) of this section shall be deemed to have met its obligations under 46 U.S.C. 41104(a)(11), unless the common carrier knew that such NVOCC or OFF was not in compliance with the applicable tariff or financial responsibility requirements. * * * * * PART 530—SERVICE CONTRACTS 12. The authority citation for part 530 continues to read as follows: ■ Authority: 5 U.S.C. 553; 46 U.S.C. 305, 40301–40306, 40501–40503, 41307. 13. Amend § 530.6 by revising paragraph (d) to read as follows: ■ § 530.6 Certification of shipper status. * * * * * (d) Reliance on NVOCC proof; independent knowledge. An ocean common carrier, agreement or conference executing a service contract shall be deemed to have complied with E:\FR\FM\20FER1.SGM 20FER1 9684 Federal Register / Vol. 85, No. 34 / Thursday, February 20, 2020 / Rules and Regulations 46 U.S.C. 41104(a)(12) upon meeting the requirements of paragraphs (a) and (b) of this section, unless the carrier party had reason to know such certification or documentation of NVOCC tariff and bonding was false. PART 532—NVOCC NEGOTIATED RATE ARRANGEMENTS 14. The authority citation for part 532 continues to read as follows: ■ 15. Amend § 532.2 by revising paragraph (e) to read as follows: Scope and applicability. * * * * * (e) The prohibition in 46 U.S.C. 41104(a)(2)(A); * * * * * ■ 16. Amend § 532.7 by revising paragraph (c) to read as follows: § 532.7 Recordkeeping and audit. * * * * * (c) Failure to keep or timely produce original NRAs will disqualify an NVOCC from the operation of the exemption provided pursuant to this part, regardless of whether it has been invoked by notice as set forth above, and may result in a Commission finding of a violation of 46 U.S.C. 41104(a)(1), 41104(a)(2)(A) or other acts prohibited by the Shipping Act. PART 535—OCEAN COMMON CARRIER AND MARINE TERMINAL OPERATOR AGREEMENTS SUBJECT TO THE SHIPPING ACT OF 1984 17. The authority citation for part 535 continues to read as follows: ■ Authority: 5 U.S.C. 553; 46 U.S.C. 305, 40101–40104, 40301–40307, 40501–40503, 40901–40904, 41101–41109, 41301–41302, and 41305–41307. 18. Amend § 535.602 by revising paragraph (b)(6) to read as follows: ■ § 535.602 Federal Register notice. * * * * (b) * * * (6) A request for comments, including relevant information and documents, regarding the agreement and the date by which comments should be submitted in order to be most useful to the Commission’s review of the agreement. ■ 19. Amend § 535.603 by revising paragraph (a) to read as follows: lotter on DSKBCFDHB2PROD with RULES * § 535.603 Comment. (a) Persons may file with the Secretary written comments, including relevant information and documents, regarding a filed agreement. Commenters may submit the comment by email to VerDate Sep<11>2014 16:08 Feb 19, 2020 Jkt 250001 20. Amend § 535.608 by revising paragraph (a) to read as follows: ■ § 535.608 material. Authority: 46 U.S.C. 40103. ■ § 532.2 secretary@fmc.gov or deliver to Secretary, Federal Maritime Commission, 800 N Capitol St. NW, Washington, DC 20573–0001. The Commission will treat such comments as confidential in accordance with § 535.608. * * * * * Confidentiality of submitted (a) Except for an agreement filed under 46 U.S.C. ch. 403, all information and documents submitted to the Commission by the filing party(ies) or third parties regarding an agreement will be exempt from disclosure under 5 U.S.C. 552. Included in this disclosure exemption is information provided in the Information Form, voluntary submission of additional information, reasons for noncompliance, replies to requests for additional information, and third-party comments. * * * * * PART 545—INTERPRETATIONS AND STATEMENTS OF POLICY 21. The authority citation for part 545 continues to read as follows: ■ Authority: 5 U.S.C. 553; 46 U.S.C. 305, 40307, 40501–40503, 41101–41106, and 40901–40904; 46 CFR 515.23. 22. Amend § 545.1 by revising paragraph (a) to read as follows: ■ § 545.1 Interpretation of Shipping Act of 1984—Refusal to negotiate with shippers’ associations. (a) 46 U.S.C. 40502 authorizes ocean common carriers and agreements between or among ocean common carriers to enter into a service contract with a shippers’ association, subject to the requirements of the Shipping Act of 1984 (‘‘Act’’). 46 U.S.C. 41104(a)(10) prohibits carriers from unreasonably refusing to deal or negotiate. 46 U.S.C. 40307(a)(3) exempts from the antitrust laws any activity within the scope of the Act, undertaken with a reasonable basis to conclude that it is pursuant to a filed and effective agreement. * * * * * By the Commission. Rachel Dickon, Secretary. [FR Doc. 2020–02493 Filed 2–19–20; 8:45 am] BILLING CODE 6731–AA–P PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 622 [Docket No. 200204–0046] RIN 0648–BJ28 Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Reef Fish Fishery of the Gulf of Mexico; Red Snapper Management Measures National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. AGENCY: NMFS issues regulations to implement management measures described in a framework action to the Fishery Management Plan (FMP) for the Reef Fish Resources of the Gulf of Mexico (Gulf), as prepared by the Gulf of Mexico Fishery Management Council (Council). This final rule modifies the red snapper Federal charter vessel/ headboat (for-hire) component’s annual catch target (ACT) for the 2020 and subsequent fishing years. The purpose of this final rule and the framework action is to allow for greater harvest of red snapper by the Federal for-hire component while continuing to constrain landings to the Federal forhire component and total recreational annual catch limits (ACL). DATES: This final rule is effective March 23, 2020. ADDRESSES: Electronic copies of the framework action, which includes an environmental assessment (EA), a regulatory impact review, and a Regulatory Flexibility Act (RFA) analysis may be obtained from the Southeast Regional Office website at https://www.fisheries.noaa.gov/action/ framework-action-fishery-managementplan-reef-fish-resources-gulf-mexicomodification. SUMMARY: FOR FURTHER INFORMATION CONTACT: Peter Hood, NMFS Southeast Regional Office, telephone: 727–824–5305, email: peter.hood@noaa.gov. SUPPLEMENTARY INFORMATION: NMFS and the Council manage the Gulf reef fish fishery under the FMP. The FMP, which includes red snapper, was prepared by the Council and is implemented by NMFS through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act)(16 U.S.C. 1801 et seq.). E:\FR\FM\20FER1.SGM 20FER1

Agencies

[Federal Register Volume 85, Number 34 (Thursday, February 20, 2020)]
[Rules and Regulations]
[Pages 9676-9684]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02493]


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FEDERAL MARITIME COMMISSION

46 CFR Parts 503, 515, and 535

[Docket No. 19-06]
RIN 3072-AC77


Regulatory Amendments Implementing the Frank LoBiondo Coast Guard 
Authorization Act of 2018

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

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SUMMARY: The Federal Maritime Commission (Commission) is revising its 
regulations to implement the provisions of the Frank LoBiondo Coast 
Guard Authorization Act of 2018. The proposed revisions include 
amendments to the regulations governing: Commission meetings; ocean 
transportation intermediary licensing, financial responsibility, and 
general duties, and the submission of public comments on ocean common 
carrier and marine terminal operator agreements. The revisions also 
include miscellaneous updates to the references to statutory provisions 
reorganized by the LoBiondo Act.

