Riers, Ocean Freight Forwarders, Marine Terminal Operations, Passenger Vessels, Tariffs and Service Contracts

Federal Maritime Commission § 510.2 SUBCHAPTER B—REGULATIONS AFFECTING MARITIME CAR- RIERS, OCEAN FREIGHT FORWARDERS, MARINE TERMINAL OPERATIONS, PASSENGER VESSELS, TARIFFS AND SERVICE CONTRACTS

PART 510—LICENSING OF OCEAN lations concerning practices of freight FREIGHT FORWARDERS forwarders and common carriers, and the grounds and procedures for revoca- Subpart A—General tion and suspension of licenses. (b) Information obtained under this Sec. part is used to determine the qualifica- 510.1 Scope. tions of freight forwarders and their 510.2 Definitions. compliance with shipping statutes and 510.3 License; when required. regulations. Failure to follow the pro- 510.4 License; when not required. visions of this part may result in de- Subpart B—Eligibility and Procedure for nial, revocation or suspension of a Licensing; Bond Requirements freight forwarder license. Persons operating without the proper license may 510.11 Basic requirements for licensing; eli- be subject to civil penalties not to ex- gibility. ceed $5,000 for each such violation un- 510.12 Application for license. less the violation is willfully and 510.13 Investigation of applicants. knowingly committed, in which case 510.14 Surety bond requirements. 510.15 Denial of license. the amount of the civil penalty may 510.16 Revocation or suspension of license. not exceed $25,000 for each violation; 510.17 Application after revocation or de- for other violations of the provisions of nial. this part, the civil penalties range from 510.18 Issuance and use of license. $5,000 to $25,000 for each violation (46 510.19 Changes in organization. U.S.C. app. 1712). Each day of a con- tinuing violation shall constitute a Subpart C—Duties and Responsibilities of separate violation. Freight Forwarders; Forwarding Charges; Reports to Commission § 510.2 Definitions. 510.21 General duties. The terms used in this part are de- 510.22 Forwarder and principal; fees. fined as follows: 510.23 Forwarder and carrier; compensation. (a) Act means the Shipping Act of 510.24 Records required to be kept. 1984 (46 U.S.C. app. 1701–1720). 510.25 Anti-rebate certifications. (b) Beneficial interest includes a lien 510.91 OMB control numbers assigned pursu- or interest in or right to use, enjoy, ant to the Paperwork Reduction Act. profit, benefit, or receive any advan- AUTHORITY: 5 U.S.C. 553; 31 U.S.C. 9701; 46 tage, either proprietary or financial, U.S.C. app. 1702, 1707, 1709, 1710, 1712, 1714, from the whole or any part of a ship- 1716, and 1718; 21 U.S.C. 853a. ment of cargo where such interest SOURCE: 49 FR 36297, Sept. 14, 1984, unless arises from the financing of the ship- otherwise noted. ment or by operation of law, or by agreement, express or implied. The Subpart A—General term beneficial interest shall not include any obligation in favor of a freight for- § 510.1 Scope. warder arising solely by reason of the (a) This part sets forth regulations advance of out-of-pocket expenses in- providing for the licensing as ocean curred in dispatching a shipment. freight forwarders of persons, including (c) Branch office means any office es- individuals, corporations and partner- tablished by or maintained by or under ships, who wish to carry on the busi- the control of a licensee for the pur- ness of freight forwarding. This part pose of rendering freight forwarding also prescribes the bonding require- services, which office is located at an ments and the duties and responsibil- address different from that of the li- ities of ocean freight forwarders, regu- censee’s designated home office. This

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term does not include a separately in- (11) Handling freight or other monies corporated entity. advanced by shippers, or remitting or (d) Brokerage refers to payment by a advancing freight or other monies or common carrier to an ocean freight credit in connection with the dispatch- broker for the performance of services ing of shipments; as specified in paragraph (m) of this (12) Coordinating the movement of section. shipments from origin to vessel; and (e) Common carrier means any person (13) Giving expert advice to exporters holding itself out to the general public concerning letters of credit, other doc- to provide transportation by water of uments, licenses or inspections, or on passengers or cargo between the United problems germane to the cargoes’ dis- States and a foreign country for com- patch. pensation that: (i) From the United States means (1) Assumes responsibility for the oceanborne export commerce from the transportation from the port or point United States, its Territories, or pos- of receipt to the port or point of des- sessions to foreign countries. tination, and (j) Licensee is any person licensed by (2) Utilizes, for all or part of that the Federal Maritime Commission as transportation, a vessel operating on an ocean freight forwarder. the high seas or the Great Lakes be- (k) Non-vessel-operating common car- tween a port in the United States and rier means a common carrier that does a port in a foreign country. not operate the vessels by which the (f) Compensation means payment by a ocean transportation is provided, and common carrier