1. Final Rule on OTI Licenses - Docket 13-05 NCBFAA Conference, Tucson AZ – April 19, 2016

2. FINAL RULE – Docket 13-05 amends 46 C.F.R. Part 515 Federal Register November 5, 2015 – Docket 13-05 Effective December 9, 2015 with the exception of 515.14(c) and (d) which are scheduled to be effective December 9, 2016 515.14(c) Duration of License. 515.14(d) License renewal process.

3. Summary of Changes 46 C.F.R. Part 515 Definitions; Renewal of licenses every three years; Expedited hearing process for license denials, revocations or suspensions; Appeal decisions to the Commission

4. Definitions 46 C.F.R. Part 515 Added or Changed - Services – Freight Forwarding and NVOCC; Registered NVOCC; Person; Principal; Qualifying Individual; Deleted – Ocean freight broker – 515.2(n) Brokerage – 515.2(d) Small shipment – 515.2(u)

5. Definitions: Services – Freight Forwarding 515.2(h) and NVOCC 515.2(k) Ocean Freight Forwarding (OFF) Services and NVOCC Services are revised to better reflect current practices such as OFF services include preparation of “export documents, including required electronic export information” OFF and NVOCC services are both revised to include preparation of ocean common carrier and NVOCC bills of lading “or other shipping documents”.

6. Definition: Registered NVOCC 515.3 Terminology replacing the use of “unlicensed NVOCC”. Must use licensed OTIs as their agents in the United States with respect to OTI services performed in the U.S.

7. Definition: Person 515.2 (n) Person includes individuals, corporations, companies, including limited liability companies, associations, firms, partnerships, societies and joint stock companies existing under or authorized by the laws of the United States or of a foreign country.

8. Definition: Principal 515.2 (o) Except as used in Surety Bond Form FMC-48, and Group Bond Form FMC-69, Refers to the shipper, consignee, seller, or purchaser of property, and to anyone acting on behalf of such shipper, consignee, seller, or purchaser of property, who employs the services of a licensed freight forwarder to facilitate the ocean transportation of such property. NOTE: Industry comments resulted in the definition remaining substantially unchanged.

9. Definition: Qualifying Individual 515.2(p) (QI) means an individual who meets the experience and character requirements of section 19 of the Shipping Act and this part. The QI must meet those requirements at the time a license is issued and must thereafter maintain the necessary character. The OTI must timely replace the QI, as provided by Commission rules, when the designated QI ceases to act as the QI, whether by resignation, retirement or death. NOTE: QI was not previously a defined term.

10. LICENSE RENEWAL 515.14(c) Duration of license. Licenses shall be issued for an initial period of three (3) years. Thereafter, licenses will be renewed for sequential three year periods upon successful completion of the renewal process in paragraph (d) of this section. 515.14(d) License renewal process. (1) The licensee shall submit electronically to the Director of BCL a completed Application for Renewal of OTI License no later than sixty (60) days prior to the renewal date set forth on its license. Upon successful completion of the renewal process, the Commission shall issue a new license bearing a renewal date three (3) years later on the same day and month

11. LICENSE RENEWAL. What to expect… Commences on December 9, 2016 only when the necessary programming of the Commission’s computer systems has been completed and tested so that the on- line processing can be reliably activated. Phased-in over a three year period The Commission is considering various methodologies FMCSA uses the last and second to last digit in the license number to determine the month and year of renewal Notification will be given to the OTI, Sureties, & Tariff Publishers to ensure the OTI community is aware of the timing and requirements.

12. Under Consideration…… similar to FMCSA Next to Last Digit of FMC License Renewal Year 1,2,32017202020232026202920322035 4.5.62018202120242027203020332036 7,8,9,02019202220252028203120342037 FMC License number ending in: Must file by last day of: 1January 2February 3March 4April 5May 6June 7July 8August 9September 0October The FMC website will have the renewal schedule & the OTI list with the specific renewal date for each OTI

13. LICENSE RENEWAL The automated system will be easy-to-use with pre- populated fields. The licensee will need only to change the fields that need updating. Where the renewal process identifies changes in the licensee’s information necessitating separate Commission approval, the license will remain in effect. There will be no charge for a renewal, however, there will continue to be a fee for other changes such as a license transfer, a business structure change, a name change, the replacement of the qualifying individual or the addition of NVOCC or Freight Forwarder to an existing license. Renewal does not require re-qualification.

14. Expedited Hearing Process Section 515.17 – Hearing Procedures governing; denial, revocation, or suspension of OTI licenses. This section streamlines appeal procedures for denial of OTI license applications and for revocation or suspension of licenses. OTI submits request for hearing to the Secretary. The Secretary designates a hearing officer. The Hearing officer notifies BCL BCL provides the hearing officer and OTI a copy of the original notice and a copy of BCL materials supporting the notice. The hearing officer advises OTI they have the right to submit information within 30 days. BCL can provide responsive materials within 20 days after the OTIs materials were received. The hearing officer’s decision must be issued within 40 days. The new procedure will take approximately 115 days, which is significantly shorter than a show cause order.

15. Appeal decisions to the OTIs are not disadvantaged by the new procedures as they protect OTIs’ due process rights at all stages. Section 515.17(c) provides that OTIs and applicants may seek Commission review of the hearing officer’s adverse decision pursuant to 46 CFR 502.227.

16. Other Considerations Bond riders are no longer required for unincorporated branch offices – bond amounts are $50,000 for freight forwarders and $75,000 for NVOCCs. An OTI is responsible for the actions of their designated Agent. A Foreign Registered NVOCC must have a licensed OTI as their Agent in the United States.

17. Questions? Cliff Johnson Bureau of Certification and Licensing Federal Maritime Commission cjohnson@fmc.gov (202)523-3960