A giant shipping line has reached a compromise agreement with the US Federal Maritime Commission (FMC) to pay $1.9m in civil penalties. Specifically, the Commission completed a compromise agreement recovering $1.9m in civil penalties from a vessel-operating common carrier (VOCC) that operates in the U.S.-foreign trades and globally.

The compromise agreement resolved allegations that the carrier violated the Shipping Act by assessing detention charges pursuant to its service contract and tariffs against third parties who had not consented to be bound by the terms of the company’s bills of lading, service contracts, or tariffs.

The shipping line agreed to terminate this practice and ensure future compliance by amending its U.S. tariff rules to limit the definition of merchant in its bills of lading to shippers, consignees, and persons with a beneficial interest in the cargo as defined by Commission regulations at 46 C.F.R. § 515.2(b).

Furthermore, it agreed that, in addition to paying a civil penalty, it will also issue refunds and waivers to impacted third parties.

The carrier compromised and agreed to the payment of a civil penalty but did not admit to violations of the Shipping Act or Commission regulations.

Penalty payments are deposited into the U.S. General Fund of the United States. The Federal Maritime Commission receives no portion of these payments.

It’s worth mentioning that the Commission investigates potential violations of the Shipping Act and Commission regulations and negotiates settlements and informal compromises of civil penalties in relation to those potential violations.