to a freight forwarder is a shipper in its relationship with an for the performance of services as spec- ocean common carrier. ified in § 510.23(c) of this part. (l) Ocean common carrier means a ves- (g) Freight forwarding fee means sel-operating common carrier but the charges billed by a freight forwarder to term does not include one engaged in a shipper, consignee, seller, purchaser, ocean transportation by ferry boat or or any agent thereof, for the perform- ocean tramp. ance of freight forwarding services. (m) Ocean freight broker is an entity (h) Freight forwarding services refers which is engaged by a carrier to secure to the dispatching of shipments on be- cargo for such carrier and/or to sell or half of others, in order to facilitate offer for sale ocean transportation shipment by a common carrier, which services and which holds itself out to may include, but are not limited to, the public as one who negotiates be- the following: tween shipper or consignee and carrier (1) Ordering cargo to port; for the purchase, sale, conditions and (2) Preparing and/or processing ex- terms of transportation. port declarations; (n) Ocean freight forwarder means a (3) Booking, arranging for or con- person in the United States that: firming cargo space; (1) Dispatches shipments from the (4) Preparing or processing delivery United States via common carriers and orders or dock receipts; books or otherwise arranges space for (5) Preparing and/or processing ocean those shipments on behalf of shippers; bills of lading; and (6) Preparing or processing consular (2) Processes the documentation or documents or arranging for their cer- performs related activities incident to tification; those shipments. (7) Arranging for warehouse storage; (o) Principal, except as used in Surety (8) Arranging for cargo insurance; Bond Form FMC 59, Rev., refers to the (9) Clearing shipments in accordance shipper, consignee, seller, or purchaser with United States Government export of property, and to anyone acting on regulations; behalf of such shipper, consignee, sell- (10) Preparing and/or sending advance er, or purchaser of property, who em- notifications of shipments or other ploys the services of a licensee to fa- documents to banks, shippers, or con- cilitate the ocean transportation of signees, as required; such property.

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(p) Reduced forwarding fees means not required to be licensed in order to charges to a principal for forwarding act solely for such licensee, but each li- services that are below the licensee’s censed ocean freight forwarder will be usual charges for such services. held strictly responsible hereunder for (q) Shipment means all of the cargo the acts or omissions of any of its em- carried under the terms of a single bill ployees rendered in connection with of lading. the conduct of the business. (r) Shipper means an owner or person (c) Common carrier. A common car- for whose account the ocean transpor- rier, or agent thereof, may perform tation of cargo is provided or the per- ocean freight forwarding services with- son to whom delivery is to be made. out a license only with respect to cargo (s) Small shipment refers to a single carried under such carrier’s own bill of shipment sent by one consignor to one lading. Charges for such forwarding consignee on one bill of lading which services shall be assessed in conform- does not exceed the underlying com- ance with the carrier’s published tariffs mon carrier’s minimum charge rule. on file with the Commission. (t) Special contract is a contract for (d) Ocean freight brokers. An ocean freight forwarding services which pro- freight broker is not required to be li- vides for a periodic lump sum fee. censed to perform those services speci- (u) United States includes the several fied in § 510.2(m). States, the District of Columbia, the Commonwealth of Puerto Rico, the Subpart B—Eligibility and Proce- Commonwealth of the Northern Mari- dure for Licensing; Bond Re- anas, and all other United States terri- quirements tories and possessions. § 510.11 Basic requirements for licens- § 510.3 License; when required. ing; eligibility. Except as otherwise provided in this (a) Necessary qualifications. To be eli- part, a person must hold a valid ocean gible for an ocean freight forwarder’s freight forwarder license in order to license, the applicant must dem- perform freight forwarding services, onstrate to the Commission that: and, except as provided in § 510.4, no (1) It possesses the necessary experi- person shall perform, or hold out to ence, that is, its qualifying individual perform, such services unless such per- has a minimum of three (3) years expe- son holds a valid license issued by the rience in ocean freight forwarding du- Commission to engage in such busi- ties in the United States, and the nec- ness. A separate license is required for essary character to render forwarding each branch office that is separately services; and incorporated. (2) It has obtained and filed with the Commission a valid surety bond in con- § 510.4 License; when not required. formance with § 510.14. A license is not required in the fol- (b) Qualifying individual. The follow- lowing circumstances: ing individuals must qualify the appli- (a) Shipper. Any person whose pri- cant