Fishermen's Protective Act Guaranty Fund Procedures

DEPARTMENT OF STATE

22 CFR Part 33

[Public Notice 2425]

Fishermen's Protective Act Guaranty Fund Procedures

AGENCY: Department of State.

ACTION: Direct final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of State issues this direct final rule to

revise the administration of the Fishermen's Guaranty Fund under

section 7 of the Fishermen's Protective Act of 1967, as amended (the

Act). These revisions are made in partial fulfillment of the

Department's commitment that certain regulations would be modified or

eliminated as part of the President's Regulatory Reinvention

Initiative. The revisions are also need to reflect the recent

reauthorization of the Fishermen's Guaranty Fund, as well as amendments

related to fees charged for participation the Guaranty Fund, and to

reflect changes in the criteria for claims to be eligible for

compensation under the Act.

This revision provides a single set of guidelines for compensation.

EFFECTIVE DATE: This action is effective January 23, 1997, unless

notice is received on or before November 25, 1996 that adverse or

critical comments will be submitted. If the effective date is delayed,

timely notice will be published in the Federal Register.

ADDRESSES: Send comments to Bureau of Oceans and International

Environmental and Scientific Affairs, Office of Marine Conservation,

Room 7820, U.S. Department of State, Washington, DC 20520-7818.

FOR FURTHER INFORMATION CONTACT:

Stetson Tinkham, Office of Marine Conservation, (202) 647-3941.

SUPPLEMENTARY INFORMATION: Section 7 of the Act established the

Guaranty Fund, and Section 408 of Public Law 99-659, November 14, 1986,

transferred the administration of the Fund from the Department of

Commerce to the Department of State, effective October 1, 1986. The

Fishermen's Guaranty Fund regulations formerly appeared as Department

of Commerce regulations at 50 CFR Part 258.

The Guaranty Fund compensates U.S. fishing vessel owners who have

entered into guaranty agreements for certain losses caused by the

seizure and detention of their vessels by foreign countries. Losses

covered by the Guaranty Fund include: confiscation, spoilage, damage,

lost fishing time, and other incidental costs. Fees for these

agreements historically have paid about 60 percent of claims; about 40

percent of claims have been paid from direct appropriations. To

implement this rule, the Department of State does not intend to seek

annual direct appropriations, but will operate the Fund based on fees

collected from participants and on funds which remain available from

prior year balances. A separate fee notice will be published for each

fiscal year. This direct final rule clarifies the procedure for

submission of claims, the processing of guaranty agreement

applications, and the computations involved in adjudicating those

claims.

The Secretary of State also administers a separate program, the

Fishermen's Protective Fund, under Section 3 of the Act. Under the

Fishermen's Protective Fund, vessel owners may apply for reimbursement

of fines, license fees, registration fees, or any other direct charge

imposed by a foreign country to secure the release of a seized vessel.

Claims under the Protective Fund are paid from direct appropriations.

The publication of this Department of State direct final rule was

delayed pending reauthorization of the Fishermen's Guaranty Fund

program. Title IV of Public Law 104-43 amended and reauthorized the

program on November 3, 1995. Other legislative changes, such as the

change in the U.S. position on the international law respecting highly

migratory species, effective upon the President's signing of Public Law

101-627, and other measures in Public Law 104-43 dealing with high seas

fishing have been taken into account in this direct final rule.

The method of computing compensation of lost fishing time is

standardized. Depreciated replacement cost is made the standard

compensation basis for capital equipment other than vessels. The

standard compensation basis for vessels remains market value.

This rule will be open for public comment for a period of sixty

(60) days following publication. Unless adverse comment is received

within that period, the rule will become final thirty days after the

publication of a separate ``confirmation notice'' at the close of the

comment period. That confirmation notice will be accompanied by a

notice establishing the fee for participation in the Fishermen's

Guaranty Fund for FY 1997.

This action is not subject to Executive Order 12866 but has been

reviewed to ensure consistency with the overall policies and purposes

of that order. The action creates no unfunded mandates on State, local,

and tribal governments, or on the private sector, nor does it require

[[Page 49967]]

initial or a final regulatory flexibility analysis under the Regulatory

Flexibility Act.