DATES: This rule is effective February 20, 2020.

FOR FURTHER INFORMATION CONTACT: Rachel E. Dickon, Secretary; Phone: 
(202) 523-5725; Email: [email protected].

[[Page 9677]]


SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
II. Summary of NPRM
III. Comment Summary
IV. Revisions to Commission Regulations
    A. References to Statutory Provisions (Parts 515, 530, 532, 545)
    B. Commission Meetings (Part 503)
    C. OTI Licensing, Financial Responsibility, and General Duties 
(Part 515)
    1. Licensing and Financial Responsibility
    2. Common Carrier Prohibitions
    D. Comments on Filed Agreements (Part 535)
V. Rulemaking Analyses and Notices

I. Introduction

    On December 4, 2018, the ``Frank LoBiondo Coast Guard Authorization 
Act of 2018'' was enacted as Public Law 115-282 (LoBiondo Act or Act). 
The LoBiondo Act made a number of changes affecting the Federal 
Maritime Commission (Commission) and the Shipping Act of 1984 (Shipping 
Act). These included the changes made in Title VII of the Act, referred 
to as the ``Federal Maritime Commission Authorization Act of 2017,'' as 
well as a miscellaneous provision in Sec.  834 of the LoBiondo Act. By 
Notice of Proposed Rulemaking (NPRM) published in the Federal Register 
on October 9, 2019, the Commission proposed to revise its regulations 
to reflect the statutory changes. The Commission also invited comment 
on whether the statutory changes to the ocean transportation 
intermediary (OTI) \1\ licensing requirements conflicted with the 
Commission's regulatory requirement that only licensed OTIs may perform 
OTI services in the United States for registered non-vessel-operating 
common carriers (NVOCCs) and whether this requirement should therefore 
be removed.
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    \1\ OTIs include non-vessel-operating common carriers (NVOCCs) 
and ocean freight forwarders (OFFs). 46 U.S.C. 40102(20).
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    The NPRM included a 30-day comment period, and the Commission 
received one comment. After consideration of the comment and for the 
reasons stated below, the Commission is adopting all of the proposed 
amendments without substantive change. In addition, the Commission has 
determined that the licensed U.S. agent requirement for registered 
NVOCCs conflicts with the statutory licensing and financial 
responsibility provisions as amended by the LoBiondo Act, and is 
removing that requirement.

II. Summary of NPRM

    In the NPRM, the Commission focused on the statutory changes that 
warranted corresponding revisions to the Commission's regulations. The 
proposed changes included:
     Revising several Commission regulations to update 
references to statutory provisions;
     Revising the regulations governing Commission meetings to 
include provisions on ``nonpublic collaborative discussions,'' a new 
type of meeting established by the LoBiondo Act that is not open to 
public observation;
     Revising the regulations governing OTI licensing and 
financial responsibility to reflect statutory changes to the types of 
persons that are required to be licensed and maintain a bond, 
insurance, or other surety;
     Revising the regulations governing the general duties of 
NVOCCs to reflect amendments to several prohibited acts; and
     Revising the regulations related to comments on filed 
ocean common carrier and marine terminal operator (MTO) agreements to 
reflect that such comments are now confidential and may not be 
disclosed by the Commission;
    The Commission sought comment on these proposed revisions and on 
whether the Commission should remove the licensed U.S. agent 
requirement for registered NVOCCs.
    Although beyond the scope of this current rulemaking, the 
Commission also invited comments on any regulatory changes necessary to 
implement other LoBiondo Act provisions not discussed in the NPRM.

III. Comment Summary

    The Commission received a single comment from Hecny Brokerage 
Services, Inc., on its behalf and that of its affiliates (Hecny). Hecny 
is a licensed NVOCC. The comment is a letter addressed to the National 
Customs Brokers and Forwarders Association of America (NCBFAA), a trade 
association representing OTIs, air cargo agents, and customs brokers. 
About NCBFAA, https://www.ncbfaa.org/scripts/4disapi.dll/4DCGI/cms/review.html?Action=CMS_Document&DocID=503&MenuKey=about (last visited 
Dec. 23, 2019). The letter requests that the NCBFAA file comments on 
the October 9, 2019 NPRM opposing the elimination of the licensed U.S. 
agent requirement for registered NVOCCs. Hecny's reasons for opposing 
this change are discussed in more detail in Section IV.C below. The 
Commission received no comments from NCBFAA.

IV. Revisions to Commission Regulations

A. References to Statutory Provisions (Parts 515, 530, 532, 545)

    The LoBiondo Act amended 46 U.S.C. 41104 to revise several 
prohibited acts and added a new prohibited act. Public Law 115-282, 
708. As part of those amendments, the Act changed the subsection 
designations in Sec.  41104. The Commission is therefore revising its 
regulations to reflect the new subsection designations.

B. Commission Meetings (Part 503)

    The LoBiondo Act amended 46 U.S.C. 303 to exclude certain 
Commission meetings from the requirements of the Government in the 
Sunshine Act (5 U.S.C. 552b). Public Law 115-282, 711(a). Under the 
revised statute, a majority of Commissioners may hold a meeting closed 
to the public to discuss Commission business if: (1) No vote or 
official Commission action is taken at the meeting; (2) only 
Commissioners and employees are present; (3) at least one Commissioner 
from each political party is present (assuming there are sitting 
Commissioners from more than one party); and (4) the Commission's 
General Counsel is present. 46 U.S.C. 303(c).\2\ The statute refers to 
these closed meetings as ``nonpublic collaborative discussions.''
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    \2\ This exclusion was modeled on a similar provision in the 
Surface Transportation Board Reauthorization Act of 2015. See S. 
Rep. No. 115-89 at 19 (2017) (accompanying S. 1129, an earlier 
authorization bill that contained many of the provisions later 
incorporated into the LoBiondo Act); 49 U.S.C. 1303(a)(2).
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    Although the Commission need not publicize such meetings beforehand 
or record a complete transcript or minutes, the Commission must, 
following the meeting, make publicly available a list of individuals 
present at the meeting and a summary of matters discussed, except for 
those matters the Commission determines may be withheld from the public 
under one of the applicable exemptions listed in the Sunshine Act. 
Sec.  303(c)(2)-(3). For those matters withheld from the public, the 
Commission must provide a summary with as much general information as 
possible. Sec.  303(c)(3). The required disclosures must be made within 
two business days after the meeting, unless the meeting relates to an 
ongoing proceeding before the Commission, in which case the disclosures 
must be made on the date of the final Commission decision. Sec.  
303(c)(2), (4); see S. Rep. No. 115-89 at 19.
    Finally, the Act includes provisions clarifying that: (1) The 
Sunshine Act

[[Page 9678]]

continues to apply to all meetings other than nonpublic collaborative 
discussions as described in Sec.  303(c), as well as to any information 
related to those discussions that the Commission proposes to withhold 
from the public; and (2) the provisions governing nonpublic 
collaborative discussions do not authorize the Commission to withhold 
records accessible to an individual under the Privacy Act of 1974 (5 
U.S.C. 552a). Sec.  303(b)(5)-(6).
    The final rule includes a new section, Sec.  503.84, in part 503 of 
the Commission's regulations mirroring the new provisions in 46 U.S.C. 
303(c)(1)-(4) and makes necessary conforming revisions to other 
sections in that part.