for a license: mary business is the sale of merchan- (1) Sole proprietorship—The applicant dise may, without a license, dispatch sole proprietor. and perform freight forwarding services (2) Partnership—At least one of the on behalf of its own shipments, or on active managing partners, but all part- behalf of shipments or consolidated ners must execute the application. shipments of a parent, subsidiary, affil- (3) Corporation—At least one of the iate, or associated company. Such per- active corporate officers. son shall not receive compensation (c) Affiliates of forwarders. An inde- from the common carrier for any serv- pendently qualified applicant may be ices rendered in connection with such granted a separate license to carry on shipments. the business of forwarding even though (b) Employee or branch office of li- it is associated with, under common censed forwarder. An individual em- control with, or otherwise related to ployee or unincorporated branch office another ocean freight forwarder of a licensed ocean freight forwarder is through stock ownership or common

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directors or officers, if such applicant of $687 made payable to the Federal submits: (1) A separate application and Maritime Commission. fee, and (2) a valid surety bond in the (c) Rejection. Any application which form and amount prescribed under appears upon its face to be incomplete § 510.14. The proprietor, partner or offi- or to indicate that the applicant fails cer who is the qualifying individual of to meet the licensing requirements of one active licensee shall not also be the Shipping Act of 1984, or the Com- designated the qualifying proprietor, mission’s regulations, shall be returned partner or officer of an applicant for by certified U.S. mail to the applicant another ocean freight forwarder li- without further processing, together cense. with an explanation of the reason(s) for (d) Common carrier. A common carrier rejection, and the application fee shall or agent thereof which meets the re- be refunded in full. All other applica- quirements of this part may be licensed tions will be assigned an application to dispatch shipments moving on other number, and each applicant will be no- than such carrier’s own bill of lading tified of the number assigned to its ap- subject to the provisions of § 510.23(g). plication. Persons who have had their [49 FR 36297, Sept. 14, 1984; 49 FR 38544, Oct. applications returned may reapply for 1, 1984] a license at any time thereafter by submitting a new application, together § 510.12 Application for license. with the full application fee. (a) Application and forms. (1) Any per- (d) Investigation. Each applicant shall son who wishes to obtain a license to be investigated in accordance with carry on the business of forwarding § 510.13. shall submit, in duplicate, to the Direc- (e) Changes in fact. Each applicant tor of the Commission’s Bureau of Tar- and each licensee shall submit to the iffs, a completed application Form Commission, in duplicate, an amended FMC–18 Rev. (Application for a License Form FMC–18 Rev. advising of any as an Ocean Freight Forwarder) and a changes in the facts submitted in the completed anti-rebate certification in original application, within thirty (30) the format prescribed under § 510.25. days after such change(s) occur. In the Copies of Form FMC–18 Rev. may be case of an application for a license, any obtained from the Director, Bureau of unreported change may delay the proc- Tariffs, Federal Maritime Commission, essing and investigation of the applica- Washington, DC 20573, or from any of tion and may result in rejection or de- the Commission’s offices at other loca- nial of the application. No fee is re- tions. Notice of filing of such applica- quired when reporting changes to an tion shall be published in the FEDERAL application for initial license under REGISTER and shall state the name and this section. address of the applicant. If the applicant is a corporation or partnership, [49 FR 36297, Sept. 14, 1984, as amended at 55 the names of the officers or partners FR 42194, Oct. 18, 1990; 59 FR 59171, Nov. 16, thereof shall be published. 1994] (2) An individual who is applying for a license in his or her own name must § 510.13 Investigation of applicants. complete the following certification. The Commission shall conduct an investigation of the applicant’s qualifica- I. lll (Name) lll, certify under penalty of perjury under the laws of the United tions for a license. Such investigations States, that I have not been convicted, after may address: September 1, 1989, of any Federal or State of- (a) The accuracy of the information fense involving the distribution or possession submitted in the application; of a controlled substance, or that if I have (b) The integrity and financial re- been so convicted, I am not ineligible to responsibility of the applicant; ceive Federal benefits, either by court order or operation of law, pursuant to 21 U.S.C. (c) The character of the applicant 853a. and its qualifying individual; and (b) Fee. The application shall be ac- (d) The length and nature of the companied by a money order, certified qualifying individual’s experience in check or cashier’s check in the amount handling freight forwarding duties.

