Controlled Carriers Under the Shipping Act of 1984

AGENCY:

Federal Maritime Commission.

ACTION:

Notice.

SUMMARY:

The Federal Maritime Commission is publishing an updated list of controlled carriers, i.e., ocean common carriers operating in U.S.-foreign trades that are, or whose operating assets are, directly or indirectly owned or controlled by foreign governments. Such carriers are subject to increased regulatory oversight by the Commission.

FOR FURTHER INFORMATION CONTACT:

David Eng, Secretary; Phone: (202) 523-5725; Email: secretary@fmc.gov.

SUPPLEMENTARY INFORMATION:

The Federal Maritime Commission is updating the list of controlled carriers to add an entity that qualifies as a controlled carrier. The Shipping Act of 1984, as amended (Shipping Act), defines a “controlled carrier” as an ocean common carrier that is, or whose operating assets are, directly or indirectly owned or controlled by a government. 46 U.S.C. 40102(9). Ownership or control by a government is deemed to exist for a carrier if (1) a majority of the interest in the carrier is owned or controlled in any manner by that government, an agency of that government, or a public or private person controlled by that government, or (2) that government has the right to appoint or disapprove the appointment of a majority of the directors, the chief operating officer, or the chief executive officer of the carrier. Id.; 46 CFR 565.2(a).

As required by the Shipping Act, controlled carriers are subject to enhanced oversight by the Commission. For example, 46 U.S.C. 40701(b) provides that the Commission may, after providing notice and opportunity for a hearing, prohibit the publication or use of a rate, charge, classification, rule, or regulation that a controlled carrier has failed to demonstrate is just and reasonable. See46 U.S.C. 40701(b). In addition, 46 U.S.C. 40502(f) provides that in an action for a breach of a service contract, the dispute resolution forum cannot in any way be controlled by or affiliated with a controlled carrier or by the government that owns or controls the carrier. See46 U.S.C. 40502(f). Congress enacted these protections to ensure that controlled carriers, whose marketplace decision making can be influenced by foreign governmental priorities or by their access to non-market sources of capital, do not engage in unreasonable below-market pricing practices which could disrupt trade or harm privately-owned shipping companies.

The controlled carrier list is not a comprehensive list of foreign-owned or controlled ships or ship owners; rather, it is only a list of ocean common carriers that are controlled by governments. See46 U.S.C. 40102(9). Thus, tramp operators and other non-common carriers are not included, nor are non-vessel-operating common carriers, regardless of their ownership or control.

The controlled carrier list was last updated on February 27, 2024. See89 FR 14495. This notice revises the list to add HMM as a controlled carrier of the government of the Republic of Korea. It is also noted that the United States and the Republic of Korea signed a Treaty of Friendship, Commerce and Navigation that entered into force on November 7, 1957. As such, HMM is entitled to the exception at 46 U.S.C. 40706(1), which exempts it from the requirements of Title 46, Chapter 407, but not from the provisions of 46 U.S.C. 40502(f) and 46 U.S.C. 46106(b)(7).

There are no changes to report with respect to the remaining controlled carriers on the list.

It is requested that any other information regarding possible omissions or inaccuracies in this list be provided to the Commission's Office of the General Counsel at generalcounsel@fmc.gov. See46 CFR 501.12.

The amended list of currently classified controlled carriers and their corresponding Commission-issued Registered Persons Index numbers is set forth below:

(1) COSCO SHIPPING Lines Co., Ltd. (RPI No. 015614)—People's Republic of China;

(2) Orient Overseas Container Line Limited (RPI No. 011398)—People's Republic of China;

(3) OOCL (Europe) Limited (RPI No. 024786)—People's Republic of China;

(4) Hede (HONGKONG) International Shipping Limited (RPI No. 033332)—People's Republic of China;

(5) HMM (RPI No. 001452)—Republic of Korea.