The rule imposes no new collection of information requirements for

the purposes of the Paperwork Reduction Act. It continues existing

requirements which have been approved by the Office of Management and

Budget under Control Number 0648-0095.

This rule is being done as a direct final rule because the rule

involves changes to a program providing a claims benefit to certain

members of the public. These changes are designed to ease the process

of applying for these funds. We believe they will be non-controversial

and will not engender adverse comment. For these reasons, notice and

comment is not required under 5 U.S.C. 553(a)(2), and in any case that

good cause exists that notice and public procedures are unnecessary

under 5 U.S.C. 553(b)(3)(B). In order to provide some opportunity for

public input, however, we have chosen to use the direct final format

with a 60 day period for comment.

List of Subjects in 22 CFR Part 33

Administrative practice and procedure, Claims, Fisheries, Fishing

vessels, Penalties, Seizures and forfeitures.

22 CFR part 33 is revised to read as follows:

PART 33--FISHERMEN'S PROTECTIVE ACT GUARANTY FUND PROCEDURES UNDER

SECTION 7

Sec.

33.1 Purpose.

33.2 Definitions.

33.3 Eligibility.

33.4 Applications.

33.5 Guaranty Agreement.

33.6 Fees.

33.7 Conditions for claims.

33.8 Claim procedure.

33.9 Amount of award.

33.10 Payments.

33.11 Records.

33.12 Penalties.

Authority: 22 U.S.C. 1977.

Sec. 33.1 Purpose.

These rules clarify procedures for the administration of Section 7

of the Fishermen's Protective Act of 1967. Section 7 of the Act

establishes a Fishermen's Guaranty Fund to reimburse owners and

charterers of United States commercial fishing vessels for certain

losses and costs caused by the seizure and detention of their vessels

by foreign countries under certain claims to jurisdiction not

recognized by the United States.

Sec. 33.2 Definitions.

For the purpose of this part, the following terms mean:

Act. The Fishermen's Protective Act of 1967 (22 U.S.C. 1971 et

seq.).

Capital equipment. Equipment or other property which may be

depreciated for income tax purposes.

Depreciated replacement costs. The present replacement cost of

capital equipment after being depreciated on a straight line basis over

the equipment's depreciable life, which is standardized at ten years.

Downtime. The time a vessel normally would be in port or transiting

to and from the fishing grounds.

Expendable items. Any property, excluding that which may be

depreciated for income tax purposes, which is maintained in inventory

or expensed for tax purposes.

Fund. The Fishermen's Guaranty Fund established in the U.S.

Treasury under section 7(c) of the Act (22 U.S.C. 1977(c)).

Market value. The price property would command in a market, at the

time of property loss, assuming a seller willing to sell and buyer

willing to buy.

Other direct charge. Any levy which is imposed in addition to, or

in lieu of any fine, license fee, registration fee, or other charge.

Owner. The owner or charterer of a commercial fishing vessel.

Secretary. The Secretary of State or the designee of the Secretary

of State.

Seizure. Arrest of a fishing vessel by a foreign country for

allegedly illegal fishing.

U.S. fishing vessel. Any private vessel documented or certified

under the laws of the United States as a commercial fishing vessel.

Sec. 33.3 Eligibility.

Any owner or charterer of a U.S. fishing vessel is eligible to

apply for an agreement with the Secretary providing for a guarantee in

accordance with section 7 of the Act.

Sec. 33.4 Applications.

(a) Applicant. An eligible applicant for a guaranty agreement must:

(1) Own or charter a U.S. fishing vessel; and

(2) Submit with his application the fee specified in Sec. 33.6

below.

(b) Applicaton forms. Application forms may be obtained by

contacting the Office of Marine Conservation, Bureau of Oceans and

International Environmental and Scientific Affairs, Room 7820, U.S.

Department of State, Washington, DC 20520-7818; Telephone 202-647-3941.