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§ 510.14 Surety bond requirements. the licensee shall have submitted a (a) Form and amount. No license shall valid replacement surety bond before be issued to an applicant who does not such termination date. Replacement have a valid surety bond (FMC–59 Rev.) surety bonds must bear an effective on file with the Commission in the date no later than the termination amount of $30,000. The amount of such date of the expiring bond. bond shall be increased by $10,000 for [49 FR 36297, Sept. 14, 1984, as amended at 59 each of the applicant’s unincorporated FR 59171, Nov. 16, 1994] branch offices. Bonds must be issued by a surety company found acceptable by § 510.15 Denial of license. the Secretary of the Treasury. Surety Bond Form FMC–59 Rev. can be ob- If the Commission determines, as a tained in the same manner as Form result of its investigation, that the ap- FMC–18 Rev. under § 510.12(a). plicant: (b) Filing of bond. Upon notification (a) Does not possess the necessary ex- by the Commission by certified U.S. perience or character to render for- mail that the applicant has been ap- warding services; proved for licensing, the applicant (b) Has failed to respond to any law- shall file with the Director of the Com- ful inquiry of the Commission; or mission’s Bureau of Tariffs, a surety (c) Has made any willfully false or bond in the form and amount pre- misleading statement to the Commis- scribed in § 510.14(a). No license will be sion in connection with its application, issued until the Commission is in re- A letter of intent to deny the applica- ceipt of a valid surety bond from the applicant. If more than six (6) months tion shall be sent to the applicant by elapse between issuance of the notifica- certified U.S. mail, stating the rea- tion of qualification and receipt of the son(s) why the Commission intends to surety bond, the Commission shall, at deny the application. If the applicant its discretion, undertake a supple- submits a written request for hearing mentary investigation to determine on the proposed denial within twenty the applicant’s continued qualification. (20) days after receipt of notification, The fee for such supplementary inves- such hearing shall be granted by the tigation shall be $213 payable by money Commission pursuant to its Rules of order, certified check or cashier’s Practice and Procedure contained in check to the Federal Maritime Commis- part 502 of this chapter. Otherwise, de- sion. Should the applicant not file the nial of the application will become ef- requisite surety bond within two years fective and the applicant shall be so of notification, the Commission will notified by certified U.S. mail. Civil consider the application to be invalid. penalties for violations of the Act or (c) Branch offices. A new surety bond, any Commission order, rule or regula- or rider to the existing bond, increas- tion may be assessed in accordance ing the amount of the bond in accord- with subpart W of part 502 of this chap- ance with § 510.14(a), shall be filed with ter in any proceeding on the proposed the Commission prior to the date the denial of a license or may be com- licensee commences operation of any promised for any such violation when a branch office. Failure to adhere to this proceeding has not been instituted. requirement may result in revocation of the license. [49 FR 36297, Sept. 14, 1984, as amended at 58 (d) Termination of bond. No license FR 27213, May 7, 1993] shall remain in effect unless a valid surety bond is maintained on file with § 510.16 Revocation or suspension of license. the Commission. Upon receipt of notice of termination of a surety bond, the (a) Grounds for revocation. Except for Commission shall notify the concerned the automatic revocation for termi- licensee by certified U.S. mail, at its nation of a surety bond under last known address, that the Commis- § 510.14(d), or as provided in § 510.14(c), a sion shall, without hearing or other license may be revoked or suspended proceeding, revoke the license as of the after notice and hearing for any of the termination date of the bond, unless following reasons:

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(1) Violation of any provision of the (c) Notice of revocation. The Commis- Act, or any other statute or Commis- sion shall publish in the FEDERAL REG- sion order or regulation related to car- ISTER a notice of each revocation. rying on the business of forwarding; [49 FR 36297, Sept. 14, 1984, as amended at 55 (2) Failure to respond to any lawful FR 35318, Aug. 29, 1990; 57 FR 39623, Sept. 1, order or inquiry by the Commission; 1992; 58 FR 27213, May 7, 1993] (3) Making a willfully false or misleading statement to the Commission § 510.17 Application after revocation in connection with an application for a or denial. license or its continuance in effect; Whenever a license has been revoked (4) Where the Commission determines or an application has been denied be- that the licensee is not qualified to cause the Commission has found the li- render freight forwarding services; censee or applicant to be not qualified (5) Failure to honor the licensee’s fi- to render forwarding services, any fur- nancial obligations to the Commission, ther application within 3 years of the such as for civil penalties assessed or date of the most recent conduct on agreed to in a settlement agreement which the Commission’s notice of rev- under subpart W of part 502 of this ocation or denial was based, made by chapter; or such former licensee or applicant or by (6) Failure to file an anti-rebate cer- another applicant employing