FMC Seeks US$63 Million Fine Against MSCfor Alleged Violations During Covid
2024-04-12
The U.S. Federal Maritime Commission (FMC) is seeking a civil fine of US$63.3 million against the Swiss-Italian Mediterranean Shipping Company (MSC). The FMC alleges that MSC "knowingly and willfully" violated the U.S. Shipping Act during the Covid pandemic, according to a report by London's Lloyd's List. The FMC Office of Enforcement has also requested an administrative law judge to issue a cease-and-desist order against MSC due to its alleged "blatant disregard for the Shipping Act". This would allow the FMC to take action against MSC if it were to "engage in similar unlawful activities in the future". The FMC Office of Enforcement recommendations are based on an investigation that commenced in August 2023. In response, MSC stated that it is "reviewing the Office of Enforcement's brief and will vigorously defend itself against the allegations and the excessive penalties sought". MSC, recognized as the world's largest shipping company, is accused of using an overly broad definition of "merchant" in its Bill of Lading to charge third parties without their consent. It is also accused of billing non-operating reefers (NORs) at the reefer rate, depriving NORs of free time, and failing to publish NOR rates in its U.S. tariff. The FMC enforcement office criticized MSC for committing these alleged violations at the height of the COVID-19 pandemic, a time of significant global shipping tension and competition. The office stated that "MSC's global status, size, resources, and experience all collectively highlight the egregious nature of the violations," which were "iniquitous, vast extent, and severe gravity".