Actions to Adjust or Meet Conditions Unfavorable to Shipping in the United States/Korea Trade

FEDERAL MARITIME COMMISSION

46 CFR Part 586

[Docket No. 91-24]

Actions to Adjust or Meet Conditions Unfavorable to Shipping in

the United States/Korea Trade

AGENCY: Federal Maritime Commission.

ACTION: Withdrawal of final rule; Discontinuance of proceeding.

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SUMMARY: The Federal Maritime Commission is withdrawing its November

13, 1992, final rule which found that unfavorable conditions existed in

the oceanborne trade between the United States and Korea, which

precluded U.S. carriers from engaging in trucking activities in Korea.

That rule imposed fees on Korean-flag vessels in the amount of $100,000

per voyage, but suspended the sanctions until June 1, 1994. The

Commission has since reviewed the progress achieved by the Government

of Korea in implementing commitments to remove the restrictions.

Inasmuch as reports from affected U.S. and Korean carriers confirm that

the impediments at issue have been removed, and all the carriers

recommend termination of the proceeding, there is no reason to continue

the proceeding or to assess fees.

EFFECTIVE DATE: May 19, 1994.

FOR FURTHER INFORMATION CONTACT: Robert D. Bourgoin, General Counsel,

Federal Maritime Commission, 800 North Capitol Street, NW., Washington,

DC 20573, (202) 523-5740.

SUPPLEMENTARY INFORMATION: This proceeding under section 19(1)(b) of

the Merchant Marine Act, 1920, 46 U.S.C. app. 876(1)(b) (``Section

19''), was initiated by the Federal Maritime Commission

(``Commission'') on June 7, 1991 (56 FR 26361), by Notice of Proposed

Rulemaking (``Proposed Rule''). The Proposed Rule raised issues

concerning apparent Government of Korea (``ROK'') restrictions on U.S.

carriers' ability to engage in trucking operations and to contract

directly for rail service in Korea incidental to intermodal commerce in

the United States/Korea trade (``Trade''). It proposed sanctions

consisting of $100,000 per voyage fees on vessels in the Trade operated

by Korean-flag carriers Hanjin Shipping Co., Ltd. and Hyundai Merchant

Marine Co., Ltd. (collectively, ``Korean Carriers'').

On the basis of comments on the Proposed Rule and several

supplemental submissions received thereafter from the Korean Carriers

and the affected U.S. carriers, Sea-Land Service, Inc. and American

President Lines, Ltd. (collectively, ``U.S. Carriers''), the Commission

published a final rule on November 18, 1992 (57 FR 54318). The final

rule found that unfavorable conditions existed in the Trade by virtue

of ROK restrictions on U.S. carriers' trucking activities. It imposed

the sanctions cited in the Proposed Rule, but suspended them until June

1, 1994, noting commitments made by the ROK in the course of bilateral

inter-governmental discussions in the summer of 1992. The suspension,

the Commission explained, would allow time for the ROK to implement the

promised changes.

In the meantime, the Commission directed that the U.S. and Korean

Carriers, including Cho Yang Shipping Co., Ltd., which was added to the

list of Korean Carriers, submit periodic reports to the Commission

regarding the ROK's implementation of its commitments. Although the

finding of unfavorable conditions was limited to the trucking issue,

the Commission directed the carriers to report as well on ROK

restrictions on rail access by the U.S. Carriers. The parties were

ordered to address enumerated issues in submissions due December 15,

1992; May 1, 1993; November 1, 1993; and May 1, 1994.

Over the course of the reporting period, the Commission was advised

that the ROK made considerable changes in its regulations and policies,

with the effect of remedying the conditions in issue. Effective May 10,

1993, regulations were amended to enable U.S. carriers to issue Bonded

Rail Transportation Permits without the need for a trucking license.

Vehicle ownership requirements for obtaining Simplified Bonded

Transportation Permits were substantially reduced. The carriers also

indicated that the ROK adhered to its promised regionally-keyed

timetable for issuing trucking licenses. All limitations on U.S.

carrier trucking operations were reportedly removed as of April 1,

1994. All five carriers, U.S. and Korean, advise that the conditions on

which the final rule is based no longer exist, and that the

Commission's objectives in this proceeding have been met.

The Commission is satisfied that there is no longer a basis for

continuing this proceeding. The final rule is accordingly withdrawn and

the proceeding discontinued.

List of Subjects in 46 CFR Part 586

Ecuador, Korea, Maritime carriers.

Therefore, part 586 of title 46 CFR is amended as follows:

1. The authority citation for part 586 continues to read as

follows:

Authority: 46 U.S.C. app. 876(1)(b); 46 U.S.C. app. 876(5)

through (12); 46 CFR Part 585; Reorganization Plan No. 7 of 1961, 26

FR 7315 (August 12, 1961).

Sec. 586.5 [Removed]

2. Section 586.5 is removed.

By the Commission.

Joseph C. Polking,

Secretary.

[FR Doc. 94-12164 Filed 5-18-94; 8:45 am]

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