the same tification as required by § 510.25 and part 582 of this chapter. Any licensed qualifying individual or controlled by freight forwarder who fails to file an persons on whose conduct the Commis- anti-rebate certification will be noti- sion based its determination for rev- fied by FEDERAL REGISTER publication ocation or denial, shall be reviewed di- and by certified mail that if within rectly by the Commission. forty-five (45) days from the date the certified notice is mailed the licensee § 510.18 Issuance and use of license. does not either establish that the re- (a) Qualification necessary for issuance. quired anti-rebate certification was The Commission will issue a license if filed in accordance with § 510.25 and it determines, as a result of its inves- part 582 of this chapter or file the re- tigation, that the applicant possesses quired anti-rebate certification, its li- the necessary experience and character cense will be suspended until such time to render forwarding services and has as it is reinstated by the Commission filed the required surety bond. after an anti-rebate certification is (b) To whom issued. The Commission filed. The license of any freight for- will issue a license only in the name of warder who files an anti-rebate certifi- the applicant, whether the applicant be cation after December 31 but before the a sole proprietorship, a partnership, or end of the forty-five (45) days notice pe- a corporation, and the license will be riod will not be suspended; however, issued to only one legal entity. A li- the licensee will be subject to civil pen- cense issued to a sole proprietor doing alties as provided in part 582 of this business under a trade name shall be in chapter. After the forty-five (45) days, the name of the sole proprietor, indi- any licensee that still does not have an cating the trade name under which the anti-rebate certification on file with the Commission will be notified by licensee will be conducting business. Only one license shall be issued to any FEDERAL REGISTER publication and certified mail, return receipt requested, applicant regardless of the number of that its license has been suspended. names under which such applicant may (b) Civil penalties. As provided for in be doing business. subpart W of part 502 of this chapter, (c) Use limited to named licensee. Ex- civil penalties for violations of the Act cept as otherwise provided in this part, or any Commission order, rule, or regu- such license is limited exclusively to lation may be assessed in any proceed- use by the named licensee and shall not ing to revoke or suspend a license and be transferred without approval to an- may be compromised when such a pro- other person. ceeding has not been instituted.

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§ 510.19 Changes in organization. ficer(s) who may qualify the licensee. (a) The following changes in an exist- Such qualifying individual(s) must ing licensee’s organization require meet the applicable requirements set prior approval of the Commission: forth in § 510.11(a) of this part. The li- (1) Transfer of a corporate license to censee may continue to operate as an another person; ocean freight forwarder while the Com- (2) Change in ownership of an individ- mission investigates the qualifications ual proprietorship; of the newly designated partner or offi- (3) Addition of one or more partners cer. to a licensed partnership; (d) Incorporation of branch office. In (4) Change in the business structure the event a licensee’s validly operating of a licensee from or to a sole propri- branch office undergoes incorporation etorship, partnership, or corporation, as a separate entity, the licensee may whether or not such change involves a continue to operate such office pending change in ownership; receipt of a separate license, provided (5) Any change in a licensee’s name; that: or (6) Change in the identity or status of (1) The separately incorporated en- the designated qualifying individual, tity applies to the Commission for its except as discussed in paragraphs (b) own license within ten (10) days after and (c) of this section. incorporation, and (b) Operation after death of sole propri- (2) The continued operation of the of- etor. In the event the owner of a li- fice is carried on as a bona fide branch censed sole proprietorship dies, the li- office of the licensee, under its full censee’s executor, administrator, control and responsibility, and not as heir(s), or assign(s) may continue oper- an operation of the separately incor- ation of such proprietorship solely with porated entity. respect to shipments for which the de- (e) Application form and fee. Applica- ceased sole proprietor had undertaken tions for Commission approval of sta- to act as an ocean freight forwarder tus changes or for license transfers pursuant to the existing license, if the under paragraph (a) of this section death is reported within thirty (30) shall be filed in duplicate with the Di- days to the Commission and to all prin- rector, Bureau of Tariffs, Certification cipals for whom services on such shipments are to be rendered. The accept- and Licensing, Federal Maritime Com- ance or solicitation of any other ship- mission, on form FMC–18 Rev., to- ments is expressly prohibited until a gether with a processing fee of $365, new license has been issued. Applica- made payable by money order, certified tions for a new license by the said ex- check or cashier’s check to the Federal ecutor, administrator, heir(s), or as- Maritime Commission. Should a personal sign(s) shall be made on Form FMC–18 check not be honored when presented