Movement on OTI Rule Changes Unclear Under New FMC Chairman, Says NCBFAA
RANCHO MIRAGE, Calif. -- The change in chairman at the Federal Maritime Commission adds another level of uncertainty to the regulatory movement of rule changes regarding ocean transport intermediaries (OTIs), said Ed Greenberg, general counsel of the National Customs Brokers and Forwarders Association of America (NCBFAA). The possible OTI rule changes could be a major change, adding new licensing and bonding requirements for forwarders, said Greenberg, who spoke at the NCBFAA conference April 9.
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The operating style of new FMC Chair Mario Cordero is largely unknown and how he addresses the changes to OTI rules will likely be a good indicator, said Greenberg. The previous FMC chairman, Richard Lidinsky, had a more direct style of management, and if Cordero will follow suit remains to be seen, he said. Lidinsky, recently stepped down as chairman, remains a commissioner (see 13040106). The recent addition of FMC Commissioner William Doyle (see 13013110) is another wild card, said Greenberg.
There are several potentially troubling aspects of possible OTI rule changes, said Greenberg, who has reviewed some parts of a notice of proposed rulemaking. Of concern are new requirements for forwarders and NVOCCs to renew their FMC licenses, something not required now, he said. The idea seems to be similar to CBP's broker requirements, but unlike the CBP requirements, the FMC's rules wouldn't be statutory, said Greenberg. “We have already advised them we don't think it's a good thing to do,” he said. The rules would also require foreign NVOCCs to file and renew information with the FMC, he said.
The proposed rules are also expected to increase bonding requirements, he said. Ocean forwarders bond requirements would increase to $75,000, NVOs would go up to $100,000 and a foreign registered NVOs' bond would be $200,000, said Greenberg. The rules would also eliminate the requirement for additional bonds in each of the branch offices, potentially reducing that bond numbers for some, he said. The FMC is concerned that the existing bond amounts aren't sufficient to satisfy any judgment, though there's no evidence that the bonds aren't sufficient, said Greenberg. There's also talk of establishing a priority system for collections against the bond, giving priority to shippers and then carriers and forwarders, he said.
The FMC is also considering rules on agents of licensed OTIs, he said. First, this would require all agents of the OTIs to have the name of the principal and license number on all shipping documents and advertising they issue, he said. The advertising part may be especially difficult because an agent may represent numerous OTIs, he said. The rules would also make the OTIs responsible for the agents' advertising, said Greenberg. The motivation behind the OTI rule rewrite is largely unclear, but it may be related to an investigation into the movement of household goods (see 10121315), said Greenberg. It's also unclear when the proposal will be taken up at the agency, he said. The NPRM was removed from the agenda at open meetings previously and the agency may now instead take up individual parts of the rulemaking separately, he said. -- Tim Warren