[Federal Register: July 16, 1999 (Volume 64, Number 136)] [Notices] [Page 38498-38499] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr16jy99-135] ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Maritime Administration [Docket No. MARAD-1999-5946] Crowley American Transport, Inc.; Application for Approval of the Proposed Transfer of Maritime Security Program Operating Agreements (MA/MSP-13 Through MA/MSP-15) Counsel for Crowley American Transport, Inc. (Crowley) and American Automar, Inc. (Automar), by letter dated July 2, 1999, has notified the Maritime Administration (MARAD), of the proposed transfer of three Maritime Security Program (MSP) Operating Agreements (MA/MSP-13 through 15) from Crowley to Automar International Car Carriers Inc. (AICC), a wholly-owned subsidiary of Automar, pursuant to section 652(j) of the Merchant Marine Act of 1936, as amended (Act). Crowley was awarded three MSP Operating Agreements for the U.S.-flag vessels, SEA FOX, SEA LION and SEA WOLF on December 20, 1996. Automar has entered into an agreement with Crowley, whereby Automar or its wholly-owned subsidiaries will purchase certain container vessel assets of Crowley. The assets will include the two vessels formerly known as the SEA LION and SEA WOLF (renamed ``LTC CALVIN P. TITUS'' and ``SP 5 ERIC G. GIBSON'' respectively), which had been operating under MSP contracts, but are now intended to be operated under long-term contract to the U.S. Navy commencing in July 1999. Additionally, Crowley and Automar propose that certain related vessel assets and the three referenced MSP Operating Agreements be transferred from Crowley to Automar. With respect to the transfer of MSP Operating Agreements, section 652(j) of the Act provides that ``A contractor under an operating agreement may transfer the agreement (including all rights and obligations under the agreement) to any person eligible to enter into that Operating Agreement under this subtitle after notification of the Secretary [of Transportation] in accordance with regulations prescribed by the Secretary, unless the transfer is disapproved by the Secretary within 90 days after the date of notification. A [[Page 38499]] person to whom an Operating Agreement is transferred may receive payments from the Secretary under the agreement only if each vessel to be covered by the agreement after the transfer is an eligible vessel under section 651(b).'' Assuming MARAD does not disapprove the proposed transfer within 90 days of its acceptance of the completed application, Crowley and Automar have stated their intention to transfer MSP Operating Agreement MA/MSP-13 from the SEA FOX to the FAUST and MA/MSP-14 from the SEA LION to the FIDELIO. The FAUST and FIDELIO are existing U.S.-flag roll-on/ roll-off (Ro/Ro) vessels and Automar has asserted that they are MSP eligible vessels under section 651(b) of the Act. Crowley and Automar have advised that this transfer is scheduled to occur on or before August 20, 1999. The third MSP Operating Agreement proposed for transfer is MA/MSP-15 from the SEA WOLF to the Ro/Ro vessel TANABATA, or an equivalent vessel, which is asserted to be an eligible vessel under section 651(b) of the Act, and would be reflagged to U.S.- registry no later than March 31, 2000. In implementing the transaction, it is asserted that under a U.S. citizen owner trust structure, the vessels will be bareboat chartered to Automar's subsidiary (AICC) which will then time charter the FAUST, FIDELIO and TANABATA to American Roll-On Roll-Off Carrier LLC (ARC), a Delaware limited liability company, which will engage American V. Ships Marine, Ltd. (V Ships), to provide technical and management support to operate the FAUST, FIDELIO, TANABATA. These three vessels and a fourth existing U.S.-flag, non-MSP Ro/Ro vessel, the TELLUS, will be operated in U.S.-flag commercial service between the United States and Europe. The application contains reference to section 804 of the Act concerning foreign-flag vessels which call on the United States and which are owned or chartered by a foreign corporation with connections to Automar. Automar asserts that the foreign involvement is limited to Fram Shipping Limited (Fram), a Bermuda corporation, which owns or charters foreign-flag vessels that may call on the United States from time to time, and which owns approximately 20 percent of the issued and outstanding shares of common stock of Automar. A foreign citizen director of Fram is also a director of Automar, however, the application states that Fram is only a portfolio investor and does not have the ability to divert any MSP payments to the foreign corporation or elect any director to Automar's board. Automar asserts that there is not sufficient foreign affiliation to require the application of section 804 restrictions. Crowley and Automar have requested that MARAD allow the proposed transfers to become effective in accordance with the application and pursuant to law. This notice invites comments on legal and policy issues that may be raised by the Crowley and Automar proposal relating to the sale of the ships and the transfer of the three subject MSP Operating Agreements. MARAD has received one comment in advance of this notice, questioning whether one or more MSP contracts may be transferred without a simultaneous transfer of the vessel operated under that contract (namely SEA FOX) to the same purchaser. A redacted copy of the transfer application will be available for inspection at the DOT Dockets Facility and on the DOT Dockets website (address information follows). Any person, firm, or corporation having an interest in this proposal and desiring to submit comments concerning the application may file comments as follows. You should mention the docket number that appears at the top of this document. You should submit your written comments to the Docket Clerk, U.S. DOT Dockets, Room PL-401 Nassif Building, Department of Transportation, 400 Seventh Street, S.W., Washington, DC 20590. Comments may also be submitted by electronic means via the Internet at http://dmses.dot.gov/sub- mit/. All comments will become part of the docket. You may call Docket Management at (202) 366-9324. You may visit the docket room to inspect and copy comments at the above address between 10 a.m. and 5 p.m., EDT. Monday through Friday, except Holidays. An electronic version of this document is available on the World Wide Web at http://dms.dot.gov. Comments must be received no later than the close of business on July 23, 1999. This notice is published as a matter of discretion, and the fact of its publication should in no way be considered a favorable or unfavorable decision on the application, as filed, or as may be amended. MARAD will consider any comments timely submitted and take such action with respect thereto as may be deemed appropriate. Dated: July 12, 1999. By Order of the Maritime Administration. Joel C. Richard, Secretary, Maritime Administration. [FR Doc. 99-18120 Filed 7-15-99; 8:45 am] BILLING CODE 4910-81-P