for Rev., and shall be accompanied by the payment, the processing of the application transfer fee set forth in paragraph (e) shall be suspended until the processing fee of this section. is paid. (c) Operation after retirement, resigna- (f) Acquisition of one or more additional tion, or death of qualifying individual. licensees. In the event a licensee ac- When a partnership or corporation has quires one or more additional licens- been licensed on the basis of the quali- ees, for the purpose of merger, consoli- fications of one or more of the partners dation, or control, the acquiring li- or officers thereof, and such qualifying censee shall advise the Commission of individual(s) shall no longer serve in a such change within thirty days after full-time, active capacity with the such change occurs by submitting in firm, the licensee shall report such duplicate, an amended Form FMC–18, change to the Commission within thir- Rev. No application fee is required ty (30) days. Within the same 30-day pe- when reporting this change. riod, the licensee shall furnish to the Commission the name(s) and detailed [49 FR 36297, Sept. 14, 1984, as amended at 57 ocean freight forwarding experience of FR 40129, Sept. 2, 1992; 59 FR 59171, Nov. 16, other active managing partner(s) or of- 1994]

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Subpart C—Duties and Respon- (1) Agree to perform forwarding serv- sibilities of Freight Forwarders; ices on export shipments as an associ- ate, correspondent, officer, employee, Forwarding Charges; Reports agent, or sub-agent of any person to Commission whose license has been revoked or sus- § 510.21 General duties. pended pursuant to § 510.16; (2) Assist in the furtherance of any (a) License; name and number. Each li- forwarding business of such person; censee shall carry on the business of (3) Share forwarding fees or freight forwarding only under the name in compensation with any such person; or which its license is issued and only (4) Permit any such person, directly under its license number as assigned by or indirectly, to participate, through the Commission. Wherever the licens- ownership or otherwise, in the control ee’s name appears on shipping docu- or direction of the freight forwarding ments, its FMC license number shall business of the licensee. also be included. (e) Arrangements with unauthorized (b) Stationery and billing forms; notice persons. No licensee shall enter into an of shipper affiliation. (1) The name and agreement or other arrangement (ex- license number of each licensee shall cluding sales agency arrangements not be permanently imprinted on the li- prohibited by law or this part) with an censee’s office stationery and billing unlicensed person so that any resulting forms. The Commission may tempo- fee, compensation, or other benefit in- rarily waive this requirement for good ures to the benefit of the unlicensed cause shown if the licensee rubber person. When a licensee is employed for stamps or types its name and FMC li- the transaction of forwarding business cense number on all papers and in- by a person who is not the person re- voices concerned with any forwarding sponsible for paying the forwarding transaction. charges, the licensee shall also trans- (2) When a licensee is a shipper or mit to the person paying the forward- seller of goods in international com- ing charges a copy of its invoice for merce or affiliated with such an entity, services rendered. the licensee shall have the option of: (i) (f) False or fraudulent claims, false in- Identifying itself as such and/or, where formation. No licensee shall prepare or applicable, listing its affiliates on its file or assist in the preparation or fil- office stationery and billing forms, or ing of any claim, affidavit, letter of in- (ii) including the following notice on demnity, or other paper or document such items: concerning a forwarding transaction This company is a shipper or seller of goods which it has reason to believe is false in international commerce or is affiliated or fraudulent, nor shall any such li- with such an entity. Upon request, a general censee knowingly impart to a prin- statement of its business activities and those cipal, common carrier or other person, of its affiliates, along with a written list of false information relative to any for- the names of such affiliates, will be provided. warding transaction. (c) Use of license by others; prohibition. (g) Response to requests of Commission. No licensee shall permit its license or Upon the request of any authorized name to be used by any person who is representative of the Commission, a li- not a bona fide individual employee of censee shall make available promptly the licensee. Unincorporated branch of- for inspection or reproduction all fices of the licensee may use the li- records and books of account in con- cense number and name of the licensee nection with its forwarding business, if such branch offices: (1) Have been re- and shall respond promptly to any law- ported to the Commission in writing; ful inquiries by such representative. and (2) are covered by an increased (h) Policy against rebates. The follow- bond in accordance with § 510.14(c). ing declaration shall appear on all in- (d) Arrangements with forwarders voices submitted to principals: whose licenses have been revoked. Unless (Name of firm) has a policy against payment, prior written approval from the Com- solicitation, or receipt of any rebate, di- mission has been obtained, no licensee rectly or indirectly, which would be unlawful shall, directly or indirectly: under the United States Shipping Act of 1984.

