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FMC Hikes Maximum Penalties & Issues Proposed Service Contract Rule

The Federal Maritime Commission has increased the maximum penalties assessed for statutory violations effective January 15, 2021, as required by the Federal Civil Penalties Inflation Adjustment Act of 2015. The increases are tied to the rate of inflation. Maximum penalties for knowing and willful violations of the Shipping Act increased to $61,820, from $61,098; and, maximum penalties for violations that are not knowing and willful increased to $12,363 from $12,219. The Commission also increased the fees for 9 other penalties. The complete list of penalties is published in the Federal Register and on the Commission’s website.

Proposed Rule on Service Contract Relief

The FMC issued a Notice of Proposed Rulemaking (NPRM) that, if adopted, will permit ocean carriers to file original service contracts at the agency up to 30 days after going into effect.

Members of the public have until March 4, 2021 to file comments in response to this NPRM. The Commission will consider all public comments before voting on final regulatory actions.

Current FMC regulations require the filing of initial service contracts with the FMC before an ocean carrier is permitted to receive and move cargo under the terms of that contract. Amendments to previously filed service contracts may be filed up to thirty days following the commercial effective date of the amendment. Following an April 2020 Commission vote that addressed COVID related impacts to the supply chain, the Commission granted temporary regulatory relief that allowed ocean carriers to file initial service contracts up to 30 days after contract terms had been agreed to.

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