Contacts: Geoffrey C. Powell @ (410) 609-2580                                      For Immediate Release
                     Jon Kent @ (202) 223-6222


NCBFAA Vice President Testifies on FMC Proposal
before House Subcommittee


WASHINGTON, DC: In testimony before the U.S. House Subcommittee on Coast Guard and Maritime Transportation, National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) Vice President Geoffrey C. Powell criticized the Federal Maritime Commission’s (FMC) recent proposal to regulate Ocean Transportation Intermediaries (OTIs) as “inconsistent with the important goals of job creation, improving the national economy, and reducing – not increasing – the burdens of unnecessary regulation.”

This rulemaking resulted from an investigation of the “barrel trade” involving the movement of household goods for individuals. However, the FMC’s proposal focuses on an unrelated issue, the movement of commercial cargo by OTIs. According to Vice President Powell,” [this FMC initiative] would – if implemented – significantly increase unnecessary burdens and expense on OTIs, raise significant due process concerns and create needless administrative burdens on the agency’s own staff.”

Although the proposition raises a myriad of issues, the NCBFAA finds three areas to be more problematic than the others. The unjustified imposition of two-year licenses that require biennial renewals will be burdensome, time-consuming and expensive. The FMC’s insistence that the provision will enable it to keep its data current ignores “the FMC’s existing regulations that ALREADY require that those changes must be provided to the FMC as they occur.” Besides it already takes the FMC two to three months to process licenses, “adding this additional renewal requirement would inundate FMC staff and grind the entire process to a halt.”

“A fundamental flaw in the Commission’s rulemaking process was its failure to meet with the industry,” Vice President Powell testified, “in order to identify and then find solutions that are the least burdensome.”

“Secondly, without any apparent supporting rationale, the proposal also authorizes suspension or revocation of a license in terms that are vague, overbroad and, in some instances, unreasonable,” he continued. “In a related vein, the proposed regulations establish procedures for license revocations which raise due process concerns and are contrary to the U.S. Constitution and the Administrative Procedure Act,” Vice President Powell said. “The proposal provides for no right of discovery, no apparent right to a hearing, no right to cross-examine witnesses, and no right of appeal from the decision of the designated hearing officer.”

Finally, the FMC proposes to significantly increase ocean forwarder and NVOCC bonds, although the amounts cited would be insufficient to cover the outstanding claims for the two instances that gave rise to the proposal. Thus, the proposed increase would not dramatically increase any potential claimant’s level of protection.

“Regrettably, the Commission has failed to exercise good judgment in these proposed regulations,” he concluded. “For these reasons, the Association respectfully requests that this Subcommittee require that the FMC explain why it is proceeding along this path.”

Headquartered in Washington, DC, the NCBFAA represents more than 870 member companies with 100,000 employees in international trade - the nation's leading freight forwarders, customs brokers, ocean transportation intermediaries (OTIs), NVOCCs and air cargo agents, serving more than 250,000 importers and exporters. Established in 1897 in New York, NCBFAA is the effective national voice of the industry. Through its various committees, counsel and representatives, the Association maintains a close watch over legislative and regulatory issues that affect its members. It keeps them informed of these and other related issues through its weekly Monday Morning eBriefing, and various meetings and conferences throughout the year.

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