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§ 510.22 Forwarder and principal; fees. and be readily distinguishable from a bill of lading. (a) Compensation or fee sharing. No li- (g) Invoices; documents available upon censee shall share, directly or indi- request. A licensee may charge its prin- rectly, any compensation or freight cipal for services rendered. Upon re- forwarding fee with a shipper, con- quest of its principal, each licensee signee, seller, or purchaser, or an shall provide a complete breakout of agent, affiliate, or employee thereof; the components of its charges and a nor with any person advancing the pur- true copy of any underlying document chase price of the property or guaran- or bill of charges pertaining to the li- teeing payment therefor; nor with any censee’s invoice. The following notice person having a beneficial interest in shall appear on each invoice to a prin- the shipment. cipal: (b) Withholding information. No licensee shall withhold any information Upon request, we shall provide a detailed breakout of the components of all charges concerning a forwarding transaction assessed and a true copy of each pertinent from its principal. document relating to these charges. (c) Due diligence. Each licensee shall exercise due diligence to ascertain the (h) Special contracts. To the extent accuracy of any information it imparts that special arrangements or contracts to a principal concerning any forward- are entered into by a licensee, the li- ing transaction. censee shall not deny equal terms to other shippers similarly situated. (d) Each licensee Errors and omissions. (i) Reduced forwarding fees. No li- shall comply with the laws of the Unit- censee shall render, or offer to render, ed States and any involved State, Ter- any freight forwarding service free of ritory, or possession thereof, and shall charge or at a reduced fee in consider- assure that to the best of its knowledge ation of receiving compensation from a there exists no error, misrepresenta- common carrier or for any other rea- tion in, or omission from any export son. Exception: A licensee may perform declaration, bill of lading, affidavit, or freight forwarding services for recog- other document which the licensee exe- nized relief agencies or charitable orga- cutes in connection with a shipment. A nizations, which are designated as such licensee who has reason to believe that in the tariff of the common carrier, its principal has not, with respect to a free of charge or at reduced fees. shipment to be handled by such li- (j) Accounting to principal. Each licensee, complied with the laws of the censee shall account to its principal(s) United States or any State, Common- for overpayments, adjustments of wealth or Territory thereof, or has charges, reductions in rates, insurance made any error or misrepresentation refunds, insurance monies received for in, or omission from, any export dec- claims, proceeds of c.o.d. shipments, laration, bill of lading, affidavit, or drafts, letters of credit, and any other other paper which the principal exe- sums due such principal(s). cutes in connection with such shipment, shall advise its principal § 510.23 Forwarder and carrier; com- promptly of the suspected noncompli- pensation. ance, error, misrepresentation or omis- (a) Disclosure of principal. The iden- sion, and shall decline to participate in tity of the shipper must always be dis- any transaction involving such docu- closed in the shipper identification box ment until the matter is properly and on the bill of lading. The licensee’s lawfully resolved. name many appear with the name of (e) Express written authority. No li- the shipper, but the licensee must be censee shall endorse or negotiate any identified as the shipper’s agent. draft, check, or warrant drawn to the (b) Certification required for compensa- order of its principal without the ex- tion. A common carrier may pay com- press written authority of such prin- pensation to a licensee only pursuant cipal. to such common carrier’s tariff provi- (f) Receipt for cargo. Each receipt is- sions. Where a common carrier’s tariff sued for cargo by a licensee shall be provides for the payment of compensa- clearly identified as Receipt for Cargo tion, such compensation shall be paid

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on any shipment forwarded on behalf of censee shall charge or collect com- others where the licensee has provided pensation in the event the underlying a written certification as prescribed in common carrier, or its agent, has, at paragraph (c) of this section and the the request of such licensee, performed shipper has been disclosed on the bill of any of the forwarding services set forth lading as provided for in paragraph (a) in § 510.2(h) unless such carrier or agent of this section. The common carrier is also a licensee, or unless no other li- shall be entitled to rely on such certifi- censee is willing and able to perform cation unless it knows that the certifi- such services. cation is incorrect. The common carrier shall retain such certification for a (f) Duplicative compensation. A com- period of five (5) years. mon carrier shall not pay compensa- (c) Form of certification. Where a li- tion for the services described in censee is entitled to compensation, the § 510.23(c) more than once on the same licensee shall provide the common car- shipment. rier with a signed certification which (g) Licensed non-vessel-operating com- indicates that the licensee has per- mon carriers; compensation. (1) A non- formed the required services that enti- vessel-operating common carrier or tle it to compensation. The certifi- person related thereto licensed under cation shall read as follows: this part may collect compensation The undersigned hereby certifies that nei- when, and only when, the following ther it nor any holding company, subsidiary, certification is made together with the affiliate, officer, director, agent or executive certification required under paragraph of the undersigned has a beneficial interest (c) of this section: in this shipment; that it is the holder of valid FMC License No. ———, issued by the The undersigned certifies that