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FMC Adds to Investigations and Enforcement Under Shipping Reform Act

regulatory reform FMC Ocean Shipping Act
FMC is moving quickly to fulfill Congress' mandate under the 2022 Reform Act (file photo)

Published Jul 29, 2022 4:53 PM by The Maritime Executive

The U.S. Federal Maritime Commission highlighted that it is moving quickly to implement the Ocean Shipping Record Act of 2022. In the less than two months since it was signed into law, the FMC has already taken key steps including today announcing the formation of a newly created Bureau of Enforcement, Investigations, and Compliance as the best means to quickly fulfill the mandate placed on the FMC by Congress.

“Robust enforcement of the Shipping Act is absolutely key to the effectiveness of the Federal Maritime Commission,” said Chairman Daniel B. Maffei. “This reorganization has the support of all five commissioners and creates a structure better suited to meeting the mandate the President and Congress have given this agency to prioritize enforcement. Specifically, it enhances FMC’s capacity to closely scrutinize the conduct of the ocean carrier companies and marine terminal operators to ensure compliance with the law and fairness for American importers and exporters.” 

The newly created Bureau of Enforcement, Investigations, and Compliance will be divided into three sections and headed by an attorney in the Senior Executive Service with regulatory, prosecutorial, and investigatory experience. The commission’s Managing Director, Lucille M. Marvin, will also serve as Acting Director until a permanent Director is hired. The sections of the new arm of the FMC include the Office of Enforcement, the Office of Investigations, and the Office of Compliance.

Maffei highlighted that the reorganization was initiated following an internal examination undertaken to identify how to increase the effectiveness of commission enforcement and compliance activities.  Among the other steps they will be taking will increase the number of investigators it has on staff, and the investigators will now focus exclusively on enforcement activity. 

“Rarely does the Congress give an agency a specific to-do list, but here the Congress provided us with explicit tasks with timelines intended to help solve some of the nation’s supply-chain challenges,” said Maffei. “These are important initiatives that will make a difference to people who depend on the movement of ocean cargo. Our job is to implement it and we are well along the way in doing so.”

In addition to the new bureau, the FMC highlighted that its most immediate deadline is initiating and completing a rulemaking on unreasonable refusal to deal or negotiate on vessel space accommodations.  Commission staff initiated this rulemaking effort, including internal discussions to deliberate on policy choices and proposed text, in advance of publishing a proposed rule for public comment. The commission reports it is on track to have a final rule in effect by the statutorily mandated deadline of December 2022.

Other efforts have established an interim process for submitting charge complaints, while notices have alerted the trade to self-executing provisions of OSRA that went into effect immediately and notices regarding the changes required for detention and demurrage billing practices. The FMC continues to work toward implementing other provisions of the law.

Internationally, the FMC’s actions and the elements contained in the act are providing fresh impetuous for new calls for additional oversight and reform of regulations for the industry. A coalition representing European shippers and ports called this week on the EU Commission for enhancements to their current competition regulations for carriers. Reports indicate that the EU has decided to proceed with a review while regulators in other parts of the globe continue their increased oversight of the business practices of the carriers.