C. OTI Licensing, Financial Responsibility, and General Duties (Part 
515)

1. Licensing and Financial Responsibility
    The LoBiondo Act amendments expanded the class of persons that must 
be licensed as OTIs and meet the OTI financial responsibility 
requirements to include persons that advertise or hold themselves out 
as OTIs. 46 U.S.C. 40901(a); 40902(a); Public Law 115-282, 707(a), (c). 
Previously, only persons that acted as OTIs were subject to the 
licensing and financial responsibility requirements.
    The Commission is amending the general licensing and financial 
responsibility requirements in Sec. Sec.  515.3 and 515.21 to reflect 
this change.\3\ The Commission expects this change to have minimal, if 
any, effects on the universe of entities that must meet the licensing 
and financial responsibility requirements. In general, an entity that 
advertises or holds itself out as an OTI also acts as an OTI, and the 
practical effect of the change is to make it easier for the Commission 
to enforce the licensing and financial responsibility requirements and 
prosecute noncompliant OTIs. Instead of having to show that a 
noncompliant entity actually acted as an OTI, the mere fact that an 
unlicensed entity advertised or held itself out as an OTI is now 
sufficient to show a violation of the statute.
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    \3\ The proposed regulatory text in the NPRM inadvertently 
retained a reference to ``acting as an ocean transportation 
intermediary'' in Sec.  515.21(a). The final rule does not include 
this phrase in light of the changes made by the LoBiondo Act.
---------------------------------------------------------------------------

    As described in the NPRM, the LoBiondo Act also includes a new 
provision clarifying that the OTI licensing and financial 
responsibility requirements do not apply to a person ``that performs 
[OTI] services on behalf of an [OTI] for which it is a disclosed 
agent.'' 46 U.S.C. 40901(c); Public Law 115-282, 707(b). The Commission 
tentatively determined in the NPRM that this statutory change might 
conflict with the Commission's regulations at 46 CFR 515.3 requiring 
that only licensed OTIs may act as U.S. agents to provide OTI services 
for registered NVOCCs (which are not licensed). As noted above, the 
Commission received only one comment on this rulemaking from Hecny, 
which opposed removing this requirement. For the reasons discussed 
below, the Commission has determined that this requirement, along with 
the complementary requirement in Sec.  515.3 that registered NVOCCs 
must use licensed OTIs to provide NVOCC services in the United States, 
conflict with the new statutory provision at Sec.  40901(c). The 
Commission is therefore revising Sec.  515.3 to remove these 
requirements and making corresponding changes to Sec.  515.4, which 
describes the circumstances when a license is not required.
    The requirement that only licensed OTIs can provide OTI services on 
behalf of foreign-based, unlicensed NVOCC principals was originally 
promulgated after the enactment of the Ocean Shipping Reform Act of 
1998 (OSRA), which for the first time required NVOCCs ``in the United 
States'' to be licensed. See Final Rule: Licensing, Financial 
Responsibility Requirements, and General Duties for Ocean 
Transportation Intermediaries, 64 FR 11156, 11156 (Mar. 8, 1999) (1999 
Final Rule); Public Law 105-258, 116; S. Rep. 105-61, at 30-31 (1997). 
The legislative history of OSRA made clear that it was Congress's 
intent for the Commission ``to determine when foreign-based entities 
conducting business in the United States are to be considered persons 
in the United States for the purposes of'' the licensing requirements. 
See S. Rep. No. 105-61, at 31 (1997); 1999 Final Rule, 64 FR at 11156. 
In the rulemaking implementing this part of OSRA, the Commission 
considered several options for defining the class of persons required 
to have a license.
    At one end of the spectrum, the Commission considered expansive 
requirements that would have required licenses for NVOCCs incorporated 
in the United States or with a physical presence in the United States 
through another person, e.g., an agent, affiliate, or subsidiary (this 
option was rejected prior to the publication of the proposed rule). 
NPRM: Licensing, Financial Responsibility Requirements, and General 
Duties for Ocean Transportation Intermediaries, 63 FR 70710, 70710 
(Dec. 22, 1998) (1998 NPRM). At the other end, the Commission 
considered a narrow definition that would have only required licenses 
for NVOCCs incorporated in, resident in, maintaining a physical 
presence in, or established under the laws of the United States. Id. at 
70710-70711. In the final rule, the Commission determined to adopt the 
current requirements, which fell between the two other approaches in 
terms of scope, concluding that this middle-of-the-road approach was 
``the most fair and equitable,'' ``would increase competition 
consistent with the intent of OSRA,'' and represented ``a good step 
towards leveling the playing field between OTIs in the United States 
who are within the Commission's jurisdictional reach and those who are 
outside of that reach.'' 1999 Final Rule, 64 FR at 11157. The final 
rule provided that a person is considered to be ``in the United 
States'' if such person is resident in, or incorporated or established 
under, the laws of the United States, but required that only licensed 
OTIs act as agents providing OTI services in the United States for 
foreign-based, unlicensed NVOCCs. See id.; 46 CFR 515.3 (2000).
    In 2006, an OTI petitioned the Commission for a declaratory order 
regarding the lawfulness of a licensed OTI using unlicensed agents to 
provide OTI services to the public. After receiving comments, the 
Commission rejected the petition, determining that the use of 
unlicensed agents was unlawful because an agent that provides OTI 
services ``act[s] as an ocean transportation intermediary'' and is 
thereby subject to the licensing requirement in section 19 of the 
Shipping Act (currently codified at 46 U.S.C. 40901(a)). In the Matter 
of the Lawfulness of Unlicensed Persons Acting as Agents for Licensed 
Ocean Transportation Intermediaries--Pet'n for Declaratory Order, 31 
S.R.R. 185, 2008 FMC LEXIS 9 (FMC 2008). Landstar, a licensed NVOCC, 
petitioned the U.S. Court of Appeals for the D.C. Circuit to review the 
Commission's order. The court vacated the Commission's order, holding 
that ``[a]gents providing NVOCC services for licensed NVOCC principals 
are not NVOCCs (or OFFs) solely by virtue of being agents of NVOCCs,'' 
``[t]hey therefore fall outside the coverage of the statute's licensing 
requirement,'' and ``[t]he Commission lacks authority to compel those 
agents to obtain licenses.'' 569 F.3d at 500.
    On remand, the Commission granted the original petition, ``but only 
to the extent consistent with the [c]ourt's decision in Landstar that 
it is lawful for a licensed OTI to engage an unlicensed

