FMC Issues Final Rule Regarding Freight Forwarder And NVOCC Requirements

J. Michael Cavanaugh is a Partner and Eric Lee is an Associate in Holland & Knight's Washington D.C. office

The U.S. Federal Maritime Commission (FMC) issued its Final Rule in FMC Docket 13-05 on Nov. 3, 2015. The Commission's October vote in favor of issuing the Final Rule concluded a multiyear review and rulemaking that largely focused on 46 CFR Part 515.

Part 515 primarily provides the regulations governing freight forwarders, non-vessel operating common carriers (NVOCC) - U.S. or non-U.S. based - and other aspects of the ocean transportation intermediary (OTI) business. The full text of the FMC Docket 13-05 Final Rule is quite comprehensive. With the exception of the license renewal amendments, the OTI rule changes are effective Dec. 9, 2015.

Key Changes for Freight Forwarders and NVOCCs

Revised Section 515.2(h): "[F]reight forwarding services" are redefined in broader terms, so they now include "[p]reparing and/or processing export documents, including the required 'electronic export information'" and "[p]reparing and/or processing common carrier bills of lading or other shipping documents," which is an expansion by way of "common carrier" and "or other shipping documents." Revised Section 515.2(k): "[N]on-vessel operating common carrier services" now include issuing "other shipping documents" and it no longer matters whether the issuance is "equivalent" to a bill of lading. Revised Section 515.2(o): "[P]rincipal" is redefined to delete the introductory clause that referenced financial responsibility forms. New Section 515.2(r): "[R]egistered non-vessel-operating common carrier" is a new term with a new definition ("Registered NVOCC"). A Registered NVOCC is an NVOCC located outside the United States that elects not to become licensed as an NVOCC but registers with the Commission as provided in §515.19, posts a bond or other surety, and publishes a tariff. Revised Section 515.4: The FMC removed the additional financial requirements imposed on OTIs for each branch office by specifically deleting the requirements of Section 515.4(b)(1)(ii) and making corresponding changes in Section 515.21(a). Revised Section 515.11(a)(2): The FMC also changed the current OTI licensing requirements. Now, the Commission may clearly consider violations of any shipping or international trade laws, operating as an OTI without a license or registration, state and federal felonies and misdemeanors, bankruptcies, tax liens, judgments and proceedings, immigration...

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