FEDERAL MARITIME COMMISSION

FMC MEETS ON REPORTED ADVERSE BRAZILIAN SHIPPING ACTIONS

NR 98-10

Washington, D.C. 20573

For Release: November 24, 1998

The Federal Maritime Commission met today to discuss reports that the Government of Brazil has recently taken actions seriously unfavorable to U.S. ocean carriers and shippers. It appears that Brazilian authorities, without notice and in contravention of the 1996 U.S.-Brazil maritime agreement, have begun imposing discriminatory rules on U.S. carriers with regard to the carriage of a wide range of government-reserved cargoes, estimated to comprise at least 20% of the U.S.-Brazil trade. As a result, U.S. carriers or shippers may be required to seek individual waivers to carry the reserved cargoes, which include a broad range of commercial cargoes shipped by U.S. exporters. Moreover, shippers using U.S. carriers to carry reserved cargoes may be subject to sizable tax and duty levies not imposed on cargo moving on Brazilian ships.

Accordingly, the Commission today has tasked the staff to produce, on an expedited basis, draft documents setting forth an appropriate Commission response. Such measures may include the prompt imposition of sanctions pursuant to section 19 of the Merchant Marine Act, 1920, including fees on Brazilian vessels calling at U.S. ports in amounts up to one million dollars per sailing. Chairman Harold J. Creel stated: "I am gravely concerned about these reports, which could result in exceptionally serious harm to U.S. carriers and U.S. exporters. This situation could necessitate rapid Commission action."