[[Page 9679]]

person to act as its agent to perform OTI services on behalf of the 
disclosed licensed OTI.'' In the Matter of the Lawfulness of Unlicensed 
Persons Acting as Agents for Licensed Ocean Transportation 
Intermediaries--Pet'n for Declaratory Order, 31 S.R.R. 1058, 2009 FMC 
LEXIS 25 (FMC 2009).
    In 2014, the Commission proposed to amend Sec.  515.3 to delete a 
requirement that separately incorporated branch offices be licensed 
when they serve as an agent for a licensed OTI. NPRM: Ocean 
Transportation Intermediary Licensing and Financial Responsibility 
Requirements, and General Duties, 79 FR 61544, 61545 (Oct. 10, 2014). 
The Commission proposed to retain the requirement that only licensed 
OTIs may perform OTI services in the United States for foreign-based, 
unlicensed NVOCCS, but to replace the term ``unlicensed ocean 
transportation intermediary'' with the term ``registered NVOCC'' to 
reflect the Commission requirement that foreign-based, unlicensed 
NVOCCs register with the Commission. See id.; Final Rule: Non-Vessel-
Operating Common Carrier Negotiated Rate Arrangements; Tariff 
Publication Exemption, 78 FR 42866 (July 18, 2013). Some commenters 
argued that the requirement regulated agents in contravention of 
Landstar. See Final Rule: Ocean Transportation Intermediary Licensing 
and Financial Responsibility Requirements, and General Duties, 80 FR 
68722, 68723 (Nov. 5, 2015). In response, the Commission recited the 
rationale for the requirement in the 1999 final rule and explained that 
the requirement was necessary in order to ensure that the distinction 
created by Congress between NVOCCs ``in the United States'' that 
require a license and foreign-based NVOCCs that do not require a 
license would not be thwarted. Id. The Commission further noted that 
the requirement had long been in effect and stated that it was 
consistent with Landstar in that it regulated the conduct of OTI 
principals, not agents. Id.
    In its comment, Hecny argues that the focus of the LoBiondo Act was 
on carrier alliances and the need to provide additional powers to the 
Commission to protect terminal service and equipment providers. The 
company asserts that the changes to the OTI statutory provisions were 
intended to be ``cosmetic'' changes to reflect the Landstar decision, 
and there is no history indicating an intent to change the requirement 
relating to U.S. agents for registered NVOCCs. Hecny further states 
that it is unaware of any problems with the licensed U.S. agent 
requirement and that there are ample reasons supporting it. According 
to Hecny, the requirement: (1) Enhances the Commission's ability to 
timely receive responses to its requests because licensed entities are 
aware of the types of records responsive to such requests and know that 
they could lose their own license if they fail to act responsibly; and 
(2) gives customers confidence that they are being treated properly 
because a licensed entity is responsible for handling their goods and 
is held to the standards set forth in the Commission's regulations. 
Hecny concludes by asserting that there is no reason for changing the 
current requirement and believes that serious problems could arise if 
U.S. agents are not licensed OTIs.
    After considering the history of the licensed U.S. agent 
requirement, the language of the relevant LoBiondo Act provision, and 
the comment submitted, the Commission has determined that the 
requirement is inconsistent with the new provision at Sec.  40901(c) 
and must be removed. Section 40901(c) plainly states that disclosed 
agents performing OTI services on behalf of OTIs are not required to be 
licensed. The provision does not distinguish between agents performing 
OTI services on behalf of licensed OTIs versus unlicensed or registered 
OTIs; all disclosed agents are exempt from the licensing requirement 
regardless of whether the OTI principal is licensed.
    The relevant provisions of Sec.  515.3 of the Commission's 
regulations include dual complementary requirements: (1) Registered 
NVOCCs must use licensed OTIs to provide NVOCC services in the United 
Stated; and (2) only licensed OTIs may act as agents to provide OTI 
services in the United States for registered NVOCCs. These requirements 
are applicable to the registered NVOCC principal and not the U.S. 
agent, i.e., if a U.S. agent performing OTI services for a registered 
NVOCC is unlicensed, the registered NVOCC, not the agent, is considered 
to have violated the regulation. See 80 FR at 68723. Regardless of 
whether the requirement applies to the registered NVOCC principal or 
the U.S. agent, however, the result is the same: U.S. agents performing 
OTI services on behalf of registered NVOCCs must have a license. This 
result clearly conflicts with Sec.  40901(c) and the decision by 
Congress to exempt such agents from the licensing requirement. Under 
Sec.  40901, as amended, the Commission lacks the authority to compel 
these U.S. agents to obtain licenses.\4\ See Landstar, 569 F.3d at 500 
(holding that because agents providing NVOCC services for licensed 
NVOCCs principals ``fall outside the coverage of the statute's 
licensing requirement, . . . [t]he Commission lacks authority to compel 
those agents to obtain licenses''). In the absence of such authority, 
the relevant requirements in Sec.  515.3 must be removed. See id.
---------------------------------------------------------------------------

    \4\ Although disclosed agents of registered NVOCCs may not face 
the risk of noncompliance with the Commission's regulations and 
potential civil penalties if they do not obtain the license, Sec.  
515.3 compels agents to obtain licenses because it prohibits 
registered NVOCCs from using unlicensed agents.
---------------------------------------------------------------------------

    The Commission respectfully disagrees with Hecny's characterization 
of the LoBiondo Act's changes to the OTI provisions as ``cosmetic'' 
changes to reflect the Landstar decision. In the NPRM, the Commission 
speculated that codifying the Landstar decision may have been 
Congress's intent, but there is no legislative history to support this 
theory. In any event, it is presumed ``that Congress `says in a statute 
what it means and means in a statute what it says there,''' Rotkiske v. 
Klemm, 205 L. Ed. 2d 291, 297 (2019) (quoting Connecticut Nat'l Bank v. 
Germain, 503 U.S. 249, 254 (1992)), and ``neither courts nor federal 
agencies can rewrite a statute's plain text to correspond to its 
supposed purposes.'' Landstar, 569 F.3d at 498 (citing Norfolk S. Ry 
Co. v. Sorrell, 549 U.S. 158, 171 (2007); Barnhart v. Sigmon Coal Co., 
Inc., 534 U.S. 438, 462 (2002)).
    As the Commission indicated in the NPRM, Sec.  40901(c) is broader 
than the holding in Landstar. The court in Landstar held that the 
Commission lacked authority to require that agents of licensed NVOCCs 
obtain licenses. The new Sec.  40901(c) exempts agents performing OTI 
services on behalf of an OTI from the licensing and financial 
responsibility requirements. By its plain language, the exemption in 
Sec.  40901(c) applies to both agents of NVOCCs and agents of OFFs, as 
NVOCCs and OFFs both fall within the statutory definition of ``ocean 
transportation intermediary.'' See 46 U.S.C. 40102(20).\5\ And the 
statutory language does not limit the applicability of the exemption 
based on whether the OTI principal is licensed, referring to persons 
that perform ``ocean

[[Page 9680]]

transportation intermediary services on behalf of an ocean 
transportation intermediary.'' See 46 U.S.C. 40901(c) (emphasis added). 
The Commission has consistently interpreted this type of broad language 
as including both licensed OTIs and foreign-based, unlicensed NVOCCs 
that are registered with the Commission. See, e.g., Petra-Pet, Inc. v. 
Panda Logistics Ltd., 33 S.R.R. 4, 2013 FMC LEXIS 37 (FMC 2013) 
(finding that a registered NVOCC violated 46 U.S.C. 41102(c), which 
provides, ``A[n] . . . ocean transportation intermediary may not fail 
to establish, observe, and enforce just and reasonable regulations and 
practices relating to or connected with receiving, handling, storing, 
or delivering property'' (emphasis added)).\6\ Therefore, contrary to 
Hecny's contentions, Sec.  40901(c) goes beyond the holding in the 
Landstar decision and applies to U.S. agents performing OTI services 
for registered NVOCCs as well as those performing services for licensed 
OTIs.
---------------------------------------------------------------------------

