2016 IAM Regional Meeting: Industry Compliance Issues in 2016

Brian Limperopulos IAM Director of Programs

Container Weight Verification U.S. Federal Maritime Commission (FMC) Regulations Changes to EU Import Laws Agenda

Changes to the Safety of Life at Sea (SOLAS) Treaty by the International Maritime Organization (IMO) effective July 1 st, 2016 Goal of this change: Lessen the number of accidents caused by incorrectly weighed and mis-declared container weights SOLAS Changes for Weight Verification

Compliance is Shippers’ Responsibility  Who is the Shipper? – The person who enters into the contract of carriage with the ship owner, and whose name appears on the bill of lading or the transport document. (meaning not the ship owner)  The transport document must:  contain the verified gross mass (VGM)  be signed by a person authorized by the shipper  be submitted to the terminal representative sufficiently in advance

How Will It Be Done? World Shipping Council (WSC): “The master or his representative and the terminal representative [must] have obtained, in advance of vessel loading, the verified actual gross mass of the container” or the container will not be loaded.

Source: Journal of Commerce

When To Provide VGM?  The provisions in the updated SOLAS state that the shipping document must be submitted to the terminal representative, “in advance”  Shippers will need to obtain information on documentary cut-off times from their carriers in advance of shipment.

Enforcement and Penalties National Level  Fines and other penalties may be imposed under specific national legislation or regulation.  Enforcement agencies may implement measures to ensure compliance, which could include documentation checks, auditing, or random weighing Commercial Level  Penalties may involve:  repacking costs  administration fees for amending documents  demurrage charges  delayed or cancelled shipments

International Response  At this time, the US Coast Guard does not intend to engage in rulemaking procedures to enforce any action on a shipper.  Maersk Line is attempting to work with shippers, vendors, and industry parties to “develop a good solution for Verified Gross Mass in each country”.  Germany proposed using the second method of accurate container weight verification  UK enforcement body, the Maritime & Coastguard Agency, has said that the port industry does not have the weighing equipment to use the first method of weight verification

Widespread Confusion “Shippers around the world are currently unaware as to how IMO Member States will implement the SOLAS amendment, how the new requirements will be enforced, who will be enforcing them, the associated penalties and other relevant requirements…” Letter written to the IMO from the Global Consolidator’s Group (GCG) on February 28, 2016

Current Federal Maritime Commission (FMC) Licensing Requirements

FMC Ocean Transportation Intermediary (OTI) Licensing Companies who offer moving services to or from the US must be licensed or registered as NVOCCs with the FMC. All NVOCCs must be bonded Non-US entities must register and obtain a $150,000 USD bond to comply with FMC Regulation

License or Registration Exceptions  Shippers whose primary business is the sale of merchandise  Vessel Operators that perform FF Services for cargo under their own B/L  Ocean Freight Brokers  Entities that exclusively transport HHGs for US military or federal civilian executive agencies  Agents, employees, or branch offices of a licensed OTI

Penalties for Non-Compliance  BAR was fined $80,000 USD for not being properly licensed  FMC recently collected $334,000 USD in fines  IAM anticipates that additional enforcement actions are imminent.

Changes to EU Import Procedures

Changes in European Import Procedures Background  Previous law allowed companies receiving household goods into the EU to clear containers where they landed rather than their final destination  Currently, the United Kingdom has the simplest customs clearance process for Transfer of Residence shipments in the EU Benefits to the current system  Lower costs for shipments  Shorter transit times  Higher volume shipments due to simple systems

Changes beginning May 1 st, 2016  The UK Customs authority will no longer be able to provide Transfer of Residence approval for natural persons relocating to a territory of a different member state. What this means:  Shipments may have to be imported directly into the EU Member State where final delivery will take place  Starting in May, household goods must be cleared in their destination country. Changes in European Import Procedures

What can you do?  Shipment may still be imported but not cleared in the UK  a local moving agent  Cleared separately and delivered later Effects of these changes:  Rise in transport costs  Extended transit times  Decline in volumes Changes in European Import Procedures

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