(c) Where to apply. Applications must be submitted to the Director,

Office of marine Conservation, Bureau of Oceans and International

Environmental and Scientific Affairs, Room 7820, U.S. Department of

State, Washington, DC 20520-7818.

(d) Applicaton approval. Application approval will be by execution

of the guaranty agreement by the Secretary or by the Secretary's

designee.

Sec. 33.5 Guaranty agreements.

(a) Period in effect. Agreements are effective for a Fiscal Year

beginning October 1 and ending on the next September 30. Applications

submitted after October 1 are effective from the date the application

and fee are mailed (determined by the postmark) through September 30.

(b) Guaranty agreement transfer. A guaranty agreement may, with the

Secretary's prior consent, be transferred when a vessel which is the

subject of a guaranty agreement is transferred to a new owner if the

transfer occurs during the agreement period.

(c) Guaranty agreement renewal. A guaranty agreement may be renewed

for the next agreement year by submitting an application form with the

appropriate fee for the next year in accordance with the Secretary's

annually published requirements regarding fees. Renewals are subject to

the Secretary's approval.

(d) Provisions of the agreement. The agreement will provide for

reimbursement for certain losses caused by foreign countries' seizure

and detention of U.S. fishing vessels on the basis of claims to

jurisdiction which are not recognized by the United States. Recent

amendments to the Magnuson Fishery Conservation and Management Act (16

U.S.C. (1801 et seq.) assert U.S. jurisdiction over highly migratory

species of tuna in the U.S. exclusive economic zone (EEZ). Accordingly,

as a matter of international law, the United States now recognizes

other coastal states' claims to jurisdiction over tuna in their EEZ'S.

This change directly affect certification of claims filed under the

Fishermen's Protective Act. Participants are advised that this means

that the Department will no longer certify for payment claims resulting

from the seizure of a U.S. vessel while such vessel was fishing for

tuna within the exclusive economic zone of another country in violation

of that country's laws. Claims for detentions or seizures based on

other claims to jurisdiction not recognized by the United States, or on

the basis of claims to jurisdiction recognized by the United States but

exercised in a manner inconsistent with international law as recognized

by the

[[Page 49968]]

United states, may still be certified by the Department.

Sec. 33.6 Fees.

(a) General. Fees provide for administrative costs and payment of

claims. Fees are set annually on the basis of past and anticipated

claim experience. The annual agreement year for which fees are payable

starts on October 1 and ends on September 30 of the following year.

(b) Amount and payment. The amount of each annual fee or adjusted

fee will be established by the Office Director of the Office of Marine

Conservation, Bureau of Oceans and International Environmental and

Scientific Affairs, by publication of a notice in the Federal Register.

Each notice will establish the amount of the fee, when the fee is due,

when the fee is payable, and any special conditions surrounding

extension of prior agreements or execution of new agreements. Unless

otherwise specified in such notices, agreement coverage will commence

with the postmarked date of the fee payment and application.

(c) Adjustment and refund. Fees may be adjusted at any time to

reflect actual seizure and detention experience for which claims are

anticipated. Failure to submit adjusted fees will result in agreement

termination as of the date the adjusted fee is payable. No fees will be

refunded after an agreement is executed by the Secretary.

(d) Disposition. All fees will be deposited in the Fishermen's

Guaranty Fund. They will remain available without fiscal year

limitation to carry out section 7 of the Act. Claims will be paid from

fees and from appropriated funds, if any. Fees not required to pay

administrative costs or claims may be invested in U.S. obligations. All

earnings will be credited to the Fishermen's Guaranty Fund.

Sec. 33.7 Conditions for claims.

(a) Unless there is clear and convincing credible evidence that the

seizure did not meet the requirements of the Act, payment of claims

will be made when:

(1) A covered vessel is seized by a foreign country under

conditions specified in the Act and the guaranty agreement; and

(2) The incident occurred during the period the guaranty agreement

was in force for the vessel involved.