    \5\ Although the Landstar decision focused on NVOCCs, the court 
remarked in dicta and the Commission has historically agreed that 
the same reasoning applies to agents of licensed OFFs. See Landstar, 
569 F.3d at 499 (``But the Commission has no authority to require 
agents of OFFs who are not themselves OFFs to obtain OFF licenses, 
just as it has no authority to require agents of NVOCCs who are not 
themselves NVOCCs to obtain NVOCC licenses.''); In the Matter of the 
Lawfulness of Unlicensed Persons Acting as Agents for Licensed Ocean 
Transportation Intermediaries--Pet'n for Declaratory Order, 31 
S.R.R. 1058, 2009 FMC LEXIS 25.
    \6\ The Commission notes that Petra Pet was decided under an 
earlier interpretation of 46 U.S.C. 41102. See Final Rule: 
Interpretive Rule, Shipping Act of 1984, 83 FR 64478 (Dec. 17, 
2018); 46 CFR 545.4. The Commission's revised interpretation of the 
section, however, affects only the types of actions covered by the 
prohibition, not the types of entities to which it applies.
---------------------------------------------------------------------------

    This Commission's determination that the licensed U.S. agent 
requirement in 46 CFR 515.3 conflicts with 46 U.S.C. 40901(c) reflects 
the changed statutory landscape since the 2015 final rule. At that 
time, the Commission was considering whether the licensed U.S. agent 
requirement for registered NVOCCs conflicted with the Landstar 
decision. Notwithstanding some of the arguably broader dicta in the 
decision, the court in Landstar was focused on whether the agents 
performing OTI services for licensed NVOCCs were ``act[ing] as'' OTIs 
and thus subject to the licensing requirement in Sec.  40901(a). In the 
2015 final rule, the Commission considered not only the ``act as'' 
language in Sec.  40901(a) and the Landstar decision, but also the 
other changes made to the licensing requirement by OSRA, specifically 
the language limiting the requirement to persons ``in the United 
States.'' As the Commission noted, the provision as amended imposed the 
licensing requirement on NVOCCs in the United States but not foreign-
based NVOCCs, and the legislative history indicated clear Congressional 
intent that the Commission determine when foreign-based NVOCCs were to 
be considered to be ``in the United States'' and subject to the 
licensing requirement. 80 FR at 68723. Retaining the licensed U.S. 
agent requirement reflected an appropriate balance that effectuated 
Congress's desire for the Commission to distinguish between NVOCCs that 
must obtain a license and those that need not, while respecting the 
``act as'' language and the Landstar decision by: (1) Limiting the 
requirement to U.S. agents of registered NVOCCs; and (2) applying the 
requirement only to registered NVOCC principals and not to agents.
    The addition of Sec.  40901(c), however, materially changes this 
analysis and warrants reconsideration of the licensed U.S. agent 
requirement. Rather than excluding agents from the licensing 
requirements based on the interpretation that they do not ``act as an'' 
OTI under Sec.  40901(a), Sec.  40901(c) creates an explicit exemption 
for such agents. Moreover, in the 2015 final rule, the Commission was 
dealing with multiple facets of a statutory provision enacted in a 
single piece of legislation. In contrast, the Commission is now faced 
with reconciling two provisions enacted by different Congresses over 20 
years apart. Although the intent of Congress in 1998 was for the 
Commission to determine whether an NVOCC was ``in the United States'' 
and required to be licensed, the recently enacted Sec.  40901(c) has 
the effect of limiting the Commission's discretion by foreclosing the 
agency from requiring agents to obtain a license.
    Based on the foregoing, the Commission is amending Sec.  515.3 to 
remove the licensed U.S. agent requirement and to improve readability. 
The Commission is also making conforming amendments to Sec.  515.4(b), 
which provides that agents of licensed OTIs are not required to have a 
license, by revising that provision to cover disclosed agents of any 
OTI.
    The Commission shares some of Hecny's concerns about the potential 
effects of removing the licensed U.S. agent requirement because U.S. 
shippers may no longer have the protection of dealing with a licensed 
agent when working with a foreign-based NVOCC. The Commission believes, 
however, that any potential negative effects will be mitigated given 
the Commission's increased oversight over foreign-based, unlicensed 
NVOCCs, which have been required to register with the Commission since 
2013. See 46 CFR 515.19. The Commission also notes that no other NVOCCs 
commented on the NPRM and, despite Hecny's request, NCBFAA elected not 
to file a comment on this issue. This suggests that Hecny's concerns 
may not be widely shared by the licensed NVOCC community.
    Nevertheless, going forward, the Commission will closely monitor 
the effect of removing the licensed U.S. agent requirement, and, if 
necessary, take appropriate action in the future to protect U.S. 
shippers. Such action may include reconsidering the financial 
responsibility requirements for foreign-based, registered NVOCCs or 
reconsidering the interpretation of when an NVOCC is ``in the United 
States'' under 46 U.S.C. 40901 and must obtain a license.
2. Common Carrier Prohibitions
    The LoBiondo Act expanded the common carrier prohibition against 
knowingly and willfully accepting or transporting cargo for OTIs that 
do not meet certain Shipping Act requirements. See 46 U.S.C. 
41104(a)(11); Public Law 115-282, 708(a)(2)(A). Previously, common 
carriers were prohibited from knowingly and willfully accepting or 
transporting cargo for an OTI that did not have a tariff and did not 
meet the OTI financial responsibility requirements. See 46 U.S.C. 
41104(11) (2017). This wording, in effect, limited the prohibition to 
dealing with noncompliant NVOCCs, as OFFs are not required to have a 
tariff. See 46 CFR 515.19(g)(1)(vii); 515.27(a). The LoBiondo Act split 
the provision into two separate prohibitions in 46 U.S.C. 41104(a)(11). 
The first prohibits common carriers from knowingly and willfully 
accepting or transporting cargo from an NVOCC that does not have a 
tariff. The second prohibits common carriers from knowingly and 
willfully accepting or transporting cargo from an OTI (i.e., NVOCC or 
OFF) that does not meet the financial responsibility requirements.
    The Commission's regulations at 46 CFR 515.19 and 515.27 reflect 
the earlier version of the prohibition (accepting or transporting cargo 
for noncompliant NVOCCs). The Commission is therefore amending these 
sections to reflect the new, broader statutory prohibition.

D. Comments on Filed Agreements (Part 535)

    The LoBiondo Act made several changes to the provisions governing 
Commission action on agreements. In particular, the LoBiondo Act 
expanded on the existing requirement that the Commission transmit a 
notice of an agreement filing to the Federal Register within seven 
days, adding a requirement that the Commission request interested 
persons to submit relevant information and documents. 46 U.S.C. 
40304(a)(2); Public Law 115-282, 706(a). Although the Commission 
already includes such requests in its Federal Register notices, see 46 
CFR

[[Page 9681]]

