PART 565—CONTROLLED CARRIERS Authority: 46 U.S.C. 40701-40706. Source: 64 FR 8010, Feb. 18, 1999, unless otherwise noted. § 565.1 Purpose and scope. (a) Purpose. (1) Maintain rates or charges in their tariffs and service contracts that are below a level that is just and reasonable; nor (2) Establish, maintain or enforce unjust or unreasonable classifications, rules or regulations in those tariffs or service contracts which result or are likely to result in the carriage or handling of cargo at rates or charges that are below a just and reasonable level. (b) Scope. [64 FR 8010, Feb. 18, 1999, as amended at 74 FR 50735, Oct. 1, 2009] § 565.2 Definitions. (a) Controlled carrier (1) A majority portion of the interest in the carrier is owned or controlled in any manner by that government, by any agency thereof, or by any public or private person controlled by that government; or (2) That government has the right to appoint or disapprove the appointment of a majority of the directors, the chief operating officer or the chief executive officer of the carrier. (b) Effective date § 565.3 Classification as controlled carrier. (a) Notification. (b) Rebuttal of classification. (2) The Commission shall review the rebuttal and notify the ocean common carrier of its final decision. § 565.4 Notification to Commission of change in control. Whenever the operation, control or ownership of an ocean common carrier is transferred resulting in a majority portion of the interest of that ocean common carrier being owned or controlled in any manner by a government, the ocean common carrier shall immediately send written notification of the details of the change to the Secretary of the Commission. If a carrier is newly commencing ocean common carrier operations in a United States trade, and if a majority portion of the carrier is owned or controlled by a government, or if a government may approve or disapprove the majority of directors or the chief executive or operating officer of the carrier, the carrier shall immediately send written notification to the Secretary of the details of such ownership or control. § 565.5 Exceptions. All controlled carriers shall be subject to provisions of this part and section 9 of the Shipping Act of 1984 (46 U.S.C. 40701-40706) except those which meet the following exceptions: (a) When the vessels of the controlling state are entitled by a treaty of the United States to receive national or most-favored-nation treatment; or (b) When the controlled carrier operates in a trade served exclusively by controlled carriers. [64 FR 8010, Feb. 18, 1999, as amended at 74 FR 50735, Oct. 1, 2009] § 565.6 Level of rates and charges generally. No controlled carrier may maintain or enforce rates or charges in its tariffs or service contracts that are below a level that is just and reasonable. No controlled carrier may establish or maintain unjust or unreasonable classifications, rules, or regulations in its tariffs or service contracts. An unjust or unreasonable classification, rule or regulation means one that results or is likely to result in the carriage or handling of cargo at rates or charges that are below a just and reasonable level. See § 565.7 Effective dates. (a) Generally. (b) Open rates Generally. (2) Conference publication of reduced open rates. (i) At or above the minimum level set by the conference; or (ii) At or above the level set by a member of the conference that has not been determined by the Commission to be a controlled carrier subject to section 9 of the Shipping Act of 1984 (46 U.S.C. 40701-40706). (c) Independent action rates of controlled carriers. [64 FR 8010, Feb. 18, 1999, as amended at 74 FR 50735, Oct. 1, 2009] § 565.8 Special permission. Section 8(d) of the Shipping Act of 1984 (46 U.S.C. 40501(e)) authorizes the Commission, in its discretion and for good cause shown, to permit increases or decreases in rates, or the issuance of new or initial rates, on less than statutory notice under § 565.7. Section 9(c) of the Shipping Act of 1984 (46 U.S.C. 40703, 40704(a)) authorizes the Commission to permit a controlled carrier's rates, charges, classifications, rules or regulations to become effective on less than 30 days' notice. The Commission may also in its discretion and for good cause shown, permit departures from the requirements of this part. The Commission will consider such requests for special permission by controlled carriers pursuant to its procedures set forth at 46 CFR part 520. [64 FR 8010, Feb. 18, 1999, as amended at 74 FR 50735, Oct. 1, 2009] § 565.9 Commission review, suspension and prohibition of rates, charges, classifications, rules or regulations. (a)(1) Request for justification. (2) Rate standards. (ii) For the purposes of paragraph (a)(2)(i) of this section, constructive costs (iii) The Commission may also take into account other appropriate factors, including, but not limited to, whether: (A) The rates, charges, classifications, rules or regulations are the same as or similar to those published or assessed by other carriers in the same trade; (B) The rates, charges, classifications, rules or regulations are required to assure movement of particular cargo in the trade; or (C) The rates, charges, classifications, rules or regulations are required to maintain acceptable continuity, level or quality of common carrier service to or from affected ports. (3) Time for determination. (b) Suspension. See (c) Prohibition. (d) Publication. Federal Register. § 565.10 Suspension procedures, period of suspension, and replacement rates. (a)(1) Suspension prior to effective date. (2) Suspension after effective date. (b) Period of suspension. (c) Implementation. (2) if the matter subject to the suspension order is not covered by paragraph (c)(1) of this section, the Commission shall set forth procedures in the order for implementing the suspension. (3) Publication. Federal Register. (d) Replacement rates. (1) Effective date. (2) Rejection of replacement rates. (3) At the same time it announces replacement rates, the controlled carrier shall submit to the Secretary of the Commission, a letter identifying the specific competing common carrier's rates, charges, classification or rules resulting in total charges which are equal to or lower than its own. § 565.11 Presidential review. The Commission shall transmit all orders of suspension or final orders of prohibition to the President of the United States concurrently with the submission of such orders to the Federal Register § 565.12 Stay, postponement, discontinuance or suspension of action. The Commission may, on its own motion or upon petition, postpone, discontinue, or suspend any and all actions taken by it under the provisions of this part. The Commission shall immediately stay the effect of any order issued under this part as requested by the President pursuant to § 565.11. § 565.13 OMB control number assigned pursuant to the Paperwork Reduction Act. The Commission has received OMB approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. In accordance with that Act, agencies are required to display a currently valid control number. The valid control number for this collection of information is 3072-0060.