(b) Payments will be made to the owner for:

(1) All actual costs (except those covered by section 3 of the Act

or reimbursable from some other source) incurred by the owner during

the seizure or detention period as a direct result thereof, including:

(i) Damage to, or destruction of, the vessel or its equipment; or

(ii) Loss or confiscation of the vessel or its equipment; and

(iii) Dockage fees or utilities;

(2) The market value of fish or shellfish caught before seizure of

the vessel and confiscated or spoiled during the period of detention;

and

(3) Up to 50 percent of the vessel's gross income lost as a direct

result of the seizure and detention.

(c) The exceptions are that no payment will be made from the Fund

for a seizure which is:

(1) Covered by any other provision of law (for example, fines,

license fees, registration fees, or other direct charges payable under

section 3 of the Act);

(2) Made by a country at war with the United States;

(3) In accordance with any applicable convention or treaty, if that

treaty or convention was made with the advice and consent of the Senate

and was in force and effect for the United States and the seizing

country at the time of the seizure;

(4) Which occurs before the guaranty agreement's effective date or

after its termination;

(5) For which other sources of alternative reimbursement have not

first been fully pursued (for example, the insurance coverage required

by the agreement and valid claims under any law);

(6) For which material requirements of the guaranty agreement, the

Act, or the program regulations have not been fully fulfilled; or

(7) In the view of the Department of State occurred because the

seized vessel was undermining or diminishing the effectiveness of

international conservation and management measures recognized by the

United States, or otherwise contributing to stock conservation problems

pending the establishment of such measures.

Sec. 33.8 Claim procedures.

(a) Where and when to apply. Claims must be submitted to the Office

Director, Office of Marine Conservation, Bureau of Oceans and

International Environmental and Scientific Affairs, Room 7820, U.S.

Department of State, Washington, DC 20520-7818. Claims must be

submitted within ninety (90) days after the vessel's release. Requests

for extension of the filing deadline must be in writing and approved by

the Office Director, Office of Marine Conservation, Bureau of Oceans

and International Environmental and Scientific Affairs.

(b) Contents of claim. All material allegations of a claim must be

supported by documentary evidence. Foreign language documents must be

accompanied by an authenticated English translation. Claims must

include:

(1) The captain's sworn statement about the exact location and

activity of the vessel when seized;

(2) Certified copies of charges, hearings, and findings by the

government seizing the vessel;

(3) A detailed computation of all actual costs directly resulting

from the seizure and detention, supported by receipts, affidavits, or

other documentation acceptable to the Office Director, Office of Marine

Conservation, Bureau of Oceans and International Environmental and

Scientific Affairs;

(4) A detailed computation of lost income claimed, including:

(i) The date and time seized and released;

(ii) The number of miles and running time from the point of seizure

to the point of detention;

(iii) The total fishing time lost (explain in detail if lost

fishing time claimed is any greater than the elapsed time from seizure

to the time required after release to return to the point of seizure);

(iv) The tonnage of catch on board at the time of seizure;

(v) The vessel's average catch-per-day's fishing for the three

calendar years preceding the seizure;

(vi) The vessel's average downtime between fishing trips for the

three calendar years preceding the seizure; and

(vii) The price-per-pound for the catch on the first day the vessel

returns to port after the seizure and detention unless there is a pre-

negotiated price-per-pound with a processor, in which case the pre-

negotiated price must be documented; and

(5) Documentation for confiscated, damaged, destroyed, or stolen

equipment, including:

(i) The date and cost of acquisition supported by invoices or other

acceptable proof of ownership; and

(ii) An estimate from a commercial source of the replacement or

repair cost.

(c) Burden of proof. The claimant has the burden of proving all

aspects of the claim, except in cases of dispute over the facts of the

seizure where the claimant shall have the presumption that the seizure

was eligible unless there is clear and convincing credible evidence

that the seizure did not meet the eligibility standards of the Act.

Sec. 33.9 Amount of award.