535.603, adding this statutory provision renders such comments 
confidential under 46 U.S.C. 40306, which exempts ``[i]nformation and 
documents . . . filed with the . . . Commission under [chapter 403]'' 
from disclosure under the Freedom of Information Act. Previously, only 
information provided by the filing parties was protected from 
disclosure under Sec.  40306. See Final Rule: Rules Governing 
Agreements by Ocean Common Carriers and Other Persons Subject to the 
Shipping Act of 1984, 49 FR 45320, 45336 (Nov. 15, 1984) (interpreting 
the provision (as originally enacted in the Shipping Act of 1984) as 
only protecting information provided by the filing parties).
    In addition, the Act included a saving clause stating that nothing 
in Sec.  706 of the Act or the amendments made to 46 U.S.C. 40304 may 
be construed to prescribe a specific deadline for the submission of 
relevant information and documents from interested persons in response 
to a request for comment on an agreement filing. Public Law 115-282, 
706(c).
    The Commission is revising its regulations in part 535 to address 
these changes. In particular, the final rule revises the procedures for 
submitting comments on filed agreements in Sec.  535.603 to reflect 
that such comments are exempt from disclosure under FOIA and to make 
conforming changes to the list of confidentially submitted material in 
Sec.  535.608. The final rule also revises the Federal Register notice 
requirements in Sec.  535.602 to reflect the saving clause, namely that 
the Shipping Act may not be construed as prescribing a deadline for the 
submission of comments on filed agreements. Under revised Sec.  
535.602, Federal Register notices will no longer include a ``final 
date'' or rigid deadline for filing comments; rather, notices will 
include a date by which comments are most useful for the Commission's 
analysis of an agreement, e.g., when the agreement is subject to the 
statutory 45-day review period before going into effect.\7\ Comments 
received before that date will be considered by the Commission and 
staff in making determinations within the 45-day review period, while 
comments received after that date may be considered, to the extent 
practicable, within the 45-day review period or as part of the 
Commission's continuing review of the agreement after it goes into 
effect.
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    \7\ The proposed regulatory text in the NPRM expressly 
referenced the 45-day review period. The final rule does not include 
this reference, reflecting that certain types of filed agreements 
are effective on filing and are not subject to the review period. 
See, e.g., 46 CFR 535.302, 535.311.
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V. Rulemaking Analyses and Notices

Effective Date

    The Administrative Procedure Act generally requires a minimum of 30 
days before a final rule can go into effect, but excepts from this 
requirement: (1) Substantive rules which grant or recognize an 
exemption or relieve a restriction; (2) interpretive rules and 
statements of policy; and (3) when an agency finds good cause for a 
shorter period of time and includes those findings with the rule. 5 
U.S.C. 553(d).
    The majority of the changes made by this rule implement statutory 
changes made by the LoBiondo Act and involve limited, if any, exercise 
of discretion by the Commission. Notwithstanding the effective date for 
the regulatory changes in this final rule, regulated entities are 
currently subject to the amended statutory provisions, including the 
expanded scope of persons required to obtain an OTI license from the 
Commission under 46 U.S.C. 40901 and the expanded prohibition against 
knowingly and willfully accepting or transporting cargo for OTIs that 
do not meet certain Shipping Act requirements in 46 U.S.C. 
41104(a)(11). Likewise, this final rule does not affect the 
Commission's existing statutory authority to hold certain types of non-
public meetings under 46 U.S.C. 303 or the confidentiality protections 
for third-party comments on filed agreements under 46 U.S.C. 40306. A 
delayed effective date is therefore unnecessary. In addition, a delayed 
effective date would lengthen the period during which the Commission's 
regulations would be inconsistent with the revised statutory 
provisions, potentially causing confusion among regulated entities and 
other affected parties. A delayed effective date would therefore also 
be contrary to the public interest. For the foregoing reasons, the 
Commission finds good cause for these changes to be effective 
immediately.
    Although the elimination of the licensed U.S. agent requirement for 
registered NVOCCs is likewise in response the statutory changes in the 
LoBiondo Act, the analysis above reflects that this change is more than 
a technical change to match the revised statutory text. Nonetheless, as 
this change relieves a restriction on registered NVOCCs and their U.S. 
agents, an immediate effective date for the change is warranted under 5 
U.S.C. 553(d).

Congressional Review Act

    The rule is not a ``major rule'' as defined by the Congressional 
Review Act, codified at 5 U.S.C. 801 et seq. The rule will not result 
in: (1) An annual effect on the economy of $100,000,000 or more; (2) a 
major increase in costs or prices; or (3) significant adverse effects 
on competition, employment, investment, productivity, innovation, or 
the ability of United States-based companies to compete with foreign-
based companies. 5 U.S.C. 804(2).

Regulatory Flexibility Act

    The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 
601-612) provides that whenever an agency promulgates a final rule 
after being required to publish a notice of proposed rulemaking under 
the Administrative Procedure Act (APA) (5 U.S.C. 553), the agency must 
prepare and make available a final regulatory flexibility analysis 
(FRFA) describing the impact of the rule on small entities, unless the 
head of the agency certifies that the rulemaking will not have a 
significant economic impact on a substantial number of small entities. 
5 U.S.C. 604-605. Based on the analysis below, the Chairman of the 
Federal Maritime Commission certifies that this final rule will not 
have a significant economic impact on a substantial number of small 
entities.
    Most of the final rule's changes will clearly have no economic 
impact on any regulated entities, i.e., updating references to 
statutory provisions, the amendments relating to nonpublic 
collaborative discussions by the Commission, and the amendments 
relating to comments on filed agreements.
    With respect to the amendments to the regulations governing OTI 
licensing, financial responsibility, and general duties, the Commission 
recognizes that the majority of businesses affected by these proposed 
changes (OTIs) qualify as small entities under the guidelines of the 
Small Business Administration. The final rule will not, however, result 
in a significant economic impact on these entities. The regulatory 
changes include: (1) Expanding the class of entities that must obtain a 
license to include those holding themselves out or advertising as OTIs; 
(2) eliminating the requirement that U.S. agents of foreign-based, 
registered NVOCCs be licensed; and (3) expanding the prohibition on 
common carriers transporting cargo for noncompliant OTIs to include 
OFFs that have not met the financial responsibility requirements.
    These changes are expected to have minimal, if any, economic 
impact. As

[[Page 9682]]

explained above, the Commission expects that requiring entities that 
hold themselves out or advertise as OTIs to obtain a license and bond, 
insurance, or other surety will have minimal, if any, effects on the 
universe of entities that must meet the licensing and financial 
responsibility requirements. In general, an entity that advertises or 
holds itself out as an OTI also acts as an OTI, and the practical 
effect of the change is to make it easier for the Commission to enforce 
the licensing and financial responsibility requirements and prosecute 
noncompliant OTIs. Further, to the extent that eliminating the license 
requirement for U.S. agents of foreign-based, registered NVOCCs has any 
effect, it will be to reduce the regulatory burden on those agents as 
well as registered NVOCCs.\8\ Finally, the changes to the prohibition 
on transporting cargo for noncompliant OTIs will have little, if any, 
economic impact on common carriers, including NVOCCs. NVOCCs will 
continue to be able to rely on the Commission's website, which contains 
an easily searchable database of OTIs, to ascertain both NVOCC and OFF 
compliance with the relevant requirements.
---------------------------------------------------------------------------

    \8\ When originally proposing the licensed U.S. agent 
requirement in 1998, the Commission stated that it expected that 
most U.S. agents would already be licensed and the impact of the 
requirement would be de minimis. 1998 NPRM, 63 FR at 70714. The 
Commission expects that removing the requirement will likewise have 
minimal, if any, economic impact on registered NVOCCs or their U.S. 
agents.
---------------------------------------------------------------------------

National Environmental Policy Act

    The Commission's regulations categorically exclude certain 
rulemakings from any requirement to prepare an environmental assessment 
or an environmental impact statement because they do not increase or 
decrease air, water, or noise pollution or the use of fossil fuels, 
recyclables, or energy. 46 CFR 504.4. In addition to correcting 
references to statutory provisions, the proposed rule would make 
changes to the regulations governing Commission meetings in part 503, 
the regulations governing OTI licensing, financial responsibility, and 
general duties in part 515, and the regulations governing the 
submission of comments on filed agreements in part 535. This rulemaking 
thus falls within the categorical exclusion for actions regarding 
access to public information under part 503 (Sec.  504.4(a)(24)), 
actions related to the issuance, modification, denial and revocation of 
ocean transportation intermediary licenses (Sec.  504.4(a)(1)), and 
actions related to the consideration of agreements (Sec.  
[thinsp]504.4(a)(9)-(13), (30)-(35)). Therefore, no environmental 
assessment or environmental impact statement is required.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) 
requires an agency to seek and receive approval from the Office of 
Management and Budget (OMB) before collecting information from the 
public. 44 U.S.C. 3507. The agency must submit collections of 
information in rules to OMB in conjunction with the publication of the 
notice of proposed rulemaking. 5 CFR 1320.11. This rule does not 
contain any collections of information as defined by 44 U.S.C. 3502(3) 
and 5 CFR 1320.3(c).

