Фото: VesselFinder
Concerns of the second Trump administration pulling punches when it came to administering the Federal Maritime Commission (FMC) appear to have been strongly disproved, with the regulator threatening Cosco with a $16.7m penalty if it fails to pay its outstanding fine.
To make it even more apparent that the Laura DiBella-chaired commission is serious in its pledge to level the playing field between US shippers and the global container sector, the initial fine, issued in January, was a mere $24,328.
With the fine unpaid, the FMC released a letter, attributed to Ms DiBella, stating: “A respondent appears to have persistently failed to comply with a final reparations order for many months after the date fixed by the commission for payment.
“The commission is empowered to impose civil penalties for non-payment of a reparations award,” it said, adding that each day of “continuing violation” empowered the FMC to impose a penalty of $5,000 per violation, or $25,000 where the violation was “wilful and knowing”.
With the regulations also allowing penalties to be adjusted in line with annual inflation, it means the amounts presently “stand at $14,988 and $74,943”, said the FMC – Cosco’s failure to pay could mean a total between $3.3m and $16.7m if the commission considers the nonpayment “wilful”.
And that amount – which equates to more than 600 times the original fine – set to rise further for each day the Chinese carrier declines to settle its original debt, the final total could be monstrously high.
“Cosco was aware of its obligations, and apparent facts that have come to the FMC’s attention indicate it was reminded extensively for months about its non-payment, yet it appears to have been out of compliance with the commission’s order for 223 days,” the FMC said.
It added that this “raises the question whether these potential violations of the statute were knowing and wilful”.
As has become part and parcel of FMC reality since the passage of the Ocean Reforms Act under the Biden administration, Cosco was initially fined over improper invoicing relating to detention and demurrage (D&D) practices.
But at a little over $24,000, the fine for Cosco was fairly paltry – consider the amount MSC was told to repay at the start of this year, in excess of $22m over its D&D practices – which indicates Ms DiBella and the commission’s willingness to use its powers.
This latest development follows news at the end of September that the FMC was lifting its three-year statute of limitations on charge complaints relating to fees assessed on or after 16 June 2022 – leaving carriers exposed to claims that might otherwise have been time-barred.
The FMC dcision to go after Cosco offers further evidence that the Trump administration is less keen on bowing to corporate interests than had been expected – at least when those interests are not waving an American flag.
The concerns had been real, with question marks hovering around Ms DiBella’s appointment. Those active in the sector – particularly at SME level – had been desperate for signs that she may follow through on the appetite to punish carriers for Covid-era practices.
Источники сообщили Лодстар repeatedly that giving the FMC “teeth”, and it using them, would likely bolster smaller shippers’ determination to pursue the excessive “and egregious” amounts they were charged during the pandemic.
Furthermore, it may allay their concerns about the costs involved in legal action, one litigator telling Лодстар SMEs had been forced to make a calculation when it came to the FMC as the cost of bringing a claim was often more than what they were likely to recoup.