neither it nor Federal Maritime Commission and has per- any related person has issued a bill of lading formed the following services: or otherwise undertaken common carrier re- (1) Engaged, booked, secured, reserved, or sponsibility as a non-vessel-operating com- contracted directly with the carrier or its mon carrier for the ocean transportation of agent for space aboard a vessel or confirmed the shipment covered by this bill of lading. the availability of that space; and (2) Prepared and processed the ocean bill of (2) Whenever a person acts in the ca- lading, dock receipt, or other similar docu- pacity of a non-vessel-operating com- ment with respect to the shipment. mon carrier as to any shipment, such The required certification may be person shall not collect compensation, placed on one copy of the relevant bill nor shall any underlying ocean com- of lading, a summary statement from mon carrier pay compensation to such the licensee, the licensee’s compensa- person for such shipment. tion invoice, or as an endorsement on (h) A freight forwarder may not re- the carrier’s compensation check. Each ceive compensation from a common licensee shall retain evidence in its carrier with respect to any shipment in shipment files that the licensee, in which the forwarder has a beneficial in- fact, has performed the required serv- terest or with respect to any shipment ices enumerated on the certification. in which any holding company, subsidi- (d) Compensation pursuant to tariff ary, affiliate, officer, director, agent, provisions. No licensee, or employee or executive of such forwarder has a thereof, shall accept compensation beneficial interest. from a common carrier which is different than that specifically provided [49 FR 36297, Sept. 14, 1984; 49 FR 38544, Oct. for in the carrier’s effective tariff(s) 1, 1984; 57 FR 40131, Sept. 2, 1992] lawfully on file with the Commission. No conference or group of common car- § 510.24 Records required to be kept. riers shall deny in the export com- Each licensee shall maintain in an merce of the United States compensa- orderly and systematic manner, and tion to an ocean freight forwarder or keep current and correct, all records limit that compensation to less than a and books of account in connection reasonable amount. with its business of forwarding. These (e) Compensation; services performed by records must be kept in the United underlying carrier; exemptions. No li-

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States in such manner as to enable au- license through the first succeeding thorized Commission personnel to read- December 31 of an even-numbered cal- ily determine the licensee’s cash posi- endar year. tion, accounts receivable and accounts (c) The anti-rebating certificate shall payable. The licensee must maintain comply with the requirements of part the following records for a period of 582 of this chapter. five years: [57 FR 39623, Sept. 1, 1992] (a) General financial data. A current running account of all receipts and dis- § 510.91 OMB control numbers as- bursements, accounts receivable and signed pursuant to the Paperwork payable, and daily cash balances, sup- Reduction Act. ported by appropriate books of ac- This section displays the control count, bank deposit slips, cancelled numbers assigned to information col- checks, and monthly reconciliation of lection requirements of the Commis- bank statements. sion in this part by the Office of Man- (b) Types of services by shipment. A agement and Budget pursuant to the separate file shall be maintained for Paperwork Reduction Act of 1980, Pub. each shipment. Each file shall include L. 96–511. The Commission intends that a copy of each document prepared, this part comply with the requirements processed, or obtained by the licensee, of section 3507(f) of the Paperwork Re- including each invoice for any service duction Act, which requires that agen- arranged by the licensee and performed cies display a current control number by others, with respect to such ship- assigned by the Director of the Office ment. of Management and Budget (OMB) for (c) Receipts and disbursements by ship- each agency information collection re- ment. A record of all sums received and/ quirement: or disbursed by the licensee for services Current OMB rendered and out-of-pocket expenses Section Control No. advanced in connection with each shipment, including specific dates and 510.12 (Form FMC±18) ...... 3072±0018 510.14 ...... 3072±0018 amounts. 510.15 ...... 3072±0018 (d) Special contracts. A true copy, or if 510.19 (Form FMC±18) ...... 3072±0018 oral, a true and complete memoran- 510.21 through 510.25 ...... 3072±0018 dum, of every special arrangement or contract with a principal, or modifica- tion or cancellation thereof, to which PART 514—TARIFFS AND SERVICE it may be a party. Authorized Commis- CONTRACTS sion personnel and bona fide shippers shall have access to such records upon Subpart A—General Provisions reasonable request. Sec. 514.1 Scope, purpose, requirements, pen- § 510.25 Anti-rebate certifications. alties and fees. (a) Every licensed ocean freight for- 514.2 Definitions. 514.3 Exemptions and exclusions. warder shall file an anti-rebating cer- 514.4 Content, filing and cancellation of tar- tificate on or before December 31, 1992, iff material; general. and thereafter, on or before December 514.5—514.6 [Reserved] 31 of each succeeding even-numbered calendar year. Subpart B—Service Contracts (b) Every applicant for an ocean 514.7 Service contracts in foreign com- freight forwarder license shall file an merce. anti-rebating certificate with its license application. Any application for Subpart C—Form, Content and Use of Tariff an ocean freight forwarder license that Data does not include an anti-rebate certification in accordance with § 510.12 and 514.8 Electronic filing. 514.9 Filing/Amendment codes and required part 582 of this chapter shall be re- notice periods. jected. Certificates filed with license 514.10 Other items used throughout ATFI. applications shall be valid from the 514.11 Organization and tariff records; tariff granting of an ocean freight forwarder scope.

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