Executive Order 12988 (Civil Justice Reform)

    This rule meets the applicable standards in E.O. 12988 titled, 
``Civil Justice Reform,'' to minimize litigation, eliminate ambiguity, 
and reduce burden.

Regulation Identifier Number

    The Commission assigns a regulation identifier number (RIN) to each 
regulatory action listed in the Unified Agenda of Federal Regulatory 
and Deregulatory Actions (Unified Agenda). The Regulatory Information 
Service Center publishes the Unified Agenda in April and October of 
each year. You may use the RIN contained in the heading at the 
beginning of this document to find this action in the Unified Agenda, 
available at http://www.reginfo.gov/public/do/eAgendaMain.

List of Subjects

46 CFR Part 503

    Freedom of Information, Privacy, Sunshine Act.

46 CFR Part 515

    Freight, Freight forwarders, Maritime carriers, Reporting and 
recordkeeping requirements.

46 CFR Part 530

    Freight, Maritime carriers, Reporting and recordkeeping 
requirements.

46 CFR Part 532

    Common carriers, Exports, Maritime carriers, Reporting and 
recordkeeping requirements.

46 CFR Part 535

    Administrative practice and procedure, Freight, Maritime carriers, 
Reporting and recordkeeping requirements.

46 CFR Part 545

    Antitrust, Maritime carriers.

    For the reasons set forth above, the Federal Maritime Commission is 
amending 46 CFR parts 503, 515, 530, 532, 535, and 545 as follows:

PART 503--PUBLIC INFORMATION

0
1. The authority citation for part 503 is revised to read as follows:

    Authority:  5 U.S.C. 331, 552, 552a, 552b, 553; 31 U.S.C. 9701; 
46 U.S.C. 303; E.O. 13526 of January 5, 2010 75 FR 707, 3 CFR, 2010 
Comp., p. 298, sections 5.1(a) and (b).


0
2. Amend Sec.  503.72 by revising paragraph (a) to read as follows:


Sec.  503.72   General rule--meetings.

    (a) Except as otherwise provided in Sec. Sec.  503.73, 503.74, 
503.75, 503.76, and 503.84, every portion of every meeting and every 
portion of a series of meetings of the agency shall be open to public 
observation.
* * * * *

0
3. Amend Sec.  503.78 by revising paragraph (a) to read as follows:


Sec.  503.78   General rule--information pertaining to meeting.

    (a) As defined in Sec.  503.71, all information pertaining to a 
portion or portions of a meeting or portion or portions of a series of 
meetings of the agency shall be disclosed to the public unless excepted 
from such disclosure under Sec. Sec.  503.79 through 503.81 or Sec.  
503.84.
* * * * *

0
4. Add Sec.  503.84 to subpart I to read as follows:


Sec.  503.84   Nonpublic Collaborative Discussions.

    (a) General. Notwithstanding Sec.  503.72, a majority of the 
Commissioners may hold a meeting that is not open to public observation 
to discuss official agency business if:
    (1) No formal or informal vote or other official agency action is 
taken at the meeting;
    (2) Each individual present at the meeting is a Commissioner or an 
employee of the Commission;
    (3) At least one (1) Commissioner from each political party is 
present at the meeting, if there are sitting Commissioners from more 
than one party; and
    (4) The General Counsel of the Commission is present at the 
meeting.
    (b) Disclosure of nonpublic collaborative discussions. Except as 
provided under paragraph (c) of this section, not later than two (2) 
business days after the conclusion of a meeting

[[Page 9683]]

under paragraph (a) of this section, the Commission shall make 
available to the public, in a place easily accessible to the public:
    (1) A list of the individuals present at the meeting; and
    (2) A summary of the matters discussed at the meeting, except for 
any matters the Commission properly determines may be withheld from the 
public under Sec.  503.73.
    (c) Exception. If the Commission properly determines matters may be 
withheld from the public under Sec.  503.73, the Commission shall 
provide a summary with as much general information as possible on those 
matters withheld from the public.
    (d) Ongoing proceedings. If a meeting under paragraph (a) of this 
section directly relates to an ongoing proceeding before the 
Commission, the Commission shall make the disclosure under paragraph 
(b) of this section on the date of the final Commission decision.

0
5. Amend Sec.  503.85 by revising paragraph (a) introductory text to 
read as follows:


Sec.  503.85   Agency recordkeeping requirements.

    (a) In the case of any portion or portions of a meeting or portion 
or portions of a series of meetings determined by the agency to be 
closed to public observation under the provisions of Sec. Sec.  502.73 
through 503.75, the following records shall be maintained by the 
Secretary of the agency:
* * * * *

PART 515--LICENSING, FINANCIAL RESPONSIBILITY REQUIREMENTS, AND 
GENERAL DUTIES FOR OCEAN TRANSPORTATION INTERMEDIARIES

0
6. The authority citation for part 515 continues to read as follows:

    Authority:  5 U.S.C. 553; 31 U.S.C. 9701; 46 U.S.C. 305, 40102, 
40104, 40501-40503, 40901-40904, 41101-41109, 41301-41302, 41305-
41307; Pub. L. 105-383, 112 Stat. 3411; 21 U.S.C. 862.


0
7. Revise Sec.  515.3 to read as follows:


Sec.  515.3   License; when required.

    (a) Except as otherwise provided in this part, no person in the 
United States may advertise, hold oneself out, or act as an ocean 
transportation intermediary unless that person holds a valid license 
issued by the Commission.
    (b) For purposes of this part, a person is considered to be ``in 
the United States'' if such person is resident in, or incorporated or 
established under, the laws of the United States.

0
8. Amend Sec.  515.4 by revising paragraph (b) to read as follows:


Sec.  515.4   License; when not required.

* * * * *
    (b) Agents, employees, or branch offices of an ocean transportation 
intermediary.
    (1) A disclosed agent, individual employee, or branch office of an 
ocean transportation intermediary is not required to be licensed in 
order to act on behalf of and in the name of such ocean transportation 
intermediary.
    (2) An ocean transportation intermediary must report branch offices 
to the Commission in Form FMC-18 or under the procedures in Sec.  
515.20(e).
    (3) An ocean transportation intermediary is fully responsible for 
the acts and omissions of any of its employees and agents that are 
performed in connection with the conduct of the ocean transportation 
intermediary's business.
* * * * *

0
9. Amend Sec.  515.19 by revising paragraph (g)(1)(vii) to read as 
follows:


Sec.  515.19   Registration of foreign-based unlicensed NVOCC.

