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FMC announces US$2 million fine to Hapag-Lloyd for detention and demurrage violation

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NEW YORK : The United States Federal Maritime Commission has approved a settlement agreement reached between its Bureau of Enforcement (BoE) and Hapag-Lloyd where the ocean carrier will pay a US$2 million civil penalty to address alleged violations related to their detention and demurrage practices.

The US$2 million civil penalty will be paid to the US Department of the Treasury and will be deposited into the General Fund.

“We must ensure powerful ocean carriers obey the Shipping Act when dealing with American importers and exporters. The case that was concluded today is just part of an ongoing effort to investigate any conduct alleged to violate FMC rules – and in particular, the interpretive rule on detention and demurrage charges,” commented FMC Chairman, Daniel Maffei.

This settlement agreement follows an initial decision on 22 April issued by the Commission’s Administrative Law Judge (ALJ) finding Hapag-Lloyd violated the law by knowingly and willfully failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing or delivery property, by unreasonably refusing to waive detention charges, in violation of 46 USC 41102(c), according to FMC statement.

The ALJ ordered a US$822,220 civil penalty and for the German carrier to cease and desist their violative actions.

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