New FMC OTI Regulations in Effect

As of December 9, 2015, revised Federal Maritime Commission (“FMC”) regulations governing the licensing and operation of Ocean Transportation Intermediaries (“OTI”s) are now in effect.  The new regulations govern the operations of both ocean freight forwarders and non-vessel-operating common carriers (“NVOCCs”) providing transportation intermediary services in shipping international freight to and from the United States by ocean vessel. Both U.S. and non-U.S. entities providing such services are subject to the regulations.

The Commission’s revised regulations do not change the requirement that OTIs must be licensed and bonded by the FMC.  However, they do change some of the regulatory definitions and specify the regulatory criteria that must be met to obtain an OTI license.  These changes include new regulatory provisions on the criteria considered by the Commission in determining whether a “qualifying individual” has the required experience and character to allow the licensing of an ocean freight forwarder or NVOCC.  The amended regulations also clarify when OTI branch offices must be separately licensed, as well as the types of changes to a licensed OTI’s business that must be reported to the Commission.  The Commission’s amended regulations also address when and how non-U.S. entities may conduct forwarding and NVOCC operations in the U.S. trades, including registration, licensing, and agency requirements for such entities.

OTIs should be aware that the Commission has amended its regulations regarding the responsibilities of licensed OTIs for the actions of their agents and the records in the possession of their agents.  The Commission has also adopted new, streamlined hearing procedures for the denial, revocation, or suspension of an OTI license.  The new regulations also update Commission regulations on freight forwarding fees and compensation; OTI financial responsibility; and proof of NVOCC compliance with FMC regulations.

The FMC’s revised OTI regulations also create a new legal requirement that every licensed ocean freight forwarder and NVOCC renew its OTI license every three years.  However, that regulation is not yet in effect.  Instead, the obligation to renew existing OTI licenses will commence on December 9, 2016 and will be phased in over a three-year period, so that both the Commission and the approximately 4,700 currently-licensed OTIs can transition to this new legal requirement.



Posted in All Advisories, International Law, Shipping, Transportation

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