* * * * *
    (g) * * *
    (1) * * *
    (vii) Knowingly and willfully accepting cargo from or transporting 
cargo for the account of:
    (A) an NVOCC that does not have a published tariff as required by 
46 U.S.C. 40501 and part 520 of this chapter, and a bond, insurance, or 
other surety as required by 46 U.S.C. 40902 and this part; or
    (B) an OFF that does not have a bond, insurance, or other surety as 
required by 46 U.S.C. 40902 and this part; and
* * * * *

0
10. Amend Sec.  515.21 by revising paragraph (a) introductory text, and 
paragraphs (a)(1), and (a)(2) to read as follows:


Sec.  515.21   Financial Responsibility Requirements.

    (a) Form and amount. Except as otherwise provided in this part, no 
person may advertise, hold oneself out, or act as an ocean 
transportation intermediary unless that person furnishes a bond, proof 
of insurance, or other surety in a form and amount determined by the 
Commission to insure financial responsibility. The bond, insurance, or 
other surety covers the transportation-related activities of an ocean 
transportation intermediary.
    (1) Any person in the United States advertising, holding oneself 
out, or acting as an ocean freight forwarder as defined in Sec.  
515.2(m)(1) shall furnish evidence of financial responsibility in the 
amount of $50,000.
    (2) Any person in the United States advertising, holding oneself 
out, or acting as an NVOCC as defined in Sec.  515.2(m)(2) shall 
furnish evidence of financial responsibility in the amount of $75,000.
* * * * *

0
11. Amend Sec.  515.27 by revising paragraph (a), paragraph (b) 
introductory text, and paragraphs (b)(1), and (c) to read as follows:


Sec.  515.27   Proof of compliance--NVOCC.

    (a) No common carrier may knowingly and willfully accept cargo from 
or transport cargo for the account of:
    (1) An NVOCC that does not have a published tariff as required by 
46 U.S.C. 40501 and part 520 of this chapter, and a bond, insurance, or 
other surety as required by 46 U.S.C. 40902 and this part; or
    (2) An OFF that does not have a bond, insurance, or other surety as 
required by 46 U.S.C. 40902 and this part.
    (b) A common carrier can obtain proof of an NVOCC or OFF's 
compliance with the OTI licensing, registration, tariff and financial 
responsibility requirements by:
    (1) Consulting the Commission's website www.fmc.gov as provided in 
paragraph (d) of this section, to verify that the NVOCC or OFF has 
complied with the applicable licensing, registration, tariff, and 
financial responsibility requirements; or
* * * * *
    (c) A common carrier that has employed the procedure prescribed in 
paragraph (b)(1) of this section shall be deemed to have met its 
obligations under 46 U.S.C. 41104(a)(11), unless the common carrier 
knew that such NVOCC or OFF was not in compliance with the applicable 
tariff or financial responsibility requirements.
* * * * *

PART 530--SERVICE CONTRACTS

0
12. The authority citation for part 530 continues to read as follows:

    Authority:  5 U.S.C. 553; 46 U.S.C. 305, 40301-40306, 40501-
40503, 41307.

0
13. Amend Sec.  530.6 by revising paragraph (d) to read as follows:


Sec.  530.6   Certification of shipper status.

* * * * *
    (d) Reliance on NVOCC proof; independent knowledge. An ocean common 
carrier, agreement or conference executing a service contract shall be 
deemed to have complied with

[[Page 9684]]

46 U.S.C. 41104(a)(12) upon meeting the requirements of paragraphs (a) 
and (b) of this section, unless the carrier party had reason to know 
such certification or documentation of NVOCC tariff and bonding was 
false.

PART 532--NVOCC NEGOTIATED RATE ARRANGEMENTS

0
14. The authority citation for part 532 continues to read as follows:

    Authority:  46 U.S.C. 40103.


0
15. Amend Sec.  532.2 by revising paragraph (e) to read as follows:


Sec.  532.2   Scope and applicability.

* * * * *
    (e) The prohibition in 46 U.S.C. 41104(a)(2)(A);
* * * * *

0
16. Amend Sec.  532.7 by revising paragraph (c) to read as follows:


Sec.  532.7   Recordkeeping and audit.

* * * * *
    (c) Failure to keep or timely produce original NRAs will disqualify 
an NVOCC from the operation of the exemption provided pursuant to this 
part, regardless of whether it has been invoked by notice as set forth 
above, and may result in a Commission finding of a violation of 46 
U.S.C. 41104(a)(1), 41104(a)(2)(A) or other acts prohibited by the 
Shipping Act.

PART 535--OCEAN COMMON CARRIER AND MARINE TERMINAL OPERATOR 
AGREEMENTS SUBJECT TO THE SHIPPING ACT OF 1984

0
17. The authority citation for part 535 continues to read as follows:

    Authority:  5 U.S.C. 553; 46 U.S.C. 305, 40101-40104, 40301-
40307, 40501-40503, 40901-40904, 41101-41109, 41301-41302, and 
41305-41307.

0
18. Amend Sec.  535.602 by revising paragraph (b)(6) to read as 
follows:


Sec.  535.602   Federal Register notice.

* * * * *
    (b) * * *
    (6) A request for comments, including relevant information and 
documents, regarding the agreement and the date by which comments 
should be submitted in order to be most useful to the Commission's 
review of the agreement.

0
19. Amend Sec.  535.603 by revising paragraph (a) to read as follows:


Sec.  535.603   Comment.

    (a) Persons may file with the Secretary written comments, including 
relevant information and documents, regarding a filed agreement. 
Commenters may submit the comment by email to [email protected] or 
deliver to Secretary, Federal Maritime Commission, 800 N Capitol St. 
NW, Washington, DC 20573-0001. The Commission will treat such comments 
as confidential in accordance with Sec.  535.608.
* * * * *

0
20. Amend Sec.  535.608 by revising paragraph (a) to read as follows:


Sec.  535.608   Confidentiality of submitted material.

    (a) Except for an agreement filed under 46 U.S.C. ch. 403, all 
information and documents submitted to the Commission by the filing 
party(ies) or third parties regarding an agreement will be exempt from 
disclosure under 5 U.S.C. 552. Included in this disclosure exemption is 
information provided in the Information Form, voluntary submission of 
additional information, reasons for noncompliance, replies to requests 
for additional information, and third-party comments.
* * * * *

PART 545--INTERPRETATIONS AND STATEMENTS OF POLICY

0
21. The authority citation for part 545 continues to read as follows:

    Authority:  5 U.S.C. 553; 46 U.S.C. 305, 40307, 40501-40503, 
41101-41106, and 40901-40904; 46 CFR 515.23.


0
22. Amend Sec.  545.1 by revising paragraph (a) to read as follows:


Sec.  545.1   Interpretation of Shipping Act of 1984--Refusal to 
negotiate with shippers' associations.

    (a) 46 U.S.C. 40502 authorizes ocean common carriers and agreements 
between or among ocean common carriers to enter into a service contract 
with a shippers' association, subject to the requirements of the 
Shipping Act of 1984 (``Act''). 46 U.S.C. 41104(a)(10) prohibits 
carriers from unreasonably refusing to deal or negotiate. 46 U.S.C. 
40307(a)(3) exempts from the antitrust laws any activity within the 
scope of the Act, undertaken with a reasonable basis to conclude that 
it is pursuant to a filed and effective agreement.
* * * * *

    By the Commission.
Rachel Dickon,
Secretary.
[FR Doc. 2020-02493 Filed 2-19-20; 8:45 am]
 BILLING CODE 6731-AA-P