(a) Lost fishing time. Compensation is limited to 50 percent of the

gross

[[Page 49969]]

income lost as a direct result of the seizure and detention, based on

the value of the average catch-per-day's fishing during the three most

recent calendar years immediately preceding the seizure as determined

by the Secretary, based on catch rates on comparable vessels in

comparable fisheries. The compensable period for cases of seizure and

detention not resulting in vessels confiscation is limited to the

elapsed time from seizure to the time after release when the vessel

could reasonably be expected to return to the point of seizure. The

compensable period in cases where the vessel is confiscated is limited

to the elapsed time from seizure through the date of confiscation, plus

an additional period to purchase a replacement vessel and return to the

point of seizure. In no case can the additional period exceed 120 days.

(1) Compensation for confiscation of vessels, where no buy-back has

occurred, will be based on market value which will be determined by

averaging estimates of market value obtained from as many vessel

surveyors or brokers as the Secretary deems practicable;

(2) Compensation for capital equipment other than vessel, will be

based on depreciated replacement cost;

(3) Compensation for expendable items and crew's belongings will be

50 percent of their replacement costs; and

(4) Compensation for confiscated catch will be for full value,

based on the price-per-pound.

(b) Fuel expense. Compensation for fuel expenses will be based on

the purchase price, the time required to run to and from the fishing

grounds, the detention time in port, and the documented fuel

consumption of the vessel.

(c) Stolen or confiscated property. If the claimant was required to

buy back confiscated property from the foreign country, the claimant

may apply for reimbursement of such charges under section 3 of the Act.

Any other property confiscated is reimbursable from this Guaranty Fund.

Confiscated property is divided into the following categories:

(1) Compensation for confiscation of vessels, where no buy-back has

occurred, will be based on market value which will be determined by

averaging estimates of market value obtained from as many vessel

surveyors or brokers as the Secretary deems practicable;

(2) Compensation for capital equipment other than a vessel, will be

based on depreciated replacement cost;

(3) Compensation for expendable items and crew's belongings will be

50 percent of their replacement cost; and

(4) Compensation for confiscated catch will be for full value,

based on the price-per-pound.

(d) Insurance proceeds. No payments will be made from the Fund for

losses covered by any policy of insurance or other provisions of law.

(f) Appeals. All determinations under this section are final and

are not subject to arbitration or appeal.

Sec. 33.10 Payments.

The Office Director, Office of Marine Conservation, Bureau of

Oceans and International Environmental and Scientific Affairs, will pay

the claimant the amount calculated under Sec. 33.9. Payment will be

made as promptly as practicable, but may be delayed pending the

appropriation of sufficient funds, should fee collections not be

adequate to sustain the operation of the Fund. The Director shall

notify the claimant of the amount approved for payment as promptly as

practicable and the same shall thereafter constitute a valid, but non-

interest bearing obligation of the Government. Delays in payments are

not a direct consequence of seizure and detention and cannot therefore

be construed as increasing the compensable period for lost fishing

time. If there is a question about distribution of the proceeds of the

claim, the Director may request proof of interest from all parties, and

will settle this issue.

Sec. 33.11 Records.

The Office Director, Office of Marine Conservation, Bureau of

Oceans and International Environmental and Scientific Affairs will have

the right to inspect claimants' books and records as a precondition to

approving claims. All claims must contain written authorization of the

guaranteed party for any international, federal, state, or local

governmental Agencies to provide the Office Director, Office of Marine

Conservation, Bureau of Oceans and International Environmental and

Scientific Affairs any data or information pertinent to a claim.

Sec. 33.12 Penalties.

Persons who willfully make any false or misleading statement or

representation to obtain compensation from the Fund are subject to

criminal prosecution under 22 U.S.C. 1980(g). This provides penalties

up to $25,000 or imprisonment for up to one year, or both. Any evidence

of criminal conduct will be promptly forwarded to the United States

Department of Justice for action. Additionally, misrepresentation,

concealment, or fraud, or acts intentionally designed to result in

seizure, may void the guaranty agreement.

Dated: August 13, 1996.

Eileen Claussen,

Assistant Secretary for Oceans and International Environmental and

Scientific Affairs.

[FR Doc. 96-23436 Filed 9-23-96; 8:45 am]

BILLING CODE 4710-09-M