03/27/2023
WASHINGTON — A new rule requiring ocean carriers to refund importers and exporters for illegal overcharges and potentially for other violations of the U.S. Shipping Act will go into effect next month.
The changes, set out in a final rule scheduled to be published by the Federal Maritime Commission on Monday, are in the form of amendments to the FMC’s Rules of Practice and Procedure governing the assessment and collection of civil penalties. They codify provisions included in the Ocean Shipping Reform Act (OSRA) of 2022. FMC’s rule explains that before OSRA 2022, any person violating the Shipping Act — or a regulation or order of the FMC issued under that law — is liable for a civil penalty.
OSRA 2022, however, changed the language in the Shipping Act governing potential liability of a violator by adding the phrase “or, in addition to or in lieu of a civil penalty, is liable for the refund of a charge.”
Accordingly, the rule states that “the commission may now order that a person is liable for ‘a civil penalty or, in addition to or in lieu of a civil penalty, is liable for the refund of a charge’ for any violation of the Shipping Act, commission regulations, or commission order.”
Customer refunds are also included in a new provision enacted by OSRA 2022 — section 4130 — that addresses the issue of charge complaints, such as inappropriately charging or overcharging for demurrage and detention.
“That provision specifies, among other things, that upon a finding by the commission that a carrier’s charges do not comply with the Shipping Act, the commission shall promptly order the refund of those charges paid,” the rule states.
Carriers now risk having to pay refunds to customers not only if invoices contain inaccurate information, but also if they do not include the following minimum information, as determined by the FMC:
Date that container is made available.
Port of discharge.
Container number.
Earliest return date (for export containers).
Number of allowed free-time days for holding containers.
Free time start and end dates.
Applicable detention or demurrage rule on which the daily rate is based.
Applicable rate or rates per the applicable rule.
Total amount due.
Contact information for questions or requests for mitigation of fees.
Statement that the charges are consistent with any of FMC rules with respect to detention and demurrage.
Statement that the common carrier’s performance did not cause or contribute to the underlying invoiced charges.
According to OSRA 2022, in determining the amount of a civil penalty or money refund to be paid by the carrier, the FMC will consider:
The nature, circumstances, extent and gravity of the violation committed.
The degree of culpability, history of prior offenses and the ability to pay.
The amount of any additional money to be paid by the carrier as ordered by the FMC.
