§40902 — Title 46 Shipping | U.S. Code

Summary

People must not advertise, offer, or act as an ocean transportation intermediary unless they give a bond, insurance, or other financial guarantee. The Federal Maritime Commission decides the form and amount, and the surety company must be acceptable to the Secretary of the Treasury. The guarantee can pay penalties under section 41109 and orders for repayment under section 41305. It can also cover claims from the intermediary’s transportation activities if the intermediary agrees and the surety reviews it, or if the intermediary ignores proper notice and the surety finds the claim valid. If a claimant first tries to resolve the claim this way and it stays unresolved for a reasonable time, the guarantee must also cover court judgments for damages from those transportation activities. The Commission must make rules to protect claimants, intermediaries, and sureties and to limit enforceable judgments to harms that come from the insured intermediary’s transportation-related work. An intermediary not based in the United States must name a U.S. resident agent to receive legal papers and subpoenas.

Title 46, §40902

Shipping — Source: USLM XML via OLRC

(a)A person may not advertise, hold oneself out, or act as an ocean transportation intermediary unless the person furnishes a bond, proof of insurance, or other surety—

(1)in a form and amount determined by the Federal Maritime Commission to insure financial responsibility; and

(2)issued by a surety company found acceptable by the Secretary of the Treasury.

(b)A bond, insurance, or other surety obtained under this section—

(1)shall be available to pay any penalty assessed under section 41109 of this title or any order for reparation issued under section 41305 of this title;

(2)may be available to pay any claim against an ocean transportation intermediary arising from its transportation-related activities—

(A)with the consent of the insured ocean transportation intermediary and subject to review by the surety company; or

(B)when the claim is deemed valid by the surety company after the ocean transportation intermediary has failed to respond to adequate notice to address the validity of the claim; and

(3)shall be available to pay any judgment for damages against an ocean transportation intermediary arising from its transportation-related activities, if the claimant has first attempted to resolve the claim under paragraph (2) and the claim has not been resolved within a reasonable period of time.

(c)The Commission shall prescribe regulations for the purpose of protecting the interests of claimants, ocean transportation intermediaries, and surety companies with respect to the process of pursuing claims against ocean transportation intermediary bonds, insurance, or sureties through court judgments. The regulations shall provide that a judgment for monetary damages may not be enforced except to the extent that the damages claimed arise from the transportation-related activities of the insured ocean transportation intermediary, as defined by the Commission.

(d)An ocean transportation intermediary not domiciled in the United States shall designate a resident agent in the United States for receipt of service of judicial and administrative process, including subpoenas.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 4090246 App.:1718(b).Pub. L. 98–237, § 19(b), Mar. 20, 1984; added Pub. L. 105–258, title I, § 116(4), Oct. 14, 1998, 112 Stat. 1913. In subsection (b), in paragraphs (2) and (3), the words “described in section 1702(17) of this Appendix” are omitted as unnecessary.

Editorial Notes

Amendments

2018—Subsec. (a). Pub. L. 115–282 inserted “advertise, hold oneself out, or” after “may not” in introductory provisions.

§40902 Financial Responsibility