The Federal Maritime Commission yesterday announced a $2.5 million settlement with Seatrain Lines Inc., for its involvment in rebating schemes.
The second largest civil penalty settlement in the history of the FMC, the action brings the total amount of penalties levied and settled against several shipping firms by the FMC to over $8 million.
And, according to commission chairman Richard J. Daschbach, the total amount of fines announced by the FMC is now well over $10.4 million - which is $1 million more than the entire FMC budget, according to Commission Chairman Richard J. Daschbach.
The Seatrain action is just the latest in several legal actions taken against many American flag carriers for rebate policies alleged to circumvent the regular shipping rates set in international conference.
The largest previous penalty settlement came in another rebating case against Sea-Land Services Inc., involving a $4 million penalty in Jan. 1977.
Other major settlement agreements have been reached with Blue Sea Lines and United States lines, as well as 31 other shippers who have paid a total of more than $1 million.
Under the Shipping act, all common carriers trading over the oceans with the U.S. must file tariffs setting their freight rates with the FMC.
Because everyone must honor the published rates - which ar equalized in an effort to preserve the smaller carriers - it is illegal to offer under-the-table rebvates or inducements as a means of securing new business. The FMC action against Seatrain began in 1976, when the commission learned that the Justice Department was indicting an officer of Cleveland-based Tenna Corp. for accepting kick-backs from Seatrain to have that carrier ship overseas goods for Tenna.